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Hospitality Industry
Hotel companies, both big and small, must focus on how to offer
products and services while keeping costs low. In an industry which is labor
intensive many hotels are forced to make bolder and more visible moves in
costs reduction to their operations. It comes as no surprise that much of
these costs cutting efforts have been focused on payroll and other
employee associated costs, like hiring freezes, cuts in employee perks,
reduction of bonuses, and reductions in salaries.
One area of the hotel industry that is usually left out in cost cutting
efforts is its logistics and supply chain operations. Even though logistics
and supply chain is considered an operations management strategy in the
hotel and other service industries, they can use these strategies to help
add value to their properties. The supply chain is an important element
within the hotel and catering industry.
A well-established logistics and supply chain management system
can help the hotel industry give individual hotel companies a sustainable
competitive advantage. The use of the right logistics and supply chain
strategies helps not to only improve the quality and service of the hotel
company, but drive down costs. For staff in this industry, it is crucial to build
steady relationships with suppliers and work with a good ordering system in
order to improve the service level towards customers.
The hotel industry can benefit from the comprehensive and integrated
practices of logistics and supply chain management, by delivering a
consistently reliable and high quality service at the best costs.
Guest or Customers are the utmost important for the hotel industry;
customer satisfaction is of paramount importance to the hotel
industry. In the hospitality industry the customer related activities
such as food and beverage production and service, housekeeping,
Front office management are given utmost importance. The back
office operations such as the accounts, purchases, supplies chain
management, revenue recording etc. take a back seat.
Different types of management systems, such as the ownership
hotels, franchisees, hotels which are run on operating contracts by
chains etc. The different managements systems have different
implications on the supply chain management.
In the hotel industry all the efforts are customer oriented as a result
lot of cost reduction which can be attained through improved
upstream functions of supply chain management is lost. Current
trends in the industry show that computerized property management
systems are used but mainly for front office management and
reservation systems.
Conclusion:
Reference: https://www.sbsandco.com/blog/significance-of-supply-chain-
management-in-hospitality-industry
ARTICLES IN RELATION TO SUPPLY CHAIN MANAGEMENT…
1. Hospitality Logistics: Supply Chains Made to Order
By Lisa Terry
Welcome to hospitality logistics, where five-star supply chain management
helps keep customers happy.
2.
Hospitality Supplier Reserves Room to Grow With WMS
By Mary Shacklett
SMOOTH IMPLEMENTATION
American Hotel Register was also concerned about integrating the new
system into its warehouse operations. The pre-planning and
process/system mapping that the company had performed with IBS
Dynaman helped considerably in this area, as the joint project team was
able to determine where specific changes needed to be made in either
software or business process.
"We knew going into the project that we were going to experience pain
points with a system change, and where those pain points were likely to
be," says Baker. "We did experience these pains over the first two or three
weeks of implementation, usually because of an errant setting or a piece of
code that needed to be changed, but the good part about the process was
that everyone was on-site to address issues as they arose. We had a
command center staffed with both our own and the vendors' leads on the
project. The system was cutover to production in July 2015 and by the first
or second week of August 2015, it was working well."
Just as critical was training employees on the system and getting them
comfortable.
"We started preparing employees for the new system early on," says
Baker. "We walked them through the system, and started training 30 days
before system cutover."
The management team was trained in the first week. In the three weeks
that followed, training was held for warehouse employees. All sessions
were conducted on the actual system, which had been set up in a test lab
environment. In addition to this system, employees also had to learn how to
use the new Lucas hands-free headsets that would replace their RFID
phones. These devices tell them which location to go to in the warehouse.
Employees then read off a code and confirm the location and that the pick
was done.
TRANSFORMING THE WAREHOUSE
"We learned that in preparing employees for a new system, management
was often the most challenging to work with," Baker says. "This group knew
the old system well. They had a fear of losing control and their value as
employees, because they had acquired expertise in the old system. But
once we helped them overcome these challenges, they proved to be
incredible partners in getting the new system implemented."
Baker says the team's other hesitation was system integration. "There were
many pieces of systems and business processes that were involved, and
you can conduct quality assurance checks on these items only to a certain
extent. We knew we would just have to flip the switch," Baker says.
What made the task easier was a failover plan that could recover the
company's old system within 15 minutes. "Fortunately, we didn't have to go
into failover," says Baker. "The new system came up easily, and the
process was seamless for our customers."
Now with a new system that can handle the needs of an expanding
business, Baker sees immediate benefits in the warehouse.
