Supply Chain Now Episode 423
“Our goal is not to boil the ocean. Our goal is to help bring tangible value at the right pace, while creating awareness among procurement executives and supply chain executives the GPO can be a valuable part of their strategy.”
Ara Arslanian, SVP of Private Sector Sales with OMNIA Partners
Procurement has long used volume-leveraged economies of scale to save money and increase influence with suppliers. In some cases, this had led to high degrees of efficiency, but it can also drive all of the value and innovation out of a supply chain.
Ara Arslanian is the SVP of Private Sector Sales with OMNIA Partners. He has significant experience working with Chief Procurement Officers and other executives to consider the full range of ways to bring their spend under management.
As Ara points out in this conversation, procurement and supply chain professionals often don’t fully understand the benefits associated with GPOs, even though the model is hardly new. And as an increasing number of companies turn their focus to agile cost control and expense reduction, it may be exactly the resource they need.
In this podcast interview, Ara tells Supply Chain Now Co-hosts Greg White and Scott Luton about:
- Why savings – while they remain table stakes for procurement – are no longer enough for competitive enterprises
- The tendency for most procurement organizations to emphasize generalist process knowledge, and how they can supplement that with specific category expertise
- How GPOs are positioned to drive everything from supply chain sustainability to lower levels of risk more quickly than companies could do on their own
Intro – Amanda Luton (00:00:05):
It’s time for supply chain. Now broadcasting live from the supply chain capital of the country. Atlanta, Georgia heard around the world supply chain. Now spotlights the best in all things, supply chain, the people, the technologies, the best practices and the critical issues of the day. And now here are your hosts.
Scott Luton (00:00:28):
Hey, good morning, Scott Luton and Greg white back with you here on supply chain. Now, welcome to today’s show Greg. Good morning. How you doing? Doing fantastic. This is the best morning ever on two and a half hours of sleep that I’ve ever had. Well, not only have we enjoyed the woman conversations for this show, but on today’s show, we’re featuring a business leader that gets it been there, done that, especially in the water procurement, which is a really hot topic in global supply chain, really in general right now, but certainly in global supply chain. So undoubtedly Greg, our audience going, gonna have a chance to increase their supply chain acute today. That’s that’s right. It’s more than that in just a moment, a real quick, quick programming before we get started. If you enjoyed today’s conversation, be sure to check us out wherever you get your podcasts from subscribe.
Scott Luton (00:01:17):
So you don’t miss a single thing. Okay, Greg, with no further ado. Let’s welcome in our featured guests here today. Aura Arslanian senior vice president leading the private sector at Omnia partners are how you doing great guys. Good morning. How are you doing great. Good to have you pleasure to be here. We are too. We really heck I think I’ve gained a degree out of our prep conversations thus far, and we’re going to be diving in and learning a lot more about, uh, what RSE in, uh, in industry, in procurement, in business, especially in the group purchasing area. So, um, let’s talk, let’s learn a lot more about yourself first arm. So before we talk shop, before we dive into your expertise, let’s learn more about our Arslanian. So tell us about yourself, where are you from? And you gotta give us a, um, you know, give us the skinny on your upbringing a little bit.
Scott Luton (00:02:12):
Sure. No problem. Well, I, uh, I live in wonderful Cleveland, Ohio, um, which is obviously for nine, well, maybe eight months out of the year someplace you may want to visit. Um, I’ve lived here a majority of my life. I have, uh, I live here at three children, uh, ages ranging from 14 down to eight and obviously they’re keeping me pretty active these days. And so a lot of funds and, uh, I’m hoping that I don’t have to fulfill the role of school teacher and principal much longer, but who knows where that’s gonna go. But, um, but anyway, yeah, so it’s, it’s a great place and I’m a little bit about my background, uh, and my upbringing since you asked. Um, I think, you know, mostly, uh, my family, uh, and growing up has been, uh, entrepreneurs and so small business owners, folks who kind understood and valued
Ara Arslanian (00:03:00):
The idea of hard work and, and the value of a good deal and taught me to treat clients and customers and the right way and, and go and be above and beyond. It also take chances. And I think that, uh, Pitta, Mises, uh, who I am and what Omnia partners is also about,
Scott Luton (00:03:17):
I love that Greg, that didn’t come out in the prep conversation. Talk about alignment though, right? Customers first, like the value of a good deal entrepreneurs, right? I mean, all that is man, you were born for this.
Ara Arslanian (00:03:32):
Well, it’s funny because even though I come from again, small companies, entrepreneurs, um, there’s that vibe within Omnia partners called truly philosophically, even though we aren’t necessarily a quote unquote small company, um, that that really permeates through. And I think that when our audience hears today, they’ll, they’ll get the sense that, you know, we have their interest in mind.
Scott Luton (00:03:54):
Well, also creativity, uh, you know, when think about entrepreneurial mindsets and small business mindsets, getting creative about solving problems, that certainly has been a part of our conversations and seemingly part of your background as well. And, and in 2020, as, as this year has taught us, we’ve got to get creative about solving challenges. So, all right. So let’s, um, let’s talk more about your professional journey prior to your current role with Omnia partner. So tell us a little about that journey, especially, um, you know, a role or two that really helped shape your worldview.
Ara Arslanian (00:04:27):
Yeah. Um, well, you know, I think when I started out my professional career, I spent four years doing commercial based lending for a lot of small businesses, uh, in, in the mid Midwest really. And I decided to go back to business school. And then, um, when I came out of school, my choices were, it was a good time in the economy. And I picked the career path in industrials flies and MRO, which really has parlayed into a lot of what we do today and across our portfolio. But, um, I was part of the leadership team of a large, uh, industrial distributor and I led roles across sales, operations, market development, physical distribution, uh, and that led me into the group purchasing space. Um, a few years later, five years later and led the strategy for small group purchasing organization based here in Northeast Ohio had a great relationship with one of our board members who ironically had a really powerful small company doing group purchasing focused on the fortune 1000. Uh, and, uh, I think ultimately, uh, when Omnia partners acquired this company, which was formerly known as corporate United, they recognize the power and, and the access and the value that was being delivered to the market. So it’s just fantastic that that’s rolled up into Omnia partners today and, and for the last 12 or so years, I’ve been able to lead the private sector, uh, you know, concept and sales organization, uh, to, uh, to deliver the value that we do.
Scott Luton (00:05:51):
Outstanding. Okay. So looking back, we all have a variety of Eureka moments, right? Both personally
Scott Luton (00:05:58):
And professionally looking back at your professional journey, what’s one Eureka moment that really sticks out for you, aura.
Ara Arslanian (00:06:04):
Well, you know, it’s, it’s ironic because I think it’s not so much a moment as it is maybe a concept or a philosophy. Um, and that is to listen more than speak, um, which is ironic, cause I’m doing a podcast today and all I’m doing is speaking. Right. But, uh, but truth be told. Um, you know, when you, when you think about the idea of leadership, um, somebody told me once, you know, leaders don’t make followers, they create more leaders and, and I really subscribed to that. And I think in our space, particularly in the GPO space, um, you know, it’s not a new solution, but the idea of educating and training our supply chain professionals and our procurement leaders on the value and helping them become change agents and mobilizers, um, teaching them to sell within their four walls. That to me is really rewarding. And I think that’s the leadership or maybe Eureka moment, which is, you know, good things sort of parlay themselves. And so, um, we really try to build, uh, you know, an advantage of sort of the evangelizers, uh, model mobilizer, a model, uh, across our membership and the companies we serve.
Greg White (00:07:09):
Alright. So Greg let’s, can you sit in the table here? Yeah. So I think we have a decent idea. You you’ve mentioned Omnia, but give us an idea in a nutshell, what does, what is it Omnia does and, and tell us a little bit about, I mean, about what a senior vice president of the private sector does.
