MDT Interview | Norbert Riezler, LVS: Macau is ‘our center of excellence  for furniture buying globally’

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Meet Norbert Riezler, an Austrian-born American, in his 40s, who holds two key positions in Las Vegas Sands’ management and strategy.

His double-task is to make sure the giant casino operator buys quality products and services at the best price and operates with minimal wastage both for the company and Planet Earth.

Along the way, he is to implement policies globally in procurement and sustainability for all companies of the LVS galaxy that stretches from Macau to Singapore and the USA.

The global approach to procurement, although, he admits requires local small and medium suppliers to overcome hurdles, has helped some to grow exponentially. Such is the case of an old and small office furniture factory in Areia Preta. Ten years after partnering with Sands, the manufacturer is supplying LVS and competitors in Macau, Singapore, Vegas and elsewhere with its innovative line of casino furniture and accessories. It’s now a global and large scale business, employing over 350 people.

Riezler points out several other examples where the casino operator helped SMEs grow with the expansion of Sands China. SCL procurement from local companies in 2015 stood at MOP14.2 billion, or roughly 80 percent of total procurement – a 36 percent increase over 2014. To August this year, purchases from Macau companies stood at MOP9.8 billion, of which 1.2 billion was from SMEs.

What’s more, Norbert Riezler brings environment-friendly practices inside-out, down the chain of suppliers – either by example, training or policy requirements. The sustainability chief trusts “there is hope” for the planet, “if everybody contributes,” and reveals there’s something more on the cards – recycling cards, to be precise.

He was recently in Macau for the annual meeting of procurement chiefs in Asia, when he met with the Times for the interview.

Macau Daily Times (MDT) – How do you see the major differences between the procurement here in Macau with SMEs and companies and the other places that you oversee, like Singapore or Vegas?

Norbert Riezler (NR) – The differences are actually not that much to be honest. We have a global organization structure and our processes, our systems are pretty much exactly the same around the globe. Our procurement organization is involved in all aspects of the operation. In some companies, procurement is only involved in certain areas, but for us the range of goods and services we buy is wide. So from hiring designers and architects, from doing construction contracts, [and] once the operation is up and running, from gaming to IT to marketing procurement to the various labor services, transportation needs, food and beverage – it’s actually easy to describe: everything that you see, somebody needs to buy. So from that aspect, it is the same globally.

MDT – How do you apply the global strategy to Macau?

NR – Globally the processes, the systems are virtually the same. Now, the suppliers around the world are somewhat different. We can have numerous filters that we look at in order for us to decide how we set up the structure. We look at [whether there is] a chance to standardize the product and service across all of our properties. Are there economies of scale that we can leverage by buying larger amounts? How is the supply base structured? Are they global powerhouses or are they regional or local suppliers? Then, where do we have the center of expertise? We then decide how we set up the organization and how we structure the buying. For food buying, the tastes are very different in each of the regions. Suppliers are often a little bit smaller. So we have unique interfaces at each location or in other areas. A good [example] actually in Macau is for furniture. The [Macau] supply base has become very much a global supply base. In Macau, we have our center of excellence for furniture buying globally. So I have no furniture buying for the organization in Singapore. The team here in Macau we consider to be ‘best in class’ in our company, to buy the furniture, to work directly with the manufacturers and with the suppliers.

MDT – You launched in 2015 an initiative to help the local supplier support program with SMEs and the Chamber of Commerce. What is your estimate for this year’s results?

NR – Yes, we actually work very closely in each location with the local community and local suppliers. We realised that there was an opportunity here in Macau to work with the Chamber of Commerce. We were the first company that did so and I think since then some other companies have followed suit.

There are three different categories. The small and micro suppliers, the ‘made in Macau’ and the third category is the ‘young entrepreneurs’. So while we already have a lot sourced with Macau suppliers, we felt that we needed to give additional suppliers a chance. Since the inception of the program, we have added about 85 new additional suppliers and I think every month we are adding some more. So by the year end, I would expect the number to be over 100 additional suppliers.

MDT – How much does it represent in terms of value?

NR – In terms of [total] value now, it’s almost MOP100 million. Since the inception of the program, to [the end of September], it’s MOP92 million.