"Our old system was manually intensive," he says. "It could take two hours
to sort and process. Now we have system automation that can prioritize
and orchestrate many tasks. This frees managers so they can get out on
the floor more and collaborate with people from other company areas. In
the course of implementing this system, we were also able to reduce our
head count on the inbound materials side by one full-time employee, and
then reassign that person to the outbound side."
The IBS solution "delivered everything we had hoped for in a WMS and
more," says Baker. For other companies considering a similar system
implementation, he offers several recommendations.
"It's important to have patience, because a total system and workflow
transformation can't be done overnight," he says. "As you are making
changes, a sound change management practice should be in place that
takes into account not only system and process changes, but their impact
on people who are already accustomed to a set of work practices. Finally,
consider every possible way to improve your company's operations, and
don't always conclude that the system must be modified; a change on the
work process side might be warranted."
2. Cruise Control
By Sandra Beckwith
"This is a unique industry where a hotel moves from pier to pier at a certain
hour," Pankowski says. "The process is precise, organized, and well-
planned so we don't miss the departure."
"This isn't like delivering to Walmart," agrees Jonathan Bales, director of
global operations and product development at Miami-based Hellmann
Worldwide Logistics, a Royal Caribbean partner. "If we don't make a
delivery to Walmart by 5 p.m., Walmart will still be there the next day. But if
we don't get the containers to the cruise ship by 3 p.m., that ship is gone."
On-time supply deliveries are crucial to the success of the cruise industry
because the provisions are an essential part of the customer experience.
Whether it's food and beverage products, hospitality supplies such as
towels, or technical and marine products used to keep the ship working,
they all contribute to a satisfactory passenger experience.
By Karen Kroll
From technology investments that stretch budgets to supply chain
partnerships that share proprietary information, these moves may give
small businesses pause. Here's why they should dive right in.
At Chocolate Pizza Company, a gourmet chocolate gift company, quality
Swiss-style chocolate is the "linchpin in our supply chain," says Ryan
Novak, owner of the Marcellus, New York-based company. "Any disruption
in this commodity could seriously jeopardize our small business."
When Novak purchased the business in 2010, he bought chocolate as
needed because finances were tight and sales modest. That meant he
typically paid premium prices for both chocolate and delivery.
Sales quintupled in three years. A sweet shift, but the practice of buying
chocolate just in time limited response times for large orders and cut into
margins.
Still, the economy remained sluggish and continued growth wasn't
guaranteed. Novak had to decide whether he and his team could grow
sales fast enough to cover the investment needed to procure larger
quantities of chocolate. Similarly, could he negotiate cost reductions
significant enough to allow Chocolate Pizza Company to become more
competitive and pitch to higher-volume customers?
Novak decided they could. "We went from buying about 20,000 pounds of
chocolate annually to more than 100,000 pounds," he says. The next step:
upgrading equipment so they could efficiently use the larger inventory. And
after that, "we had to go sell," Novak says.
Sell, they did. "In a short window, we went from small-town chocolate shop
to emerging brand with national sales," he says. As costs dropped,
Chocolate Pizza was able to capture business from major companies,
including CVS, BJ's Wholesale Club, and HMS Host. The decision to
procure a larger volume of chocolate set in motion additional investments
that accelerated production capacity and fueled greater growth. "But the
key was gambling on stabilizing our chocolate supply chain," Novak says.
When thoughtfully evaluated and executed, supply chain moves that
contain some risk can propel small shippers to greater growth and success.
Here are a few risks to consider taking.
1. GO GLOBAL
Of the nearly 295,000 companies that exported from the United States in
2015, 97.6% were small to mid-sized businesses (SMBs), according to the
Small Business Administration. These SMBs accounted for nearly one-third
of the $1.3 trillion in exports that year.
Exporting not only opens a small business to additional markets, but it can
boost their sustainability by diversifying revenue.
The thought of exporting may appear daunting, especially to an SMB that
lacks the resources to dedicate multiple employees to international
operations. Several steps can help.
One is setting aside time to assess the market: Where will your product fit?
Who are potential competitors?
Another step is estimating the impact on the supply chain and operations.
For instance, does it make sense to find suppliers within the market to
which you're exporting? What duties and taxes will apply?
Knowledgeable partners can provide shippers with assistance and advice
on exporting. This might be a third-party logistics (3PL) provider, a
university professor, and/or an agency such as the U.S. Commercial
Service, which is the trade promotion arm of the U.S. Department of
Commerce's International Trade Administration.