Ara Arslanian (00:07:29):
Well, yeah, I mean, it’s, it’s a great question. I think, you know, the concept of group buying has been around a long time. Uh, you know, so we’re, we’re not, um, we’re not inventing the concept if you will, but, um, when I talk about leadership, we’re, we’re just grateful because we are really the leader in this sort of emerging cutting edge space. Um, when you look at the new generation of what group purchasing is doing, and so essentially Omnia partners, we harness, um, industry leading buying power, uh, across world-class suppliers. And we offer those portfolio of contracts to our member companies. Um, we have two sides of our business. Uh, we have a public sector, uh, which really focuses on state and local and K through 12 and colleges and universities and so forth. And the private sector, which obviously I mentioned, uh, you know, I’m affiliated with where we focus on the fortune 1000 and even down to, you know, some midsize businesses, but the mission is absolutely the same, um, economy of scale. And we deliver powerful contracts, world-class suppliers across a lot of different verticals. Um, so it’s not a singular category or so, um, we hit in human resources in information technology and corporate services and facilities and travel and so forth. And, and we really bring a transparent value driven pricing model and that makes our members become, uh, they find value in essentially become a customer of choice through this triangular relationship.
Greg White (00:08:57):
Uh I’m I’m I want to get into that, the private sector here in just a second, but give us an idea of what your day to day is like, what does, what does our really do all day? I bet there are a lot of people who wonder that well, yeah,
Ara Arslanian (00:09:10):
Sure. There is. And so I don’t want to expose myself too much here, but, um, no most of my time is really spent on working with our team of professionals. Um, we go out and we work with great companies, world-class companies to get them to become part of our membership, um, to develop strategies with us and in conjunction with our suppliers that we’ve sourced, right? These, these aggregated contracts we’ll talk about. Um, and, and so I spend a lot of time with these companies and our supplier executives and bridging those gaps so that we can continue to build the group because the power of the group really, um, is, is enhanced, uh, as we add more and more great companies. And so I’m very fortunate, uh, prior to this sort of unique, challenging times that we have globally, I was able to sit in front of a lot of great procurement leaders and chief procurement officers and finance leaders and some of the most powerful, uh, world class companies and, and deliver value to them. So my day to day is, is constantly on the phone, constantly driving to promote and continue to bring value to all of our constituents.
Greg White (00:10:15):
So I’m curious about GPS. I mean, procurement is a huge topic right now, or maybe I’ve just been awakened to it. I was on the finished goods side before, um, but I’ve always dealt with procurement, but now it seems like you hear things like procurement is part of supply chain, or it is a discipline of supply chain where before it was thought of as a secondary discipline, but procurement head and GPS have been really prominent in healthcare and government, as you said, the public sector for a long, long time. But it seems like a lot at a lot of private companies have kind of gone it alone for quite a while. Why do you think they are, or why do you think they are turning to GPS now?
Ara Arslanian (00:11:08):
You know, I think it’s an awareness to the need for it. Um, you know, if we, if we go backwards and we try to think about what problem are we solving or what problems are procurement leaders faced with? Um, it’s really a matter of a couple things. Um, obviously everybody can easily point to the savings, right? We’ve got to deliver cost out of the organization. I mean, that’s table stakes. Um, but, but there’s this need for efficiency and this need for what I like to call stakeholder alignment, um, to promote the concept of spend under management. I think anybody in the audience here, um, in some form or fashion, you know, understands the concept of, of managed spend, uh, they pay lots of money, uh, for consultants and third parties to come in and, and help, uh, not only provide visibility to that span, but to find ways to harness it and to get leverage on their own.
Ara Arslanian (00:11:59):
And the GPO really provides that leverage without that heavy lift. And, and so while the definition of spend under management may vary within companies and believe me, there’s been a million studies done on this. Um, there’s really some core things. You know, our, our professional procurement leaders are looking to increase their leverage, increased compliance, um, address global initiatives, and nowadays, um, because you can’t, you know, kind of get the blood out of the turnip, right? You, you have to really emphasize the non pricing factors in your programs. Um, it’s not about grinding down your supplier to the lowest common denominator. It is about service levels and innovation and total cost of ownership and all of the great things that you hear about that it’s real. And, and likewise, they’re being more intelligent. Uh, they’re looking for third party assistance where it makes sense and they are trying to hire and bring a more sophisticated procurement manager or buyer into the organization and, um, and, and achieve supplier consolidation and sustainability as a result. So it’s a perfect storm Greg of, of needs that say, how do I do this more effectively? And the GPO is just right there ready, um, you know, to, to feel that that demand
Greg White (00:13:15):
Yeah. When you, when you talk about compliance and some of these other things I, I think about first of all, the term stay in your lane comes to mind. I think about from my perspective, more from a merchandising than a procurement perspective, I think about all the things that are outsourced from that standpoint, because we’re merchants are typically really good at going, that product is going to sell, right. We’re not great at defining supplier, um, compliance programs and, and setting supply chain parameters that make cost sense and that sort of thing. So I completely get why companies, um, need that, right. So I have to ask this question. This is just a curiosity of mine. Why would a company choose not to, or maybe choose to, but why would they particularly choose not to use a GPO? It seems like you are sort of going it alone. If you don’t do that. There’s so much power in a GPO with, with not only the group buying, but as you said, a lot of the economies of scale around operations and things like that. Yeah.
Ara Arslanian (00:14:27):
Yeah. Well, it is a very, very good question. And I’ll tell you a few years ago, uh, we, we commissioned a little report that was on the myths of a GPO, the, you know, what are the common myths and, and the misnomers. And it’s really funny because, um, when you talk to, uh, sophisticated organizations, uh, they get it and, and they are, there really, isn’t a reason why they shouldn’t, uh, uh, participate. Um, but the, the common reasons are this sort of fear of, of, um, you know, lack of agility, I’ll say, uh, we’re different, right? Um, we are, you don’t understand our sourcing process or we, we have to do it a certain way. And it’s, you know, it’s really sometimes with all due respect to the audience, um, you know, it, it’s, it’s, uh, it’s stuff that’s, that’s, self-limiting in a lot of cases.
Ara Arslanian (00:15:17):
Uh, the truth is, is that, uh, it’s a very flexible model. And that’s part of the, I think the maturity of the model. And I think the fact that Omnia partners, uh, approach has been a little bit, you know, unique and cutting edge, but our goal really is to bring customized programs with that leverage. And with that better supplier experience. So people get a little apprehensive to say, Oh boy, I don’t want to be exposed if this cheap deal comes in and shows double digit savings on a program that I’ve owned. So we’re not gonna necessarily be the most popular with the buyer level. We’re gonna, we’re going to be more relevant to the, uh, you know, to the VP of indirect or procurement leaders and chief procurement officers and finance. Um, but, but they’re really, when you start to look at it, um, there, there really is no reason why you wouldn’t want to at least explore the idea of group purchasing.
Greg White (00:16:09):
Honestly, are I kind of expected you to say that, but I love the explanation there because just looking at it from the outside, looking in my gut instinct was to say something like that. So, all right. So we’ve talked about the savings and we’ve talked about a lot of the tangible, other tangibles and intangibles. So give us an example. Well, first of all, let me, let me take a step back. Um, we’ve also talked about the fact that I believe what you said is I could pick and choose. I want, you know, two from column a and one from column B, but I don’t want anything from column C and construct my own program. Right. So if there is something that an organization is particularly adept at, they could hold onto that. Right.
Ara Arslanian (00:16:52):
Could, yeah. I mean, when, when you think about the concept of, of group purchasing and I’ll just, again, speaking for Omnia partners, uh, we have over 400 agreements that we’ve sourced. Uh, if any, one of, uh, the companies that are interested in us want to use 400 agreements, we’ll happily oblige, but the reality is that, you know, that is, um, you know, that’s not the pace that that’s realistic. What we do is because we have these verticals where we are relevant in human resources and it, and facilities and corporate services, and even direct materials, you know, components, um, and manufacturing services and so forth. Um, we have stakeholders that, uh, see, or can see relevance in our programs. Our goal is not to boil the ocean. Our goal is to help bring a tangible value at the right pace, um, but create that awareness for our procurement executives and supply chain executives to realize that the GPO is a valuable part of their strategy for those categories.
