A GPO is a fantastic, free way to help increase savings and improve your business’s bottom line. Whether you’ve been considering joining a GPO for some time or you’ve been a member for years, here are the top 5 ways you can maximize your GPO membership.
1. Share Your Accounts Payable Data
GPO reps often have access to data that can help determine where savings opportunities for your business exist, but your Accounts Payable (AP) data is key to identifying as many opportunities as possible. Your rep may not have the manpower or access to data to proactively analyze your individual line items, so providing your own AP data offers a great starting point. Providing line-item data on supplies and services you use helps your GPO rep link you to as many contracts as possible.
2. Consider Construction or Capital Equipment Purchases
Many GPOs offer contracts on a wide array of products and services, and you may not be aware of many of them. Large national GPOs, like Premier, Inc., negotiate with suppliers that offer drywall, flooring, office furnishings, commercial doors and hardware, TV and communications equipment, wireless phone service, and large capital equipment. Consider discussing your next construction project with your GPO rep – there could be substantial savings opportunities on categories you never imagined would be covered.
3. Communicate With Your GPO Rep Often
It’s surprising how many GPO members don’t know who their GPO rep is, especially given the rep’s ability to help identify savings. Your rep may be assisting many accounts, so proactively reaching out to them may be your best bet for more personalized service. Spending just a short amount of time with your GPO rep regularly will provide a great return on investment – possibly thousands of dollars of ROI per hour.
4. Review Purchases From Non-GPO Suppliers
At least once a year, you should review the suppliers and products you purchase outside of GPO contracts to determine if some of those purchases could be converted to an equivalent contract through your GPO. In some cases, you may not even be aware that the products you purchase may be eligible for a GPO contract. GPO reps can review your off-contract spend and identify savings opportunities on equivalent or alternate items that are on-contract.
5. Focus On The Big Stuff
Keep the 80/20 rule in mind: 80 percent of your total spend is usually made up of roughly 20 percent of your supplies. Many businesses don’t have the time or energy to dig into pricing for every item they purchase, so focusing on the highest volume supplies and getting as much of those purchases on GPO contracts as possible will provide the biggest dividends. Let your GPO rep do some heavy lifting on the first 80 percent of purchases, then go after the last 20 percent when time allows.
At HE Co-op, we partner with Premier, Inc. (one of the largest GPOs in the country) to provide dedicated one-on-one cost savings analysis to reduce your supply chain spend. Want to join and start saving? Schedule a Discovery Call below!