2. INVEST IN AGILITY
Investments that boost an SMB's agility and allow it to quickly respond to
customers can pay off. "Agility is where SMBs can differentiate," says Peter
Bolstorff, executive vice president of the Association for Supply Chain
Management, a trade group.
Consider Artaic, a Boston company that designs and fabricates custom
tilework, creating mosaics from glass, porcelain, and stone. The best tile
materials come from various locations worldwide; little is produced in the
United States. Artaic's supply chain extends to about one dozen suppliers
on three continents.
At the same time, shorter lead times help Artaic win business. However,
every project is custom, eliminating inherent predictability in the company's
tile consumption. "Since our supply chain is global, inbound shipments can
easily take three months including production times and sea freight
transport," says Ted Acworth, Ph.D., founder and CEO of Artaic. Given the
tiles' weight, air freight tends to be cost prohibitive.
To achieve four- to eight-week lead times, Artaic worked with the University
of Massachusetts, Amherst, for four years to develop a predictive
inventory-ordering scheme. To help cover the cost, Artaic applied for and
received a National Science Foundation Research grant, which helped
support a Ph.D. student and faculty advisor.
With its new system, Artaic can order tile regularly, and before it sells its
mosaics. Once a mosaic sells, Artaic likely will have all or most of the
needed tile feedstock in house. "We've vastly increased our tile availability
percentage, utilizing low cost and environmentally more favorable ocean
shipping instead of air shipping," Acworth says.
Playing It Safe
While making moves that contain some risk can pay off, preparation and
research are key. "Take time to ask questions, connect with trusted
industry peers, and conduct your own research to reduce potential
business risks," says Darren Cockrel, president of UPS Global Logistics
and Distribution.
As part of the analysis, weigh total lifecycle costs against the estimated
impact to revenue. Identify potential issues that could arise, and how the
decision is expected to help the business execute on its strategic business
goals. If the investment will require a heightened sales effort or a change to
operations, how can the organization achieve that?
SMBs can also mitigate risk by using tools that provide additional control.
For example, digital systems enable businesses and their customers to
track and manage shipments in real time, so they can respond quickly to
deviations from plan.
Finally, it's rarely necessary to tackle an entire project at once, says Peter
Bolstorff, executive vice president of the Association for Supply Chain
Management. It's often just as effective and more prudent for SMBs to
break a project into smaller components, complete one or two, assess,
tweak where necessary, and then move to the next phase.
"Think big, start small, and scale fast," he says.
5.
Global Supply Chains in a Post-Pandemic World
Companies need to make their networks more resilient. Here’s how.
by
Willy C. Shih
Summary.
The U.S.-China trade war and the supply and demand shocks brought on
by the Covid-19 crisis are forcing manufacturers everywhere to reassess
their supply chains. For the foreseeable future, they will face pressure to
increase domestic production, grow employment in their home countries,
reduce their dependence on risky sources, and rethink strategies of lean
inventories and just-in-time replenishment, which can be crippling when
material shortages arise.
This article provides advice to make your supply chain more resilient
without sacrificing competitiveness. Start by mapping the full extent of your
supply network to identify both direct and indirect sources. Determine how
quickly those that are most vital for you could either recover from a
disruption or be replaced by an alternative. Address the vulnerabilities by
diversifying your suppliers or stockpiling essential materials. Explore
production-process improvements or new technologies—such as
automation, continuous-flow manufacturing, and 3D printing—that could
lower your costs or increase your flexibility when faced with a shock. And
revisit your product strategies: Offering consumers more choices isn’t
always better.
The challenge for companies will be to make their supply chains more
resilient without weakening their competitiveness. To meet that challenge,
managers should first understand their vulnerabilities and then consider a
number of steps—some of which they should have taken long before the
pandemic struck.
Uncover and Address the Hidden Risks
The challenge for companies will be to make their supply chains more
resilient without weakening their competitiveness. To meet that challenge,
managers should first understand their vulnerabilities and then consider a
number of steps—some of which they should have taken long before the
pandemic struck.
Christoph Morlinghaus
Understanding where the risks lie so that your company can protect itself
may require a lot of digging. It entails going far beyond the first and second
tiers and mapping your full supply chain, including distribution facilities and
transportation hubs. This is time-consuming and expensive, which explains
why most major firms have focused their attention only on strategic direct
suppliers that account for large amounts of their expenditures. But a surprise
disruption that brings your business to a halt can be much more costly than
a deep look into your supply chain is.