Ara Arslanian (00:17:52):
Pardon me, makes sense. And, and, you know, just to go back to a question, you asked Greg a few minutes ago about, you know, what, what do I do in my day to day? Well, my team is really responsible to be there holding the hand of, uh, the members that we have to guide them into that next wave of what might make, what might make sense. Um, it may be a phase one phase, two phase three approach to adopting our contracts where it makes sense, but we are by no means, do we mandate anything or charge a fee for service or a gain share like some of, um, you know, some, some third parties might do
Greg White (00:18:25):
The cost savings are so apparent. It seems like compliance and a lot of the, um, consolidation, as you said, of a vendor relationships from 400 agreements down to one, that makes great sense to me. So aside from those few things, where do you think GPS tend to add the most value? Yes.
Ara Arslanian (00:18:45):
Well, that’s a good, good point. I think there’s a couple of different, um, ways we do that. Uh, you know, you certainly can bring value at the category level, like we talked about, right. The value of, of savings. But if you back up a little bit, and you think about the amount of time spent sourcing and the amount of, um, expertise you might have within your organization, the resident expertise, it’s some somewhat, um, uh, you know, it’s pretty powerful when you go to some big companies and you say, Oh boy, they, you know, world class organizations who may not necessarily have their house in order, um, they have a handful of very talented people, but you have somebody that might be doing a sourcing project on, uh, industrial supplies one week and a couple of weeks later, they’re on travel management and then they’re to
Greg White (00:19:31):
Software or whatever it is, right?
Ara Arslanian (00:19:33):
Yeah. So you have generalists, not specialists, and even in some of the largest companies, particularly on the indirect spend side. And so what I’m the partners has done, and what I think is really important in this space is that anybody can mint a contract. Um, but if you can bring that layer of expertise to help implement it, get that stakeholder alignment and have continuous improvement, uh, whereby it’s, uh, you know, it’s a program that you would validate, uh, within, you know, your own sourcing process. Uh, then, then you can feel comfortable and, and the beauty of it, if you really think about it, the beauty of it is not always the expertise, although that’s critical. It’s also the fact that we are constantly adding new members to the group and we are adding more buying power. And presumably a, an independent company is not going to do that. Right. They’re looking for ways to reduce costs, especially in this type of environment. So we’re adding new power, adding new leverage, and ultimately delivering that downstream so that your program independently continues to be enhanced and improved. So I think it’s a combination of many things.
Scott Luton (00:20:37):
Yeah. And it’s, it’s the specialization too. That’s really, really important. That’s exactly what I mean, our I’ve already shared a lot of things and I’ve got already got I 12 pages of notes. However, that that generalist versus specialist is such a powerful component. And whether it’s you’re talking GPO, or you’re talking to other aspects of really savvy supply chain organizations, they get that. And because you can move faster with someone that can, uh, that can really determine the environment they’re in determined the lay of the land and determined. So not just six months to do due diligence, but maybe six days. So that really speaks volumes from what I’ve heard thus far. I think it’s also that, you know, you, you think about it this way, I’m somebody who’s good at negotiating contracts may not also be good at sourcing, right? And, and, and as RSM, you might be good at sourcing from this industry, but not that, and it just creates so much leverage to have so much specialization.
Greg White (00:21:41):
And I think it really, I mean, I’m just looking at this again, we’re talking about a relative newbie to procurement, but to me, when I look at it from a naive standpoint, it creates so much leverage for, for the procurement leader. And I would say even the buyer to elevate what they’re doing to more of an oversight, uh, management, uh, uh, managing to the metrics rather than managing to every minute detail. And that, that is so empowering for, for someone in that position. So I don’t know. I mean, uh, I’m sure you’ve seen that, but I feel like I have to go here because if we’re, because we’re talking about procurement and because we’re talking about GPS, if I don’t mention, if we don’t dive a little deeper on cost savings, I feel like I’m going to get crucified, um, in the comments of this. So tell us a little bit about how you help companies not leave money on the table and how your purchasing model or various models come together to make that happen.
Ara Arslanian (00:22:49):
Yeah, very well. I, I think, um, conceptually the idea of a lot more buying power sort of speaks on its own. Um, and I’ll talk in a moment about how we source contracts, because I think that’s very important for companies to understand, look, this has been vetted, it’s been validated and it has, and there’s a, there’s a distinct process that we use across the supply chain. Um, but, but let’s just back up for a moment if we could, because the cost savings and the way we deliver cost savings is unique. Uh, GS it’s piece price. Yes, it’s, service-based costing, that’s going to happen. And we are going to help you do that benchmarking through our internal team of analysts that will help you look at your program, compare it to what you could have with the group volume program and, and ultimately make the business case for you both quantitatively and qualitatively.
Ara Arslanian (00:23:41):
Um, but there are some things that are, are cost-related, you’ll get, let’s talk about the sourcing cost. Um, if you have an employee who’s got 2000 hours of time, a year and ft, right. A full time equivalent. And we find in some of our work that it takes as much as 500 hours to do one sourcing event. When you think about the analytics and the, uh, the down-select and the legal work, and then finally you are, you’re trying to get to implementation. Um, you know, that could take up a quarter to a half of a person’s time, depending on the complexity of the category. So where does that time go? Um, work at that time be spent if you implemented a GPO program and double your efforts with a better result. So the savings is real, but then let’s look downstream. Um, we’ve done some studies over the years, and we partner with a number of companies and, and results have shown that after an RFP, if you do an RFP on your own, uh, after 18 months, 18 months from the RFP date, roughly 60% of the value that you identified gets eroded, and that could be from product obsolescence, or it could be from product turnover.
Ara Arslanian (00:24:52):
Uh, it could be from a number of things, but most of the time it’s because the supplier is recouping their margin because they went deep on the RFP to win it. And that’s no shame. That’s the way that the market works with the GPO model. Our savings is really delivered through a complex or comprehensive sourcing process. Whereby we have a team of professionals who take great input. They use a balanced scorecard. Um, they rely on, uh, down selecting suppliers with the help of our membership and the expertise resonant within our membership. Um, we bring on supply partners that recognize the importance of account management, port innovation, so that there is future savings and value, total cost of ownership. Um, and they take an incubator approach. Um, I like to say that because our customers are viewed, our members are viewed as a client of choice with these flyers.
Ara Arslanian (00:25:47):
Now, why did the suppliers care, right? Why did the suppliers deliver a better program? Well, first and foremost, the GPO model, the group purchasing model and our install base of thousands of great companies allows them access that they wouldn’t otherwise have. So we reduce their cost to serve cost, to acquire, and ultimately they’re willing to put their neck on the line, um, with our powerful leverage to deliver a best in class solution. So it works really well. It’s a cyclical way, it’s a triangular relationship, but it’s a singular approach to constant improvement. And, and so as the audience wonder as well as do I really get cost savings? Yeah, we, we do. We measure it. Um, we document it, we compare it internally to, um, a lot of world-class programs and, um, you know, the results speak for themselves. And that’s why it’s been such a high growth industry. I can see the suppliers seeing benefit in the opportunity
Greg White (00:26:44):
To get to other members, right. The, uh, the stability of, of, uh, you know, pre probably pre-agreed pricing in some cases, and, and also the surety of there’s business out there, which they don’t have it necessarily if they deal with a company on an individual basis. So, yeah, I get that. You know, the other thing you made me think of is crowdsourcing. You said members who are helping to vet these, these suppliers, right? I mean, you effectively have a crowdsourcing model there. That’s, that’s really good.
