TIPS FOR AN EFFECTIVE SUPPLY-CHAIN MANAGEMENT FOR YOUR HOTEL

Are you a hotelier looking to strengthen your property? Then, it is a must to review your supply-chain management that is very important for your hotel operations success. Indeed, it is crucial if you want to sustain a competitive advantage. Before setting your supply-chain strategy plan, it is important to take in consideration that it is a complex process especially in the hotel industry. Indeed, there are many stakeholders you need to deal with and the inventory is huge. There is also a significant number of perishable goods and there is important wastage. The supply-chain management also highly depends on seasonality in which the trends and KPIs (Occupancy, ADR, RevPAR) vary. As a hotel marketer looking to maximize your property’s revenue, you must make sure that you have a well-functioning supply-chain management that operates seamlessly.

How to Define Supply-Chain Management in the Hotel Industry

 Supply-chain management in the hotel industry refers to all the activities that involves the flow of goods and services allowing to create guest’s value. Hoteliers strive to make their supply-chain the most efficient through ensuring the process at the cheapest possible cost. It includes the collaboration with suppliers, channel partners, intermediaries who contribute in offering unique experiences to your guests. Applied to marketing, it is all about delivering the right service to the right guest at the lowest cost.

Best Practices for your Hotel Supply-Chain Management

There are several best practices that need to be considered if you want to implement a quality supply-chain management for your property.

Automatized Processes

Technology is crucial for your cost-strategy in today’s world in which data is widely available. Automation has been increasingly present in hotel’s supply chain management. According to the Hospitality Learning organization SOEG, there are many existing information systems that offer tailored solutions for smooth supply-chain processes for the hotel industry.

Those information systems allow to have access to the different department data. Indeed, SEOG mentions the following operation management systems that hotels use: transaction processing system, point of sale system (POS), property management system (POS), decisions support system and global distribution system. Those systems allow you to run real-time reports with booking and different types of historical data that will help you think about ways to minimize wastes at your property. By analyzing the vast amount of data those systems give you access to, you will be able to measure the property and guest’s needs. You can also evaluate your supplier’s turnaround time and decide which partners are the most beneficial for your property. You can engage in automated ordering as well as reliable forecasting. You will then be able to identify the most effective marketing strategies while minimizing your costs.

Supply-Chain Strategy Plan

In order to ensure the success of your supply-chain, it is crucial to build a well-established supply-chain strategy plan. There are several elements to consider when working on your plan to ensure a good-functioning process. Indeed, it is important to analyze the stakeholders that partner with your property and assess their reliability. It is also crucial to often do the inventory of your hotel’s material so you know for instance how many towels, cushions, etc need to be replaced. Through doing consistent inventory, you can also for example assess how quickly you were at selling your mini-bar food and beverages. Always ensure your strategies are improving the inventory turn. You can use the formula mentioned by eFinance Academy to evaluate the speed of your supply-chain which is the following:

Image taken from: https://efinanceacademy.com/inventory-turnover-ratio/

You will also need to rely on the property’s performance forecast in terms of Occupancy, ADR and Revenue Per Available rooms to determine the needed perishable goods. It is also essential to assess the situation of the economy and inflation and identify potential price changes for products used by your hotel. Constructing your plan based on your reflection of those aspects will allow you to achieve a quality supply-chain management while minimizing risks and wastages.

In sum, today’s supply-chain in the hotel industry is all about the guests and unique experiences that can be facilitated through streamlined and dynamic processes. Indeed, your guests must be at the core of your strategies. You must take advantage of the newest intelligence solutions existing in the industry so you can ensure the precision, rapidity and quality of your supply-chain. Applying the best practices will allow you to be an accomplished hotelier driving the highest occupancy and revenues for your property. You should also follow the teachings of the renowned Graduate Professor at Stanford University Business School, Haul L. Lee who mentioned once “The best supply chains aren’t just fast and cost-effective. They are also agile and adaptable, and they ensure that all their companies’ interests stay aligned”.

If you want to learn more about the latest trends in digital marketing in the hotel industry, please visit my previous article in the following link:

https://mery-market.com/distribution-strategy-best-practices-that-will-profit-to-your-property/

You can also connect with me on LinkedIn by visiting my profile:

https://www.linkedin.com/in/meryem-mekouar-m-s-chia-76904b72/