Procurement | MGM Resorts International signs first deal with local SME

Smart Trophy & Souvenir and representatives of MGM Resorts conducted rounds of online conferences and sample mailings in the process of the collaboration

From left: Gary Chung, Lono Lee and Simon Leong

MGM Resorts International confirmed the first procurement deal with local brand Smart Trophy & Souvenir, marking the commencement of MGM’s program to bring more Small Medium Enterprises (SMEs) to the global market.

The business deal, signed in December 2016, was made after rounds of online conferences and sample mailings led by MGM, according to an announcement made by the gaming operator.

“MGM is taking its support of local Macau Small Medium Enterprises global by developing its existing Macau SME relationships with its parent company, MGM Resorts International,” read a press release issued yesterday.

As the gaming operator is set to expand into Cotai this year, it is looking to bring its existing local SME relationships along.

This newly launched initiative assists some of their qualified SMEs to expand their business internationally for global procurement deals, kicking off with MGM Resorts International.

Smart Trophy & Souvenir is currently the first local SME vendor to manufacture 4,500 custom-made Chinese New Year gift sets for MGM Resorts International as keepsakes for the company’s VIP guests.

The local firm competed with three other local SMEs for the deal, following specific contents and drawings that MGM International Resorts provided.
Gary Chung, vice president of supply chain services at MGM Macau, noted that the company has taken part in SME-related initiatives with MGM Resorts in the past. However, this is the first time the company is linking local SMEs to the global market.

“Smart Trophy & Souvenir is the first case in which we directly partnered up to do business with MGM […] This is the first case in which we specifically have our SMEs negotiating with MGM Resorts, the first of many,” he told the Times.

“We went through diligence in looking at a number of suppliers and Smart won on their own merits and has done a successful job in executing the project,” added Chung. He stressed that MGM Cotai is a motivator for the company to continually aid the growth of local SMEs.

With this initiative, MGM Resorts will benefit by acquiring quality products at competitive prices. Chung noted that “When we look to help them [SMEs] grow and expand, there is no expectation that we are going to sacrifice or give away quality delivery, performance and price competitiveness.”

Such initiatives allow local enterprises to obtain a foothold in the international market, as well as the opportunity to gain experience.

Lono Lee from Smart Trophy & Souvenir told the Times that such an initiative has the potential to create further opportunities for businesses to become more competitive, citing future recognition of local brands. “[With] the finishing of the product and the material, the standard is much higher compared to other local costumers we have,” he said.

Lee, part of the team of six behind the enterprise that has been operating for 11 years, expressed his hope for more similar opportunities to be offered in the region.

Meanwhile, Chung shared that MGM Macau has no target number in terms of directing local enterprises to MGM International Resorts. 

Indeed, there are several SMEs and other commodity areas that MGM is starting discussions with. According to Chung, the resort is looking at expanding its partnerships with SMEs into specific areas. 

“Our internal goals are more focused on the strategy and the actions that we will put in place rather than a specific quota […] If we execute our strategies properly, the number will come,” he remarked.

Stacey Taylor, senior vice president and chief procurement officer of MGM Resorts International informed the Times that local SMEs are capable of offering goods that the property could utilize.

“Macau SMEs offer goods that can fulfill that need,” said Taylor. “We also have many FF&E (Furniture & Fixture) needs and there is opportunity based on the quality and craftsmanship that has been shown to us for Macau SMEs to partake in bids for projects,” she added.

According to her, MGM Resorts international has ongoing projects in which the property is looking for innovative suppliers to join their network.

When questioned on the benefits the program could offer to both parties, Taylor stressed that MGM resorts could add to its network suppliers for goods that are not readily available in the United States.

In terms of increasing its supplier diversity, Taylor noted that it would continually work with MGM Macau’s Procurement team to acquire samples from local Macau SMEs for evaluation and bidding.

“We will continue to provide areas of opportunity for our local team to assist in identifying suppliers that will be added to our bidding opportunities.  We are looking for goods that we can continue to purchase for many years and expand upon those areas with the suppliers to create additional opportunities,” explained Taylor.

MGM Resorts International has no specific limitations when it comes to purchasing a wide range of products, as it is focused on increasing its spending on Macau SMEs.

Taylor also noted that the international resort would be willing to provide assistance to local SMEs via MGM China in a bid to acquire the right tools and partners.

The procurement professional hoped that Macau SMEs could learn the procurement process of a multinational organization on a large scale as such exposure and experience should allow SMEs achieve incremental growth opportunities.

Meanwhile, Chung revealed that in the first and second quarters of 2017, MGM Macau has plans to initiate more activities between MGM resorts International and Macau SMEs.

Chung reiterated that in any of the resort’s sourcing initiatives, eco-friendly has always been a criteria for the goods and services that the property procures – whether with SME engagements or not.

Currently, MGM China believes there are a few categories in which Macau SMEs are well suited to reach the global market.

These categories include souvenirs, print and collateral, furniture and textiles.

“Macau has many SMEs that we believe are very suited to sell internationally and we could bring them to MGM,” added Chung.

Chung also reiterated that the resort has recognized its responsibility to support the community in which they operate.

MGM China has held several vendor matching sessions. Hence, the gaming operator is mentoring initiatives and supporting local SMEs by holding seminars in a bid to take their business plans further.

“It makes sense to support the local business community that you deal with,” commented Chung.

Chung cited his belief that local SMEs have tremendously improved in offering products and services to operators in the region; citing quality, responsiveness and service level of local businesses. “There’s been a steady improvement, definitely,” he said.

Further, Grant Bowie, chief executive officer and executive director of MGM China noted that MGM sees a responsibility to support the economic development of SMEs in the international arena.

“We recognize that our parent company with its global procurement deals can do even more to recognize the great potential of Macau’s products. […] This is just the beginning of our long and inspiring journey in bringing more local SMEs overseas,” he concluded.