Ara Arslanian (00:27:21):
We do. Yeah, we do. Uh, and, and, and it’s very fascinating. And I can point to over the years, a number of just wonderful agreements, uh, that have come into the portfolio as a result of a member, raising their hand and saying, Hey guys, take a look at this, let’s get the sourcing team on this. We’ll commit our volume. And let’s get, you know, other likeminded companies together, crowdsourcing to use your word, Greg, and, and let’s build a best in class offering. And, and it works, uh, in addition to the, of course, the due diligence we do to source and secure on, uh, you know, on our own.
Scott Luton (00:27:55):
All right. So now that we’ve really gotten a good understanding of your background, as well as, um, many aspects, kind of the framework of the Omnia partners model and some common, uh, aspects of a GPO model we’re going to spend the second half of today’s interview giving our audience, especially our business leaders in our law that are listening some free consulting advice. We’re going to really pick our brain own own, you know, why GPO, uh, versus some of the other models that are out there. And, and really, I think really empower our audience with some, some really helpful, uh, perspective and, and, and expertise, whether you’re working with Omnia partners or a group like Omnia partners or not. So, um, so you can send me the invoice that consulting invoice are for this, this, I feel like I’m getting a college degree in procurement right now.
Scott Luton (00:28:51):
All right. So, you know, business, as, as Greg, as you both have alluded to, uh, business leaders, perhaps unlike any time in recent history are really evaluating a number of new approaches, both strategically and tactical, uh, with global supply chain, without it, um, you know, procurement is front and center in that. So as we’re, as, as business leaders are really looking at their strategic procurement options, I’ve got some questions I want to pose to you and get your, and pick your brain a bit. Here are up. So first off, and you’ve spoken a little bit to some of these, but I wanna, I wanna get you to elaborate a little more, why in your view, why use a GPO approach versus a do it yourself approach like so many organizations use or any of the other models that are out there? What, what would you, how would you advise a business leader in that regard? Well, let be clear. I’m not
Ara Arslanian (00:29:42):
Suggesting it’s an either or, um, I think that the GPO is a, uh, valuable, uh, enhancement and extension to a supply chain or procurement strategy. Um, particularly when you’re looking at indirect goods and services, and certainly there’s a lot of play in the direct side too, but, um, when you look at an organization, they tend to view a lot of their indirect spend as tailspin, and they spend a lot of time sourcing and putting, um, uh, resources to secure an outcome that they could get in a quicker period of time with a blue chip supply partner and with a more compelling result and a frankly, a more compelling result that lasts over the course of the agreement, um, and continues to improve. So the idea of DIY is it’s not a negative, it’s just that, it’s one of those things where you have to be selective as to what you’re doing in house and what resources are you going to choose to use to help increase. As I mentioned at the beginning, the concept of spend under management, the more you can get your hands across the organization, uh, the more you are able to measure and control and drive improvement and consolidate, and you can’t manage what you can’t measure. I think we all tend to agree with that. Thank you,
Scott Luton (00:30:59):
Peter Drucker. Yeah, absolutely. So, so that’s a great clarification. So, so you all work a lot then with companies that might bring in, uh, Omnia partners on this strategic initiative or this certain product or program, is that an, is that an approach you use often?
Ara Arslanian (00:31:17):
Yeah. And it’s a land and expand approach. A lot of our members may jump on three or four agreements in year one and then year two because of our model and because of the model of, uh, you know, uh, of, uh, uh, our suppliers who frankly are also, and we have to spend some time, I think, talking about how our supply partners view our members and treat them with, with just this, this highest, uh, form of, of regard because of the fact that, uh, that they’re in this group, the point is, is that, um, they, yes, we, we absolutely, um, you know, continue to find ways, uh, to land and expand and bring more value over a wave type of approach, um, so that we are relevant, uh, as, as, as we go forward and keep in mind, we’re constantly sourcing and adding new agreements. So, um, what might be relevant for you today, uh, you know, or, or may not be relevant for you today could very well be relevant tomorrow,
Scott Luton (00:32:12):
Love that land and expand that that is so applicable in so many different ways. All right. So let’s talk about, um, some of the aspects that, uh, uh, of the business that GPS undertakes specifically, you’ve already kind of alluded to some of them, but kind of maybe give a sense of how, just how deep do you go and, and, and, and what all you can bring to the table to make it easier for, for our, for teams that are going through a lot of pain in 2020,
Ara Arslanian (00:32:40):
Or anytime. Yeah, it’s, it’s really important because I think if you think about the concept of a GPO group purchasing and you evaluate it, you have to look at where it’s matured. I think the concept of the call today has really challenged the thinking of the modern GPL. Uh, in the old days, it was, you know, three bids and a buy in your sourcing process. Um, and the GPO was just, Hey, where can I get my cheapest, uh, you know, office supply or something like that. Um, today it’s completely revamped. And while there are still elements of the old way, which is fantastic and still relevant, um, we source differently as I kind of alluded to in the way that we go about sourcing and onboarding and scorecarding. Um, but the real key is in some other areas, um, namely analytics, uh, we have just tremendous amounts of data that allow us to make sharp decisions and quick decisions and help our members see the value of an agreement now, philosophically and culturally, they have to come to the table.
Ara Arslanian (00:33:40):
They will and understand, look, we’re going to use the support of, of leverage into companies like Omnia partners, but the idea of being able to make the business, the data-driven case is important too. Um, but arguably our most powerful, powerful, uh, uh, value add comes from our supplier relationship management. Uh, we refer to it in Omnia partners as partner development, because we do view our suppliers as partners. Um, as I mentioned, you know, we have a big stick, we have leverage, we can, um, we can move markets to a degree, but our goal is not to crush the supply partners that we have. We are here to bring a very, very compelling contract that they’re inspired to bring to the membership to continuously improve. And as a result, our partner development slash supplier relationship management team focuses on finding strategies, finding ways to, um, enhance the agreements, take that incubator approach and, and ultimately help serve the clients.
Ara Arslanian (00:34:39):
And the final piece is, you know, in the days gone by, um, the GPS pricing was, uh, you know, sort of out there, public knowledge, we’re a little more sophisticated. Um, we have a team on my team that have client managers and relationship managers that are there to help members and prospective members evaluate agreements, um, and bring subject matter expertise. I’ll give you an example in at least in our company, some of the complex categories in human resources, which can be very challenging to navigate, uh, we have dedicated, uh, folks that can walk through those categories. Essentially, Greg, you, you laughed, I think you said free consulting or Scott, you said free consulting. I hate to say it, but that’s a lot of cases what we provide. Um, and I don’t hate to say it. I mean, it’s, it’s clearly put in place to help companies make a good buying decision. So anyway, the whole, you know, when you look at the whole ecosystem of, of what a good group purchasing organization can deliver, it’s not just quick contract with the lowest cost. It’s, it’s far more advanced,
Scott Luton (00:35:41):
You know, uh, we did have a little fun with that phrase, free consulting, but that’s, I mean, based on what we’ve learned about your model and, and the wealth of expertise and the wealth of experiences, I mean, the value added consulting goes with it. And, and in this day and age where you need more perspective, a more diverse perspective on how to navigate through some of the challenges of our time. I mean, that is a big part of the value. So, and then we had a little fun with it, but, you know, that’s a very real, tangible component here. Let me ask you a quick question. Cause you were talking earlier just a minute, I’m going to go about, um, you know, supplier relationship management. And I think as you refer to it as partnership development, um, do you subscribe to the belief it’s really important to nurture that relationship so that, so that accompany suppliers are really healthy.
Scott Luton (00:36:30):
Uh, you know, I I’ve, I’ve in my time in manufacturing, you know, getting yearly cost down letters and, and other requests to just get more blood out of the turnip. I mean, what was that called Scott, uh, cost down cost down. Yes, absolutely. And, and in some cases that it was whether they had a really thorough understanding of, um, of our, uh, business model or not, in other cases, it was real educated, but the request was the same speak to, you know, uh, the, the important perspective that, you know, if an organization is only as healthy as its suppliers and in some cases, right? Yeah.