As firms relocate parts of their supply chain, some might ask their
suppliers to move with them, or they might bring some production back in-
house. Either course—transplanting a production line or setting up a new
one—is an opportunity to make major process improvements. This is
because as part of the change, you can unfreeze your organizational
routines and revisit design assumptions underpinning the original process.
(One challenge for companies with existing production lines is that when
those assets are fully depreciated, executives may be tempted to retain
them rather than invest in newer, more competitive plants and equipment:
Since the depreciation expense is no longer factored into the calculated cost
of production, the marginal cost of boosting production at a plant with idle
capacity is lower.)
CONCLUSION
The U.S.-China trade war and the supply and demand shocks
brought on by the Covid-19 crisis are forcing manufacturers everywhere to
reassess their supply chains. For the foreseeable future, they will face
pressure to increase domestic production, grow employment in their home
countries, reduce their dependence on risky sources, and rethink strategies
of lean inventories and just-in-time replenishment, which can be crippling
when material shortages arise.
This article provides advice to make your supply chain more resilient
without sacrificing competitiveness. Start by mapping the full extent of your
supply network to identify both direct and indirect sources. Determine how
quickly those that are most vital for you could either recover from a
disruption or be replaced by an alternative. Address the vulnerabilities by
diversifying your suppliers or stockpiling essential materials. Explore
production-process improvements or new technologies—such as
automation, continuous-flow manufacturing, and 3D printing—that could
lower your costs or increase your flexibility when faced with a shock. And
revisit your product strategies: Offering consumers more choices isn’t
always better.
The challenge for companies will be to make their supply chains more
resilient without weakening their competitiveness. To meet that challenge,
managers should first understand their vulnerabilities and then consider a
number of steps—some of which they should have taken long before the
pandemic struck.
Understanding where the risks lie so that your company can protect
itself may require a lot of digging. It entails going far beyond the first and
second tiers and mapping your full supply chain, including distribution
facilities and transportation hubs. This is time-consuming and expensive,
which explains why most major firms have focused their attention only on
strategic direct suppliers that account for large amounts of their
expenditures. But a surprise disruption that brings your business to a halt
can be much more costly than a deep look into your supply chain is.
Further Reading
“Bringing Manufacturing Back to the U.S. Is Easier Said Than Done” Willy C.
Shih HBR.org, April 15, 2020 “It’s Up to Manufacturers to Keep Their
Suppliers Afloat” Tom Linton and Bindiya Vakil HBR.org, April 14, ...
CONCLUSION
Few brands are as synonymous with hospitality as Hilton. Its legacy in the
industry extends back for nearly a century. Among the many important
pieces of its legacy is Hilton Supply Management (HSM), an organization
that leverages the purchasing power of the Hilton portfolio along with
external hospitality brands to serve as an end-to-end global supply chain
solutions provider.
“As a global procurement organization, we are focused on developing
and executing on programs and policies that serve the interests of
properties and guests,” said Bill Kornegay, senior vice president of supply
management. “HSM is wholly owned by Hilton; we provide goods and
services for Hilton along with properties owned by independent owners,
real estate investment trusts (REITs) and management companies. We
want to be the premier provider of hospitality goods and services wherever
we operate.”
Just as Hilton has served the world’s travelers and set a gold standard
for hotels around the globe, HSM has created a gold standard for providing
the global hospitality industry with unique purchasing solutions and an
operational mindset born from a rich heritage in hospitality. Service and
focused industry expertise are at the core of its business, which sets the
organization apart from purchasing generalists.
The size of HSM’s customer base is staggering. Currently in the Hilton
portfolio are 4,800-plus properties across 13 brands in more than 100
countries. The brands include Hilton Hotels and Resorts, Waldorf Astoria,
Conrad, DoubleTree by Hilton, Embassy Suites, Hampton, Hilton Garden
Inn, Homewood Suites, Home2 Suites, Tru by Hilton, Canopy, Curio – A
Collection by Hilton and Hilton Grand Vacations. Additionally, Hilton has
more than 1,700 properties in the pipeline. Altogether, HSM supports
supply chain management for 6,000-plus properties across 65 brands (13
Hilton along with 52 non-Hilton brands).
“Success is predicated on the model we use to aggregate spend,”
Kornegay says. “The more goods and service we procure, the better
leverage we have with manufacturers to procure items at a low cost that we
can pass on to our customers.”
