As chief procurement officer for one of the world’s largest independently owned catering companies, John Krebs utilized group purchasing organizations to assist sourcing of his company’s food and supplies. “The staff I had was never enough to get to all the products; there were always too many competing priorities to cover all the needs,” he says. “However, these group purchasing organizations (GPO’s) I relied on for purchasing had limitations. They could bring an initial savings but never assisted in getting me to the next level.”
When he established his own (company), Axis Purchasing, in 2006, he was determined not to take a hands-off approach with his own clients. “I’ve found that other purchasing groups just put you on a portfolio, but don’t show you what to do with it,” says Krebs, Axis Purchasing’s CEO. “With us, you get someone who helps you out, not just a portfolio of good deals.”
The Purcellville, Va.-based group purchasing organization has access to a portfolio of more than 100,000 SKUs exceeding more than $19 billion in total leveraged spend. Axis utilizes more than 325 manufacturers of national brands including Kraft Foods, Heinz, Sara Lee, Hormel Foods, Tyson, Dole, Dannon, Land O’ Lakes and ConAgra Foods.
Products offered within the company’s portfolio include:
•Food products such as poultry, fish, meat, dairy, breads, desserts, appetizers, pizza, spices and beverages
•Fresh produce
•Disposable supplies including containers, cups, utensils, paper products, plastic wraps, plates and can liners
•Chemicals and cleaning supplies
•Office supplies and printing
•Smallwares and equipment ranging from coffee pots and cooktops to walk-in coolers
Axis also offers logistics consulting and other services including linen and laundry, fryer cleaning, armored carrier, wireless services and more. The organization recently added a fantastic partnership with Grainger for plant maintenance, repair and operations purchases.
Axis assists a diverse membership that includes multi-unit foodservice operators as well as lodging, education, healthcare, corrections, gaming and other customers. “We identified savings of a combined $15 million for our members in 2014,” Krebs notes.
Adding Value
Axis distinguishes themselves from other purchasing organizations in a number of ways, including allowing theirs customers to choose their suppliers and products instead of mandating distributors with a predetermined manufacturer product list. The organization is distributor-neutral. “We don’t dictate to our customers what they should buy and who they should buy it from,” Krebs says. “Consider Axis as having the leverage of billions in combined foodservice purchases with superior costs and advisor so you know the market and have the right information to make the best decisions.”
The company offers three main services that generate value for their customers. The first of these is offering manufacturer rebates and incentives to members. These are paid to members on a monthly basis. “Other purchasing groups can hold onto manufacturer incentives or rebates for quarters, half-years or even a year; we turn them over right away,” Krebs notes.
The second value generator involves negotiated contract product pricing with suppliers. Product contracted pricing reduces the product cost to the distributor and thus a lower invoice cost to the purchaser.
The third major differentiator between Axis and its peers is their ability to provide in-depth spend analysis. Member suppliers report purchase data to Axis, which will analyze what is being bought, the specifications of the product being used and what the market offers. The results are recommendations on purchase changes that lower costs while maintaining or improving quality,” Krebs says.
Axis identifies alternative, lower-priced products that meet their members’ quality standards and compares them to existing purchases. “This is where the gold is in our organization. Alternative product recommendations can far exceed simple price savings. This is what helps our customers improve year after year,” he adds.
The company also analyzes spends based on consistency. Axis helped one member who was purchasing multiple brands and quantities of liquid eggs narrow down their buy to just a few brands, which ultimately helped improve the quality and consistency of their food and saved them $156,000. “These are things I think people would be doing themselves but don’t have the time or staff to handle,” Krebs says.
Here to Help
One of the biggest obstacles in Axis’ mission is building awareness and understanding of the organization’s true intent. “We have members with no purchasing departments and members with fully staffed purchasing departments, and we bring value to them both. We’re not here as an outsourcing opportunity to take away purchasers’ jobs. Our foodservice operators do not have the time, resources, and/or leverage to efficiently source most food and supplies,” Krebs says. “We help companies focus their strengths in the most important areas: customer service, branding and growth instead of spending all their time trying to work deals within their supply chain.”
Members are not required to sign long-term agreements. “We have an open-book policy here,” he adds. “Our members see and understand everything we do. If they are not completely satisfied, they can leave at any time.” Even so, the company maintains a 99.9 percent retention rate.
Axis continues to grow their member base and services as well as their internal capabilities. “We will continue to grow and increase our abilities well into the future,” Krebs adds.
To learn more, contact Axis Purchasing now at 703-310-7607 or email info@axispurchasing.com.