Ara Arslanian (00:37:08):
It it’s, it’s, it’s a very pointed, uh, comment. I will, um, I’ll give you a couple of examples. Um, the most recent example is, uh, we recently launched a new category with a partner that does supplier risk management, and that has come, I mean, you want to talk about hot off the press. Uh, our members are just eating it up. They can’t get enough engagement to say, look, I’ve got a supply chain that I’ve got to understand the sustainability of my partners, particularly my key partners. And I’ve got to understand their financial solvency. I’ve got to understand, you know, where they are today in terms of, um, the business operations. And so we have seen that, uh, point being that there’s clearly a demand and a need for that I’ll even harken back to, uh, it was on 2008. Um, there had been a big movement.
Ara Arslanian (00:38:06):
There still is a big movement to organizations moving away from, uh, what we call w two employees to, um, contingent labor, where a lot of their staffing, um, was contingent or, or, or 10 99 and so forth. And when 2008, the economic crisis happened. And we saw in the, in that space, some of the staffing providers on the ropes, when all of a sudden to your point’s got maybe 40 to 50% of your staff and your employee is potentially on the ropes because your partner is who’s feeding you, those, those, that talent and those people is potentially gone overnight. Um, yeah, it, it, it keeps people up at night. And so, yes, it’s critical the quality of the supply partner, we source, um, the strategic relationships we cultivate and the listening to our members to make sure that they know, look the volume and the leverage are gonna bring the savings. And it’s, it’s that next generation of quality and total cost value that that really is going to separate. And I think companies in this space, you know, recognize that that, that maturity has taken place.
Scott Luton (00:39:16):
So what I’m hearing, just speaking for myself is while we’ve got to manage the suppliers, we’ve got to make sure and protect, getting a good deal for our ultimate client, right? Your client’s organization. At the same time, we’ve got to nurture and develop as you put it, the suppliers, there might be this there’s always opportunities that they go upstream, maybe where everyone benefits, whether you can take waste out, cost out you name it. So that holistic approach I think, is, is really valuable rather than just hammer meets now, which Greg I know is one of your favorite phrases you gotta think differently. Right? And then you’ve got to create where all stakeholders can win. Right. Greg, any commentary there before we move on with, with ARRA? Yeah. Two things. I think it goes back to specialization and the ability of a GPO to focus on so many areas.
Greg White (00:40:08):
I think about how linear your job could become as a, as a buyer or procurement professional. Um, and I also think about the fact that GPS like Omnia art, they’re in it for the long haul. They have a reputation to protect as well, and they protect the vendors to the benefit of, of the members of the, of the GPO. Right. Because they see the long game where an individual buyer or procurement professional might not in the moment. Right. And, and ultimately that accrues to the benefit of the company, like you said, you don’t, you don’t want to have, um, well, I think one of the things, one quote we saw from a story we did early on during this whole COVID crisis was it’s too late to make friends now. Right? If you need to go to a second source or an ER, or you need to ask something of your vendors, it’s too late, when the crisis is hit to, to ask a vendor, you’ve been screwing for years for a favor, right. So you have to treat them fair, but again, naive. But to me, the benefit seems so significant because you can get a really good price because of the economies of scale and treat the vendor fairly. We want that.
Scott Luton (00:41:34):
Yeah, absolutely. All right. So I think our moving forward in this, in this, as we’re, you know, kind of offering some insights and perspective to business leaders, I think you just mentioned some of the, um, both traditional and nontraditional product offerings that, that, that Omni gets involved in or GPS can get involved in any other examples that you’d like to share.
Ara Arslanian (00:41:56):
Well, you know, there’s a lot to mention, but I think really if you distill it down across the verticals, I mentioned, and I’ll give you a couple of examples, you know, in, in, in corporate services, um, when you think about the traditional goods and services, like an office supplies or furniture, and some of the corporate materials, it, when you’re talking about hardware and, um, and peripherals and, and, and print, uh, and, and some of the technology, uh, uh, offerings that we develop travel with, um, travel management and jet services and so forth, um, the list goes on and, and again, with 400 categories, um, you know, too many to name, but, uh, the reality is, is that all of them have a specific discipline that has been applied to make them what we think to be, um, you know, very compelling and worth, uh, worth a look.
Ara Arslanian (00:42:47):
And, and Greg, I do want to come back to one quick point, you know, you talk about, um, supplier sustainability and in this covert environment, um, yeah, the, the GPO was able to pivot pretty quickly, um, outside of healthcare and government, you know, we, we were third in line, uh, to be perfectly honest with access to some of the materials early on, on the PPE side. And we still, to this day, as part of our group, um, you know, have access, not just from our supply partners, particularly those in the industrial supplies and, and, and MRO space, but just in general, our ability to move some of the supply chain lines in our favor on behalf of our members. Uh, you know, I think that speaks volume to, uh, especially given, you know, mitigating circumstances that we’ll face
Greg White (00:43:31):
Thought about that you’re at, at, or near the top of the list. Right. That’s and that can be kind of a unique, um, advantage to work with Omnia partners. What else would you, when you, when you think about the different categories, what else really, um, in gosh, 400 different agreements, what else would you really point to as being really unique about, um, your capabilities?
Ara Arslanian (00:43:53):
Well, I think two things, one that from a category perspective, uh, the idea that, you know, everybody can sort of get their arms around tales Fandor indirect spend and not all of it’s tailspin. And let’s be honest. I mean, there’s several millions of dollars tied up in certain indirect categories, for example, like pharmacy benefits, um, and, and others. Um, but we focus on both indirect and what we call direct materials. So the things that can help on the production side, on the OEM side, uh, regardless of your definition, clearly there’s, um, you know, there there’s value to be had. Um, so, so we really look at our portfolio at a category, um, and say, where can we be relevant? Where can we add new agreements? And, um, and so I think it’s important for your audience to know that the traditional GPO model is not just the standard categories that they may have thought of in years past.
Scott Luton (00:44:44):
So earlier you talked about gone, basically gone are the days of three bids in a bar. I love that. Um, you know, we’ve heard a lot of pain about the sourcing component in the world of procurement. Some folks are really good at it. Some folks really struggle at it. I’ve been involved organizations that are both, um, let’s, uh, and you’ve already, um, so you’ve already spoken to some of the challenges that exist, uh, for businesses and procurement teams where the GPO model can come in, but I want to make sure we, we, we capture anything else that, that our listeners really need to understand about these, these problems. What else can the GPO GPO model really effectively address when it comes to problems that procurement teams are facing? Yeah.
Ara Arslanian (00:45:30):
Um, a very important point of directness, and sometimes we don’t think of it this way as procurement leaders, but our suppliers are evaluating us just as much as we’re evaluating them. And they know if you’re a good customer or will be a good customer. Um, and while an RFP oftentimes, and may be necessary for certain categories in RFI and RFP, um, because let’s face it, right. I mean, people look at an RFP to sort of level set the market. Um, what our challenge is to the audience is that number one, not everything needs to be RFP. Um, there is a lot of low hanging fruit that can quickly be flipped and get better results through a GPO, with a flexible model and with a better supplier relationship. Uh, and to that point, as supplier partners are evaluating you as a customer, they are also recognizing that if you are part of an aggregated group and part of the leverage and part of the guidance and the sheet gives sort of the, uh, stewardship, if you will, of somebody like an Omnia partners, uh, they are going to treat you differently. Uh, they are going to treat you with a customer of choice mentality. So the RFP isn’t the devil, but it is absolutely something that you need to think about long and hard when you have limited FTEs, limited time, and a whole lot of categories, you could potentially get your hands on to drive that spend under management number up, you got to have better strategies than just, you know, let’s do it ourselves and source more. You,
Greg White (00:46:59):
We need to change the old adage though. The road to hell was paved with RFPs. I don’t know if I want to be responsible for minting that you don’t have to claim that you can redo that. We’ll put Greg’s name beside that one, but that’s all right. So I want to switch gears a little bit here because overwhelmingly most of the folks listening to this conversation have current incumbent suppliers. So let’s talk about how working with the GPO impacts those current supplier relationships.