Today, HSM seeks to discover efficiencies in all aspects of the global
supply chain, from manufacturing through delivery, negotiating and
securing value-based pricing with suppliers and service providers that meet
or exceed operational standards. Its proven pricing programs, extensive
procurement technologies and deep expertise in hospitality allow HSM to
be a strategic partner now and in the future for its clients.
At a high level, the key challenges for HSM are centered on customer
satisfaction while working to drive profitability and sustain costs. These are
the most pressing issues facing the organization’s supply chain, logistics
and strategic sourcing operations. The financial management aspect is
further challenged by market volatility and recovery cycles, which impact
manufacturing and distribution activities in particular.
Business requirements are key to HSM’s sourcing activities, particularly
with the expanding footprint of new hotel construction, ensuring brand
standards compliance and meeting aggressive construction schedules.
This coupled with the sourcing activities for established properties drives
the need for spend analysis to fully document what products are purchased
along with the quantities of those products. These are essential for the
development and management of a successful strategy.
“HSM customizes our service based on the customer needs,” Kornegay
says. “From reporting, analytics, ordering options and targeted goods and
services, we consistently grow our supply chain and enhance the customer
experience, allowing the properties to focus on their guests.”
Building strong supplier and vendor ties is critical for HSM. It has
dedicated team members who manage each account relationship. “We
strive to stay relevant and work with our suppliers to ensure we are getting
the best products for the best price, and we allow them to participate in our
discussions around what products we offer,” Kornegay says.
About 10 percent of the vendors that HSM works with are considered
strategic suppliers. These include companies such as LG and the Coca-
Cola Company. With that tier of supplier, HSM has multi-year deals in place
and works with the suppliers across the entire spectrum of its hospitality
portfolio.
“The strategic suppliers represent nearly three quarters of our annual
spend,” Kornegay says. “We have commodity partners that are more
localized, short-term contracts. We have several partners in each category
that allow us to fulfill different needs.”
Strategic Approach
Indeed, HSM’s services and solutions are extensive. They span the
spectrum of strategic sourcing, operations support, project supply
management and business solutions.
In the strategic sourcing realm, HSM has developed and negotiated
global and regional pricing agreements with hundreds of suppliers of
hospitality products and services. This helps to secure and offer their
properties value-based pricing, superior products and the highest-quality
service standards through strategic sourcing solutions with reputable and
responsible supplier partnerships. HSM leverages the volume of its entire
portfolio to secure best-in-class pricing on all products and services,
creating extraordinary value for the properties it serves.
HSM’s food and beverage strategic sourcing team works closely with
national and regional food and beverage manufacturers to provide
customers with an extensive offering of consumable products, supplies and
equipment. HSM provides superior pricing with a variety of manufacturer
programs for the food and beverage products required to successfully run a
property.
Consumable programs include meat, poultry, seafood, grocery and
dry goods, solid and frozen dairy, bakery, produce, and alcoholic and non-
alcoholic beverages. HSM also offers equipment and supplies including
china, glassware, flatware, kitchen equipment, banquet equipment, large
and small appliances, and other smallwares.
Its food and beverage sourcing experts also provide an array of
value-added services, including a comprehensive food safety management
program backed by an industry leader in sanitation. This customizable
program gives HSM’s clients the tools to maintain the highest standards of
cleanliness for the safety and health of guests, including employee food
safety training and regular audits to help identify and rectify any potential
risks in safety practices.
HSM’s project management service can also help with turnkey kitchen
projects. These services include design planning, identifying and specifying
equipment, procurement, logistics and installation. Leveraging its strategic
relationships with food and beverage equipment manufacturers and
installers allows HSM to provide competitive prices on the products needed
to complete kitchen construction, renovation or replenishment.
Beyond food and beverage, HSM’s strategic sourcing capabilities extend
into guest rooms and public spaces, property operations, energy
management, and sustainability and responsible sourcing. If clients are
looking for items for guest rooms or furniture for their lobbies, HSM’s
programs can handle all requirements, including products for ongoing
operations and renovations.
HSM supports operating supplies and equipment needs through
uniforms, linens and terry, and amenities and pet programs. Its furniture,
fixtures and equipment (FF&E) offerings include case goods, upholstery,
flooring, window treatments and indoor/outdoor furniture.
Additionally, HSM’s property operations strategic sourcing team offers an
extensive range of negotiated products and services to keep all the
operating areas of a property running smoothly. Its supplier agreements
include maintenance repair and operations (MRO), service agreements and
print and promotional items. MRO equipment and supplies include tools
and hardware, electronics, RFID door locks, safes, plumbing and paint,
signage, vehicles and vehicle wraps.