MDT – From some of these small companies, I heard some complaints that the Standard Operating Procedures (SOPs) are a bit complicated.

NR – Yes and maybe that’s actually fair to say. Look, we are a highly regulated company. We work in a highly regulated industry, including in Macau. There are many gaming laws, there is third party due diligence that has to be done on the suppliers.

But what we have done in most markets, but especially here in Macau, was [say],
“Look, interfacing with large corporations is always difficult when you are a small company. So what help can we give you?” [JaeHong] Choi and his [procurement & supply] team have done these workshops where his procurement team meets with the suppliers and walks them through step-by-step what it takes to do business with us.

MDT – So in this way, can you help the development of these companies?

NR – That’s right, and grow not only with us, and grow with our competitors, but also grow outside of Macau, where they can maybe start exporting into other markets as well.

MDT – Now to the sustainability side of your job. There are a number of changes in Asia, specifically in terms of law amendments to ban the use of plastic packaging. What is procurement at Sands doing towards the suppliers to comply with this demand?

NR – Let me maybe start a little broader, explain our program and then I can get to the specific questions around plastic and the use of plastic and recycling. Our program is actually an industry leading program by any measure, whether it’s the gaming industry, hospitality industry, hotel industry. Our program is on the CDP, A list ranked. It’s on the Dow Jones Sustainability Index. Sands China Limited, by the way, was ranked 62th in the world on a Newsweek ranking out of the top 500 companies in the world. […]

Here in Macau, we have had a heroic effort over the last couple of years to start our recycling program, to work with the government and the community to enhance that recycling program. We are now up to about 20 percent, which I predict is the highest in Macau. On the building of the Parisian, we had a very comprehensive construction recycling program in place. It had up to 55 percent recycling rate on the construction site.

 

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“We look at [whether there is] a chance to standardize the product and service across all of our properties.”

With plastic – there are always two approaches to everything – [first] you have to reduce the waste. In Macau, I think we are about 15 percent overall in reduction of waste. That means that procurement comes into play again, working with the suppliers to use less plastic packaging to begin with. The second one is, if you have the plastic in your properties, how can you then recycle it? The key is to recycle upstream, starting in the hotel rooms, starting on the casino floor and it’s not easy because at the Venetian, on a really strong Saturday, you have as many as 120,000 – 130,000 people going through and you need to make sure that they throw the right things in the right containers. So it’s a global challenge we face.

We were also able to start with playing card recycling, which took us quite a while to figure out, but we have it figured out how we can do recycling for playing cards as well. So every little bit helps.

MDT – How would you do that?

NR – The problem with playing cards, whether you have paper or plastic, and here we use paper cards, is that they have chemicals in them. First of all [the cards] have to be shredded in order to be securely disposed of and then you need to do a chemical balance to get the chemicals off the paper in order to do the recycling. I don’t know the exact details because we just figured it out…

MDT – Is that specific to Macau?

NR – This is our largest market, so we pioneered it here and now we’re going to bring it back to Singapore and to Las Vegas, but where it started was here and it took the team almost a year to figure out how we can recycle the playing cards.

MDT – You have been continuing a learning process. Like you said, the Parisian is the greenest building.

NR – Yes, you are absolutely correct. There is a learning [process] that goes on to understand what the perfect point is on how to run an operation efficiently, but there are also incredible technology advances year-after-year. The first generation of LED lighting didn’t have the right look, didn’t last as long as you were hoping, but every year it is improving. We have solar panels that we have had in Las Vegas since 2007. Each year the industry is pushing itself and these solar panels are becoming more efficient. Air conditioning, with its variable speed motors is becoming more efficient each year. So the key is that every time that you do an upgrade to the building – right now we started a Venetian room remodel – we go back into the rooms and upgrade them not only from an aesthetics perspective, but just as much to ensure we have really efficient equipment behind the scenes helping us to establish the right guest comfort, but at the same time also reducing the carbon footprint, which also reduces cost.

MDT – So in your perspective, there’s hope for the world.