Ara Arslanian (00:47:30):
It’s a good, good question. I E we are not in the business of flipping existing incumbent business over to a, um, you know, from one supplier, sorry to the same supplier, you know, just to, to cost them out. Now that is, I say that tongue in cheek, because the reality is, is there could be some circumstances like an end of a contract situation. Um, you know, the, the program is run its course and, and there’s, uh, there’s a need for, um, you know, a wrap, if you will. Um, and in some cases there are situations where the supplier may be. Isn’t just performing at the level. It needs to, uh, at a local or regional level from an account representation standpoint, and it isn’t in the GPO program yet. So by coming into the GPO program with Omnia partners, it now is going to have that extra layer of support and guidance to make sure that any issues should there be any are rectified.
Ara Arslanian (00:48:26):
Um, but the point of it is, is that suppliers like to work with the GPO. They do not look at us, can tell you with a contentious mindset, if they have an existing incumbent relationship, they will do everything they can in most cases to try to move it to the group purchasing model, because they realize that it’s going to potentially get more share of wallet for them, because it’s obviously going to help open up, um, uh, some new analytics and, and help us look at the spend and find areas where compliance can be found. It’s also going to add, as I mentioned, an extra layer of support and results have proven this out. I won’t bore you with more details, but results have proven that the retention rates with those incumbent suppliers is astronomically higher when it’s within the GPO program. And no, no, yes, no supplier wants to keep going back to RFP every three years for the same process.
Greg White (00:49:17):
That’s probably counterintuitive. I would think to the way a lot of suppliers approach or expect things to happen. They probably expect an immediate threat when they sign up right now.
Ara Arslanian (00:49:30):
But, but, but most, most of the ones that we work with that understand and see both sides of the ledger, understand that, um, it’s a very powerful tool to leverage the GPO.
Scott Luton (00:49:41):
I think it goes back to that balance scorecard approach that you referenced on the earlier end is it’s not just price, it’s being more holistic and smarter and bigger picture. That’s an important part. Undoubtedly always will be in supply chain, always will be for that matter for consumers, right? As consumers, all of us make certain decisions. A lot of it’s about price, but I really like Greg, that’s a great point because I think it is counter intuitive. Um, you know, the current suppliers, maybe the prevalent thought is, Oh gosh, here comes a GPO, get ready to get pounded. But, but I love hearing that retention goes up in your experience. That’s a wonderful point that folks didn’t go about. And if they’re great suppliers and nothing, I heard kind of putting pieces of this thing together. I’m a little bit slow here are so with me. But if this supplier’s doing a wonderful job and there’s lack of visibility as you, as, as the GPO comes in, they’re gonna get more visibility, which could, should bring them a lot more business within this primary organization. Or maybe some others that are part of the GPS. I mean, this is a wealth of opportunity. It can be for these, these incumbent suppliers, right? Indeed. Yeah, it is.
Ara Arslanian (00:50:50):
It’s one of those situations where very few supply partners, particularly in a distributed goods environment have a lion’s share of the spend. And so the ability for us to help them gain more share wallet, as I mentioned, it really matters and their profitability and the work that they’re doing now, keep in mind, okay. When a supplier is providing a very compelling offering, they’re looking at it through the lens, even though their cost to serve may be specific or unique for that one individual client. They’re looking at the Omnia partners relationship holistically, and they are seeing that, you know, and I can only speak for our organization, but we’re adding hundreds and hundreds of companies a year that are opting in and saying, I’ve got to at least explore what’s going on here. Uh, and that’s just private sector, not even our public sector business, which, you know, carries its own weight. Um, so, so yes, uh, the, the eyeopening, um, engagement, we sit in the middle between a supplier and member relationship that is built on the idea of trust and mutual growth and, and mutual profitability. And I think it’s worked wonders really, really believe in the power of that model.
Scott Luton (00:52:00):
All right. So one last question. I’m gonna turn it back over to Greg here in just a moment. Um, and to kinda in a nutshell, when it comes to certain businesses that may benefit from particularly from, uh, from partnering with the GPO, what, what are a couple of minutes?
Ara Arslanian (00:52:15):
I gotta tell you, you know, there are different levels of maturity in businesses, correct. I mean, you know, you’ve got companies that are high powered organizations, um, they’re dialed in, uh, they have, uh, site relationships, uh, executive support top down, fully, fully engaged. And then you have some that are just sort of earlier on that maturity, uh, uh, chain. We can help all, uh, you know, I know that maybe sounds a little bit tongue and cheek, but we can, we can really help companies, uh, that are more sophisticated to those that are just getting started because there’s a need for efficiency, no matter who you are. Uh, and you know, we, so we could fill in ideally, right. The type of company that we tend to work with, uh, is typically somebody that is, uh, I mean our sweet spot. If you were to really look at our companies, typically somebody in the range of about a 500 million in annual revenue up to 10 billion, um, we certainly help fortune 100 sized companies, but, um, but it’s really more around the number of employees, the sophistication, uh, where you are in your journey of transformation. Um, and I have just as much enjoyment helping a small emerging company or a mid market company that is highly engaged as I do some of the behemoths that, uh, that we work with that are, you know, uh, 80 to $100 billion in revenue. Um, but, but it’s, um, so there’s no one size fits all, but it’s, it’s dynamic
Greg White (00:53:45):
As you talk about the maturity curve. The opportunity for inefficiency, even in a mature organization is much greater because I would imagine mature organizations are typically the bigger organizations. And so that’s a different kind of opportunity than a smaller organization, which might not have good compliance or organization, or, you know, they might have some opportunities for enhancing their operations. Um, even if they’re relatively smaller or compact.
Ara Arslanian (00:54:13):
Yeah. That’s a fair, fair point.
Greg White (00:54:16):
So to continue my education now, I think we’ve moved to MBA and in GPO, um, to continue my education, I’d love to understand, and we’ve talked about why companies would, or wouldn’t be part of a GPO, but what trends have you seen in terms of the GPS themselves or movement towards or away from, I doubt away from GPS, but whatever it is, and, and how have GPS changed, evolved over the last couple of decades,
Ara Arslanian (00:54:48):
We’re seeing tremendous adoption. Uh, and I don’t even say that, uh, you know, sitting in this seat, I say that because it’s, it’s real and it’s, it’s it’s happening. Right. Um, and it’s going to be very fascinating, Greg, I think coming off of, of where we are in these challenging times, and we’re seeing employees furloughed and, and, and the, and the challenges within big and small companies, the need, the need for, um, efficiency, savings, um, even support in the demand management side to help rationalize suppliers. It’s just going to be something I don’t think it’s unprecedented, it’s something we haven’t seen before. And so I think the continued, the adoption to GPO was already at a rapid pace. I think we’re going to see this thing just completely propelled to a new level when that happens. You know, we’ll see the spend levels may not be where they were before everything hit, but the need for a different mousetrap.
Ara Arslanian (00:55:47):
It just, it, you can see it. So, uh, I think the short answer is the growth trajectory, uh, while it was already moving that direction is going to continue. Um, we are seeing, you know, very few we’re very few competitors in the space. Um, I think most of the GPO industry, uh, has been primarily in health care and food service and some of those more traditional ways that maybe it was born out of. Um, so in the private sector, uh, and in some cases in our public sector, uh, you know, it’s really wide open. There’s a lot of Greenfield. So, uh, our challenge has always been educating the buyer, educating like forums like this, to make sure you know, your options. And, um, and we’re excited about that. We’re ready to meet that demand.