HSM also provides service agreements in areas such as pest
elimination, water treatment, TV content, gateway and security, elevator
maintenance, public space cleaning, temporary labor and third shift,
scenting and clean air, roofing, public space music and on-hold messaging,
and waste management. It can assist with print and promotional items such
as key cards, logo food and beverage disposables, logo apparel, in-room
collateral, on-property marketing materials, business cards, stationary and
more.
In the energy management arena, HSM manages the purchasing of
electricity and natural gas in regulated and deregulated markets, in addition
to providing renewable energy and related utilities programs for its
properties. In support of Hilton’s commitment to corporate responsibility,
HSM offers programs for efficiently reducing the cost and carbon footprint
associated with the consumption of required utilities, and it can manage
supplier relations for purchasing energy-related hotel services and
products. Its energy procurement services include electricity, natural gas,
steam, alternative renewable energy, utility bill pay, and energy audits and
management services. Energy products include HVAC, PTAC, thermostats,
lighting controls, electrical supplies, electric vehicle charging and building
automation systems.
Then there is sustainability and responsible sourcing. HSM is committed
to driving a global sustainable procurement strategy that takes into account
the environmental, social and economic impacts and benefits to its
properties. Through its strategic partnerships and sustainability initiatives,
HSM develops and implements programs that enable properties to divert
waste from landfills and reduce water and energy usage.
HSM manages a complex supply chain and engages with business
partners who are committed to delivering products and services
responsibly. Its responsible sourcing policy outlines the fundamental
principles, environmental, social and economic, that are expected of all
suppliers, regardless of their region. HSM’s sustainability and recycling
programs include mattress and TV recycling, universal waste recycling,
synthetic turf landscaping and food digesters.
Supporting Operations
HSM’s operations support team has extensive experience in managing all
areas of hotel purchasing. This experienced leadership combined with a
regional presence in the field ensures that HSM can leverage opportunities
to supply solutions by providing unparalleled service and procurement
expertise to client operations.
Customer service is a critical part of this effort. Because HSM comes
from the world of hospitality, it understands that unparalleled customer
service and support are critical to help customers deliver service
excellence. Its team of supply management professionals will ensure that
client needs will be handled with the utmost attention and care from start to
finish.
HSM has a regional operations support model which aligns dedicated
individuals to the properties in their regions, providing consistent,
personalized service accentuated with market-specific knowledge. Located
in major markets worldwide, HSM’s professional and knowledgeable
operations support teams are the first line of service for questions,
consultations or issue resolution. Thanks to their practical hotel experience,
HSM’s field operations teams add value with meaningful insights and
advice to increase efficiencies.
Beyond that are HSM’s regional commodity programs, which are groups
of specialized supplier programs that have been negotiated for commodity
suppliers in each metropolitan area. Using a best-in-class approach where
the market volume can sustain multiple suppliers, pricing is negotiated by
supplier category. This gives clients a degree of flexibility in purchasing the
freshest quality products with consistency in product and price from the
strongest suppliers in their market or region.
HSM’s regional distribution programs are another important element, as
they leverage the purchase volume of properties within or across regions
and/or categories to reduce base product costs for participating properties.
By driving economies of scale, HSM is able to negotiate powerful savings
with distribution partners covering an expanded geographic scope.
The organization’s distribution programs produce improved productivity
and cost reductions, while providing the flexibility to customize solutions for
individual markets and properties. If needed, HSM can further leverage the
effectiveness of its regional distribution program relationships with a
strategic category management program, working closely with the
distributors on tactical SKU rationalization and manufacturer consolidation
to achieve even greater category savings impact.
Project Oversight
Project supply management is one more area where HSM delivers
unparalleled service to hotel owners and developers. Its hospitality focused
teams will help clients to complete new hotel builds or existing hotel
renovations on time and within budget. HSM manage all aspects of the
purchasing process for every aspect of new builds or renovations.
HSM’s project development team works with renowned designers and
owners to refine and execute their exclusive packages, providing estimates
for renovations or new build projects. This customized service provides
owners and developers the necessary tools and information needed to get
a project underway including budget scope of work, critical path timelines,
financing and leasing options.