NR – Yes, I can assure you that there is hope for the world. [Smiles] But it does take everybody to do their part. Right now, we have close to 30,000 team members here in Macau. In sustainability it’s not only about having a policy, but it’s just as important that you touch the team members emotionally and that they need to understand, “Why am I doing this?” When you are a kitchen steward and you have these recycling bins, why is it important to put all the organic waste into this container and not mix it with anything else? They need to see the whole cycle. They need to be taught, they need to be involved. They need to see the benefits and that’s where the Macau team has done an excellent job with having a constant program of, “I will if you will,” where a senior leader challenges their teams to help with office recycling or where you train the housekeepers why it’s important to separate the plastic and the paper, [a practice] that they can also take home into their apartments. We’ve had programs where we offer LED lighting at a discount to our staff so they can actually get the LED bulbs themselves and recognize how their energy bill goes down at home. So yes, there is hope, but it also takes a lot of working with the community in order to get [the policies] established.

Growing with Sands

ne major example of a local SME that went from “small” to “medium” and actually became a global player in the field of gaming furniture and accessories is CMC Trading & Engineering Ltd (formerly Yi Tak Furniture Plaza), which was established in Macau in 1992.

CMC has been a Sands China partner since 2005. They supply gaming related products to all SCL properties, mainly gaming tables, gaming chairs, pit stands, card cabinets and various other casino accessories.

In 2014, they received the Sands Supplier Excellence awards under the SME category and, according to Sands China, “have shared with us how that recognition has influenced their business and also their management concepts.”

CMC started as home and office furniture business and has developed to become one of the biggest gaming furniture suppliers in Macau. A significant proportion of this growth has been attributed to their partnership with Sands. In 2005 their company started with eight managers and 60 staff; currently over 25 people hold management positions and they employ a staff of more than 350.

Moreover, this partnership with Sands has also lead them to develop their client base within Macau to other gaming companies.

CMC have started developing patents on some of their products developed together with Sands, which now helps them to reach international markets in countries such as the U.S., Australia, Philippines, Chile, Singapore, Peru, Russia and also Saipan.

Another example comes from Wa Toc Engineering company specializing in facilities management, including the maintenance and installation of air-conditioning system, mechanical, electrical and plumbing (MEP), and automation systems.

Established in 2010, Wa Toc became a supplier for Sands China in 2011. The company, which has currently a team stationed at the Venetian Macao, started with eight employees and has now grown to be a team of nearly a hundred.

Seventy percent of Wa Toc’s business comes from Sands China, growing from MOP1 million in 2011 to around MOP20 million this year.

The company is also committed to developing local university students. There are 30 local university graduates in the team and over 70 employees are local residents.

Since the start of cooperation with Sands China, Wa Toc has grown in both team size and business scale and has had opportunities to work with the industry giants such as Honeywell and Siemens.

From cars to cards

Norbert Riezler serves as senior vice president and chief procurement & sustainability officer for Las Vegas Sands (LVS).

In this role, he is responsible for overseeing the company’s global procurement and supply chain, leading the corporation’s Sands ECO360 sustainability efforts. According to LVS, Mr Riezler “plays a significant role in each of the company’s developments, from construction to operations.”

Riezler joined LVS in 2007 as vice president of North American procurement, and supported the openings of the Palazzo Resort Casino Hotel in Las Vegas and Sands Bethlehem Casino in Pennsylvania, as well as implementing company-wide procedures that, according to the company, “led to significant reduction in operating costs.”  In 2009, Norbert Riezler was promoted to head of global procurement & supply chain for LVS. In 2010, he took on additional responsibilities by championing the company’s environmental program, Sands ECO360, which has evolved under his leadership into an award-winning and industry- leading sustainability program. In 2012, “global synergies” was added to Riezler’s responsibility, which is “the company’s drive for process efficiency, sharing best practice and procedure standardization.”

Prior to joining LVS, Mr Riezler was with Ford Motor Company for 10 years and spent four years in China as director of Ford’s sourcing office, where he established “the fast-growing China purchasing organization and co-led the company’s Asia Pacific & Africa purchasing regionalization,” according to his official profile.

An Austrian-born American, commanding multiple languages, Riezler worked previously in various hotel and cruise ship management positions after graduating in tourism and hospitality.


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