Greg White (00:56:34):
So you mentioned these times, right? COVID-19 and this seismic societal disruption and the impact that it’s had on companies, people supply chains. And one of the words we hear a lot is two of the words we hear a lot are agility and resiliency in, in regard to supply chain. So I’m curious how, how a GPO helps an organization enhance or, uh, enhance that resiliency, I guess
Ara Arslanian (00:57:08):
I’m not sure there’s a specific answer other than, you know, we are, uh, we’re here as part of a broader strategy. Um, we are not a, um, you know, we are not a, uh, uh, an outsourcer in the sense of a BPO where you’re, you know, you’re paying tens of millions of dollars potentially to have somebody overtake your, your, your procurement and, and, and the functions associated with even deploy, procure to pay strategies and so forth like that. We are, you know, we don’t hold inventory. Um, we don’t, uh, we don’t bill you we’re, we’re, we’re not a fee for service model. So the resiliency we bring is an enhanced relationship with your supplier. The potential for, for greater resiliency is through the supplier relationships and their, um, their ability to our ability to help consolidate package a better program, allow your business to be more sustainable longterm, and ultimately, uh, you know, allow your resources to do more with less and redeploy them to more strategic initiatives. So, um, I’m not sure I answered your question, but I can tell you that, you know, the GPO, it fits a puzzle piece that that’s essential. Yeah.
Greg White (00:58:18):
I think you did, because as I reflect back, you mentioned being at the top two or three on the list, right. As a, as a preferred customer, right. Clearly that helps with resiliency. If, if you’ve got two sources, let’s just say for PPE or whatever, and both of those are in the GPO, you’re N you have to be at, or near the top of the list for both of those suppliers. So, um, yeah, probably answered. I probably already knew the answer to that question, but thank you for bringing me back around to it. Yeah. If I can add one thing, what I’ve heard is with a stronger supply base, a stronger supply chain, deeper relationships there, you’re going to be more resilient, no doubt. And you’re going to have less gaps. And that’s what collectively, what I’ve heard here thus far today from, uh, R is, is that those resiliency, uh, adults, I mean, these are, these are some critical gains that the savviest organizations that are, that are treated, that are acting like it’s 20, 20 Greg.
Scott Luton (00:59:23):
We pick a lot of 1980 and 1982, but you know, the, these, these serious savvy organizations that are treating it like it’s 2020 and are, are diving head first into this complex global business world that it is, I mean, big resist re resiliency gains here to be had. Well, and I think, and I think a lot of that has to do with, with the, the credibility, I guess, I don’t know what other word to use then credibility and, um, and preference that a GPO brings you by putting you at the top of the list with that vendor. You’re right. That buys a lot of favors, favor, whatever it is. Right, right. Um, so there’s a few terms that we’ve used today, and one of them is strategic sourcing. So tell me a little bit about how you, you all at Omnia partners, how you do, you know, how you’re, you’re strategically sourcing, um, and, and a little bit about what that, um, what that brings to your, to your members.
Ara Arslanian (01:00:33):
Yeah, Greg, um, and, and I, I think I touched on just briefly before, but, uh, we do have a really solid team of professionals that are out there identifying new contracts, new categories, both from what our members are telling us both from our own knowledge. And, um, and, and the sourcing process is, is very effective. Uh, it is one where, uh, we are building in, as we talked about that total cost of ownership model, and we do our own supplier risk evaluations. Um, and perhaps most importantly, as I touched on there’s a partner development slash supplier relationship group that keeps that contract honest, not just from a competitiveness, but from a supplier performance standpoint. And that’s great for any company, um, that may not have that type of, um, discipline. So we’re, uh, we’re really pleased with the sourcing process. Uh, we continue to add resources and I think most GPS recognize that that is, uh, that’s, the lifeblood is to have a very good powerful portfolio. And, uh, that’s why we’re so thrilled and grateful that, uh, we’ve been able to, to, to have that, that, that mix.
Greg White (01:01:40):
Has there ever been a situation where you have recommended someone off or recommended the group on to a particular supplier, because you’ve just seen such unbelievably bad, or that, that might put you in a bad situation or really exceptionally good performance that, that you would just bring somebody to the entire membership and go, wow. You ought to be doing business with techs.
Ara Arslanian (01:02:07):
Well, you know, do the short answer on the latter part of your comment is every supplier that our contract that we identify, um, even if it’s a bolt on to an existing agreement, for example, one, our partners, supply partners may have a new product or service that goes over and above, uh, you know, the agreement we already have in place. We will always do what we call a launch plan or an implementation. Um, and most GPS worth their salt should do this, um, which is helping get that information out to the stakeholders within the member company, helping to educate the buyer, whether it’s through webinars or through, um, you know, email or through just word of mouth, we’re constantly promoting those agreements and let’s face it. We wouldn’t have put a agreement in place if we didn’t feel it was well vetted. Uh, so yeah, we do push and evangelize to get that buy in that adoption.
Ara Arslanian (01:02:57):
Um, you know, I mentioned this supplier risk program, we just put in place, we were continuing to educate the market on, Hey, even if you use, don’t use our program, be aware that this is something you need to be doing. So obviously we’re here to bring you a resource, but nevertheless, um, and, and a, a perfect candor. Yeah, I I’d say over the years, maybe in, uh, my, my 13 years of being in this, this business, um, this particular company, I would tell you that, uh, you know, maybe one or two that, that I’ve seen where a supplier over time, uh, you know, maybe through a merger and acquisition, uh, didn’t meet the Mark, uh, you know, w we move on and we learned, but that’s, that’s really rare.
Scott Luton (01:03:40):
All right. As we begin to wrap up this interview, uh, today, this, uh, podcast, uh, are, uh, let’s, um, let’s talk about some of the differentiators and, and, and Greg, and I probably can build a list already from what we’ve heard. I mean, from the transparency you bring to the table, uh, the value, but also the data-driven the scorecard system, uh, the supplier investment and development. I think that is such a one that, you know, hearing that retention that you spoke on earlier is such a important takeaway from today’s conversation, because to be fair, some folks, when they hear GPA GPO, they may think of the phrase, there’s a new sheriff in town and new rules and regulations. However, to hear that increase retention, and then how are you going to make these great, these strong suppliers, more visible, what they’re bringing to the table? That’s a really important takeaway, but what else, you know, in your view, really separates Omnia partners from others in the GPO marketplace, too
Ara Arslanian (01:04:36):
Things, uh, one is our, our breadth of offerings. And I’d be remiss if I didn’t say that, you know, we have a, an outstanding marketing and support team to help member companies, uh, promote our, our programs. Let’s face it, a procurement leader who wants to leverage the GPO and is, is, is, um, advanced in their thinking to say, I want to go ahead and explore this. They’re going to need a little bit of help to move that across the organization. We’re there to do that. And we have tremendous marketing resources, both in the public and private sector to help achieve, you know, achieve that. I think the other thing is speaking of public and private in our business, the amount of access that we have to suppliers that are talk about 400 agreements and growing, but we’re top five, top 10 customers of these flyers.
Ara Arslanian (01:05:26):
Our members are top five, top 10 as a result. And so our access to senior leadership and, and, and, and all executives at the supply partners and our ability to have a worldview from a lot of different categories. And one thing I didn’t talk about, which I think is really critical as we wrap, is we don’t have a one size fits all per category. We have multiple supply partners that could service one category competitors, if you will, that are playing in the GPO sandbox and doing it, I’m doing it gladly. And with no sense, I mean, they’re competitive, but no sense of, uh, you know, we’re, we’re robbing Peter to pay Paul they’re, they’re very, uh, you know, partner oriented. So our breadth and our scope and access to our supply community and the markets and the industry, there’s nobody else that sits in that type of seat. If you think about it, there’s no other company out there that really, uh, you know, can see this many suppliers, this many industries and this many world-class organizations and be in the epicenter of that. And we’re very, we don’t take that lightly. And I think that’s what makes us far more unique than, than any players in this face. I think it makes the GPO space, you know, far more unique.