Its project supply management team can manage the entire FF&E
purchasing process for every area of a property including guest rooms and
corridors, lobbies, restaurants, lounges, meeting rooms, pool and patio
areas, laundries, administrative offices, business centers, fitness centers,
back-of-house, administrative areas and interior signage. HSM’s project
supply management and logistics team also helps to ensure that projects
are completed on budget, on time and to a client’s total satisfaction. The
team works closely with general managers, owners and developers
throughout the entire project process to help ensure success.
HSM also offers guest room design packages for the newest brand, Tru
by Hilton, and it is presently developing brand-specific and endorsed
packages for multiple other flags within the Hilton Worldwide portfolio.
HSM’s guest room packages allow the organization to deliver
customization, functionality and value for clients along with all-inclusive
décor schemes for the comfort of their guests. It works closely with
reputable manufacturers to ensure that the products and specifications are
custom-tailored to a brand’s specific standards, and its brand-approved
guest room packages have been extensively tested in real hotel
environments to ensure their functionality and durability.
“We work very closely with our business partners in all of our brands,
and as they develop new concepts they work with us and our supply
partners to determine the products they need and build them into the
concept,” Kornegay says. “Within each category, we can look at what
format works best and how it differentiates the brands while working within
a framework that our suppliers can accommodate.”
Extensive Solutions
Another benefit of working with HSM is its eProcurement system, which
simplifies the purchasing process. HSM deploys business-to-business
applications across its portfolio of brands and ordering disciplines,
providing properties with significant increases in system functionality and
access to scalable solutions for each property’s requirements. HSM’s
eProcurement catalogs contain products representing its many negotiated
spend classifications. These include food and beverage, FF&E, services,
printing, uniforms, maintenance repair, operating supplies and equipment.
System users at the executive and property levels can benefit from the
convenience of integrated declining checkbook features and electronic
approvals processes. HSM can customize the eProcurement system to
meet the unique needs of each property and provide various service and
support levels to ensure efficient adoption of the system. By delivering
technologically advanced support and resources, HSM helps clients have
easy access to current information about their purchasing operations.
“When we look at the trends impacting our business, it is all about big
data and the desire for more information while providing it in user friendly
formats for customers,” Kornegay says. “We must be able to provide them
with as much information as we can when they need it and how they need
it. That is why providing them with a portal through a customer facing
website is important, as it can help them to understand spend at company,
property and category levels. It will also help us to communicate regularly
with them about updates, upgrades and changes and allow them to see
their spend data and analyze that information.”
In the coming years, HSM will continue to serve its clients, those within
Hilton and beyond. Hilton is in the midst of spinning off its real estate and
timeshare businesses into standalone companies, and the Hilton family will
become: Hilton, Park Hotels & Resorts and Hilton Grand Vacations.
“Our business model will work the same way after the spinoff,”
Kornegay says.
“We will provide goods and services for their properties as a third-
party provider. There will be a need for us to make sure our contracts are
more robust and put them in place with the new entities, but what we do
and how we do it won’t change.”
Within the hospitality procurement sector, there has been
consolidation in many categories, and that consolidation is driving
competition. HSM will continue to provide the best-in-class service by
focusing its efforts within its development group, actively engaging external
parties so it can get its goods and services to market.
Industry 4.0 has been given a renewed sense of urgency following the
pandemic. Industry 4.0 refers to the massive changes we see across every
industry as a result of new technologies, such as smart sensors, predictive
analytics, and artificial intelligence (AI). By extension, we see a
technological shake-up with supply chain 4.0 and cash management 4.0.
A COORDINATED EFFORT
Supply chain 4.0 has to go hand in hand with order-to-cash 4.0. For
example, the digital supply chain is more efficient because it uses
predictive analytics to anticipate customer demand.
1
December 02, 2020 | By Andrew Bruce
While we usually reserve 1990's nostalgia for fashion, film, and music, a glimpse back at the
technology landscape is just as jarring. Many remember a time before the internet was a
necessity, but what about the pre-SCM age?
For today's large manufacturers, distributors, and retailers, supply chain management
(SCM) has become such an indispensable area of business management that it's difficult to
imagine a time before it. Yet decades before mobility and the Internet of Things, there were
no "supply chain directors"—only warehouse, transportation, and manufacturing managers,
each group siloed from the others in intent and operation.
Even if a forward-thinking executive realized the need for a holistic strategy, few systems
could support that goal. The visibility we now take for granted was once crudely cobbled
together from faxes, spreadsheets, and phone calls.
The move away from "point-to-point" thinking happened around 1996, when companies
began building teams that pooled collective knowledge and expertise around everything
affecting the supply chain. These newly aligned groups drove major improvements in
planning and connectivity, particularly among suppliers, customers, and nascent ERP
systems.
