Nothing showcases the unpredictability of the supply chain like the events of the past decade. Hotels, resorts, and leisure businesses have been hit hard by a variety of challenges. Staffing, supply costs, and shipping disruptions have all taken a toll on operational efficiency and profitability. It’s now essential to know how to build a resilient supply chain. In the hospitality industry, this knowledge can help transform the procurement function from a liability to a strategic advantage.
Creating a procurement strategy that can withstand ups and downs provides consistency to your properties. You can more easily maintain your budget by navigating pricing changes and avoiding upcharges. You can ensure guests enjoy the same exceptional experience by avoiding stockouts. Plus, you can maintain your property by centralizing facility service needs. With the right sourcing tools, your operations run smoothly regardless of what is happening externally.
Understanding Your Risk Areas
Before you determine which changes to make to your supply chain, it’s important to identify your vulnerabilities. These may not be the areas you think. In fact, you may have the strongest supplier relationship in a category and still be at risk.
Supplier mapping is the first step. Make sure your procurement team understands:
- Which suppliers you rely on for which products
- Where your key products are manufactured
- Where your raw materials are sourced from
- Which distributors your suppliers work with
- Which transportation methods are used for shipping
By assessing not only your tier 1 partners, but also your tier 2 and tier 3 suppliers, you get a more complete picture of where your products come from and how they reach your locations.
Creating Back-Up Plans
Using this supplier mapping knowledge, your team is equipped to create contingency plans for incidents when weather, geopolitical, or economic factors impact the supply chain. These plans might include understanding your suppliers’ full product and service offerings in case you need to make switches. It also might include building relationships with local and regional suppliers to make sure you’re covered in case of international issues.
Beyond identifying alternate sources, your backup plan should include:
- Pre-approved substitute products: Define acceptable alternates for key items so properties can pivot quickly without sacrificing brand standards or guest satisfaction.
- Tiered supplier lists: Maintain at least one secondary or tertiary supplier in high-risk categories (such as linens, paper goods, or perishables).
- Contract flexibility: Build dynamic terms into supplier agreements to allow for temporary sourcing changes or pricing adjustments when disruptions occur.
- Inventory strategy: Increase safety stock or reorder points on critical SKUs during high-risk periods or seasonal demand spikes.
- Crisis communication plan: Establish a chain of communication with suppliers, how often updates are shared, and which internal teams need to be notified when disruptions occur.
Proactive contingency planning keeps your team ready for the unexpected.
Foster Communication Within Partnerships
Partnerships are built on communication. Regular communication with your procurement partner puts you in the position to succeed in good times but also effectively pivot when disruptions occur.
It can be helpful to speak with your procurement partners about the needs of your business in both the short term and long term, starting with the next nine-to-12 months. You can cover:
- How will seasonality impact guest profile or volume?
- How will seasonality affect product availability or quality?
- What spec alternatives are you open to when primary options are unavailable?
Long-term focused conversations can cover future business expansions, menu changes, or budgetary goals. This information enables your partner to better support your business needs.
When you know where your products come from, maintain strong supplier relationships, and have contingency plans in place, you add security to your operations. This confidence in your supply chain allows your teams to focus on creating exceptional guest experiences.
Sponsored by Foodbuy Hospitality.