Scott Luton (01:06:37):
What I heard a lot today is it’s just how you’re an extension of that procurement team, whether it’s in the, you know, the CPO sea level or to CFO level, or kind of down through the ranks, all that you bring to the table. And then the other thing I want to go back to, because it’s so important in 2020 when there’s, um, there’s a lot of generalists out there, right? And then we’re not just talking GPO, we’re talking just in general, no pun intended, but the specialization and how you do leverage this community, you bring this, this, you know, you’re gonna bring the SWAT team for some of these unique challenges that we have in global business in 2020. And that really sticks out from what I’ve heard today. Uh, so before we give our audience, make sure they know how to check in with ARRA and connect, Greg, what, you know, what’s one or two things you point to that really, it sounds like there are really differentiating factors here with Omnia partners.
Greg White (01:07:28):
I have to say are, has to be one of them. I mean, if anyone was literally born to do their job, it’s our, I mean, if you go all the way back to the beginning of this course, um, which I hope to get a certificate at least four and maybe a degree for, but if you go back to the beginning, I mean, born into an entrepreneurial family, um, you know, understands both the value of negotiation and the value of collaboration and partnership and, and is customer obsessed. To me, that’s a huge differentiation because Scott, you know, that I believe that an organization is a reflection of their leader. And if this organization is a reflection of aura, then they are a venerable venerable force in terms
Greg White (01:08:16):
Of getting companies, what they need in terms of their procurement spend and optimization. I don’t know what else to call it besides optimization, because it is, as our said, many times so much about, so much more than, than just cost savings. Well, put people are made of companies or sorry. Companies are made of people. That’s what I meant to say. Companies are made of people. And if they’re made of people like, like, are that, I mean, they are going to be incredibly effective. Sorry to talk about you. Like you’re not here. No. All right. So I imagine that other folks are gonna want to tap into, uh, uh, your, um, knowledge and expertise are and connect with Omnia. So let’s make sure folks know where would you point people to, uh, to connect with you in the company? Yeah,
Ara Arslanian (01:09:04):
Well, I think the easiest way is to get to our website, uh, Omnia partners.com, uh, down, uh, in that side, you’ll have access to both sides of our business. You’ll see our category offerings, you’ll get a little bit of, uh, how we do it. Uh, and so I encourage folks. It’s just a wealth of information and we have a ton of, uh, obviously it’s a little bit different now, but we have a ton of educational, uh, content at both in the market and, and video posting there. So please, um, take a, take a browse of that. Uh, also I’m a huge fan of getting to know your audience and, and, and making connections. So, um, I’m, I’m out there on LinkedIn. Uh, I’m sure my contact information could be shared off of the podcast here, but, uh, please, I encourage anybody who is interested or just wants to reach out and talk about issues in the space. Um, you know, please do so. And, and, and I’ll gladly respond in kind, so,
Scott Luton (01:09:58):
And we’re going to make it easy for audience as always. We’re going to include social tags and some URLs in the show notes of today’s episode and that’s right. Okay. Thanks. And, uh, stay tuned for, you know, as, as our mentioned, uh, thanks for the segue aura, as he, as they look to get the connect with our audience more, we’re going to have Laura on a, on a live stream and Omni partners from the live stream in the next month or so. So stay tuned for that date. Uh, we’ll, we’ll be sharing that and we invite your comments and your questions as we continue this, this enlightening conversation, Greg, more free consulting from aura. Right. All right. I can see people lining up already. That’s right. I’m saving questions myself. Well, this has been a really informative and enlightening, you know, I’ll be the first person to tell ya, uh, Greg, you used the phrase naive mindset throughout the conversation. I, by no means am a GPO expert. So I learned a lot through, and hopefully have my certificate in the mail, uh, through today’s conversation. So, uh, aura, Arslanian senior vice president with the, with the private practice at Omnia partners. Thanks so much for your time today.
Ara Arslanian (01:11:07):
Thank you guys. Really appreciate it. And, um, and look forward to continuing the discussion down the line. Thanks to your audience.
Scott Luton (01:11:14):
Thanks so much. Absolutely. All right. So Greg, before we, before we sign off here and we’re looking forward to that live stream, uh, as, as a, as a next step with, um, you know, getting our audience to ask their questions and share their perspective, especially in the world of procurement, what’s a, what what’s one key takeaway is we were at, why wouldn’t you do this? That, I mean, that’s, I mean, again, naive mindset, right? I’m not in the industry, but I do think about how this aligns with finished goods merchandising and purchasing. And I think, you know, the whole stay in your lane mindset of long ago in, in, at retail, at finished goods level, we separated the merchandising, the selection of suppliers, the negotiating of contracts, the determination of the products that were necessary for the business, from the quote unquote logistical aspects of it from how do we optimize the supply chain?
Greg White (01:12:13):
How do we, um, you know, how do we assure compliance to those things? And it’s, and the reason that that happened is because it was very rare that a person had both of those skillsets. So as it often comes down to a single person, this seems like a really logical solution to me. And again, just looking at it from a more merchandising finished goods standpoint, it makes perfect sense. Yeah. The market has never been stronger for true expertise in 2020. So good stuff here really big thanks to our, and the whole Omnia partners team, hopefully to our audience. They enjoyed it as much as we did a stay tuned for next steps. As we continue to offer up this expertise, Scott Luton here on behalf of Greg white and supply chain. Now thanks to our audience for tuning in. You can learn more at supply chain now, radio.com, uh, where we have other shows and live streams and podcasts. You name it. Uh, we’ll wrap on this challenge as always, Hey, do good give forward and be the change that’s needed. And on that note, we’ll see you next time here.
Would you rather watch the show in action? Watch as Scott and Greg welcome Ara Arslanian to Supply Chain Now through our YouTube channel.
Ara Arslanian is the Senior Vice President, Private Sector Sales. In this role, Arslanian is responsible for the strategic growth of the company’s portfolio of leveraged agreements in the Fortune 1000 space. Throughout his 10 years with Corporate United, he served in many leadership positions, which included having direct oversight of commercial corporate strategy and the establishment of a formal category management group. Arslanian regularly engages with both procurement and supplier executives across a variety of industries and his efforts have helped shape the concept of the modern GPO. Prior to joining OMNIA Partners, Arslanian was the Senior Director at the Council of Smaller Enterprises (COSE), where he was instrumental in establishing leveraged purchasing agreements and affinity programs for small and mid-size businesses. Before that, he served as both a sales and distribution leader for McMaster-Carr, a privately held industrial supply provider, specializing in the distribution of maintenance, repair and operation (MRO) products to a variety of industries. In his role, Arslanian led a technical sales team in the positioning of product offerings, while directing the inventory management and financial controlling of over a half million SKU. Arslanian has extensive experience in the field of consultative selling, channel development and operations management. He has spoken at numerous industry events, authored MRO / distributed goods industry reports, and served on numerous panels outlining the trends in the supply chain space. He has been recognized as a six-time Supply & Demand Chain Executive “Pro to Know” in the years: 2014, 2015, 2016, 2018, 2019, 2020.
Greg White serves as Principal & Host at Supply Chain Now. Greg is a founder, CEO, board director and advisor in B2B technology with multiple successful exits. He recently joined Trefoil Advisory as a Partner to further their vision of stronger companies by delivering practical solutions to the highest-stakes challenges. Prior to Trefoil, Greg served as CEO at Curo, a field service management solution most notably used by Amazon to direct their fulfillment center deployment workforce. Greg is most known for founding Blue Ridge Solutions and served as President & CEO for the Gartner Magic Quadrant Leader of cloud-native supply chain applications that balance inventory with customer demand. Greg has also held leadership roles with Servigistics, and E3 Corporation, where he pioneered their cloud supply chain offering in 1998. In addition to his work at Supply Chain Now and Trefoil, rapidly-growing companies leverage Greg as an independent board director and advisor for his experience building disruptive B2B technology and supply chain companies widely recognized as industry leaders. He’s an insightful visionary who helps companies rapidly align vision, team, market, messaging, product, and intellectual property to accelerate value creation. Greg guides founders, investors and leadership teams to create breakthroughs that gain market exposure and momentum, and increase company esteem and valuation. Learn more about Trefoil Advisory: www.trefoiladvisory.com
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