Twenty years later, supply chain managers and executives have clearly defined
responsibilities that span the flow of goods, the various systems that support it, and the
human capital that keeps it all running—far beyond the brick-and-mortar mindset of the
1990s.
OMNI-CHANNEL A NECESSITY
In 2016, the SCM community stands at the precipice of another important shift. The digital
transformation of the supply chain that industry analysts were buzzing about is here, with
omni-channel capabilities emerging as a necessity for all competitive supply chains.
More customers than ever order from smartphones and expect a choice of delivery options,
while enjoying the best prices and unprecedented speed and customization. If a competitor
has a more convenient avenue for a customer, you'll suffer in the marketplace. Who would
have thought that mobile apps such as Uber and Lyft would be able to so rapidly disrupt a
service delivery system that was so taken for granted?
This incredibly competitive landscape is the reason supply chain executives must shift focus
from thought leadership and being a best-in-class company to survival. In 2016, retailers are
thriving or dying by their supply chain strategies.
Walmart remains the world's largest retailer due to its supercenters, hundreds of thousands
of SKUs, and valuable information it makes available to suppliers, including Sony, Unilever,
and Procter & Gamble. This flow of information allows every company in the network to
adapt quickly to the market.
Connectivity to your entire network is no longer an option; it's a necessity. If they haven't
already, supply chain executives need to immediately deploy more flexible and agile supply
chain management solutions that encompass ERP.
One way to achieve this flexibility is to utilize a cloud-based supply chain network. This
approach enables trading partners to collaborate around "one version of the truth" in real
time. It also allows you to not only rapidly expand or contract services according to your
market, it also lets your team focus on new business instead of maintenance.
Let's be honest: How much time do you have before all the top suppliers and customers are
connected in a way you should be?
Supply chain and logistics requires innovative, logical thinkers to be recruited in order to
compete with rapid technology advancements and global expansion.
Finding the right candidate for your business is a challenge that requires broad advertising,
rigorous interviews, and ultimately some give and take from both sides. Not only does the
individual need to be aligned with company expectations, but your workplace must also
appeal to the potential applicant.
To keep one step ahead of your competitors, keep in mind these five hacks for outstanding
recruiting.
When drafting your job listing it’s a good idea to break down the role into skills and
attributes needed in order to succeed. Being able to translate these qualities into what is
necessary, preferable, or a deal breaker will keep all applications as relevant as possible.
Highlighting work-life balance during the recruiting process will increase morale and could
be the difference between an application to your company or a competitor down the road. It
is also a great way to significantly reduce turnover rates and recruiting costs in the long
term. Flexibility is a huge plus that should be highlighted in your listing.
LinkedIn is a great resource, as a professional networking site that allows you to extend your
reach to a motivated, like-minded community of supply chain and logistics professionals.
Facebook and Twitter are other great platforms to take advantage of, with millions of
diverse users available at the touch of a button. The most well-rounded approach would be
to use all three to carefully target your applicants.
Employees can inform friends and family of the job opportunity, as well as post links from
their private media accounts to let others know of the listing. Even if the right candidate
isn’t among their friends or followers, chances are more than one will share the listing,
pushing the message further beyond the original network of connections.
RECRUIT INTERNALLY
Recruiting from within the business is a great way to give existing employees the
opportunity to apply for the job. It promotes succession planning and good career
development within your business—both of which will appeal to the passionate, driven
worker.
Promotions to higher-level positions and management roles will help to upskill individuals
and reward the positive performance of employees. It is important that this process is
undertaken in a way that is fair and consistent for everyone.
Ultimately, great recruiting requires good research and understanding. Often the right
candidate will not be actively seeking a position or may be employed currently. An
exemplary job listing will be widespread, highly specific, establish the great reputation of the
business, and pose a unique opportunity for any supply chain professional willing to take
the plunge.
Reference:
Online.
1. https://store.hbr.org/product/mcdonald-s-and-the-hotel-
industry/902A21?fromSkuRelated=216012-PDF-
ENG&ab=store_idp_relatedpanel_-
_mcdonald_s_and_the_hotel_industry_902a21
2. https://www.researchgate.net/publication/346161070_The_Hospitality
_Industry_in_the_Face_of_the_COVID-
19_Pandemic_Current_Topics_and_Research_Methods
3. http://www.scw-mag.com/sections/food-beverage-hospitality/793-
hilton-supply-management