Logistics and Supply Chain Management in the hotel sector

As I have in my Bachelor degree a background in Hospitality and I have been working in the hotel sector for many years, the topics logistics and Supply Chain Management (SCM) seem to be quite interesting for me. Therefore in the following entry I would like to share with my colleagues the importance of logistics and SCM in hotels.

The competition in the hotel industry and several other sectors is growing more and more and it is a challenge to differentiate from the others. To conquer this challenge, logistics and SCM have got an important role nowadays.

Impact of logistics and SCM in hotels

A well-established effective, process- and customer orientated logistic and SCM in a hotel cause a sustainable competitive advantage. The use of right logistics and supply chain strategies improve the quality and service of a hotel and reduce costs. Furthermore it will help to be leading player in the industry.

SCM in Hilton Hotels

I would like to present you now a great example of a hotel chain that uses logistics and SCM in a quite efficient way. The Supply Management of Hilton provides properties some of the most comprehensive and value-based supply management solutions in the hospitality industry. The purchasing is enforced by consolidation the supply of requirement by more than 4,000 Hilton Worldwide and third-party properties.  “Ten years ago, we were behind the curve compared to other hospitality companies. Now, we are close to cutting-edge,” says Don Miller, regional director of supply management for Hilton.

The worldwide hotel chain has implemented logistics and supply chain strategies in the company´s operations to reduce costs. Their procurement works through its Beverly Hills office and six regional affiliate locations. The procurement department combines buying into national contracts for its numerous brands. The hotel chain deals directly with suppliers, in reason they negotiate with the distributors that handle warehousing and delivery.  “It’s important to control the whole supply chain,” Miller says.

All in all it can be said, that logistics and SCM bring several benefits to a hotel and influence their success significantly. In the paper of the University of Nevada, Las Vegas from 2012, they are described as follows:

  • The logistics and SCM activity can save hotels costs between 8% and 15% that can be used for other business processes
  • It can reduce errors due to the use of electronic devices with applications which improve the speed of the orders through data exchanged with other members of the supply chain
  • It supports to manage inventory costs with just-in-time strategies

With the mentioned benefits a hotel company can become the player in the market. In the following YouTube-link there is presented a really interesting roundtable of executives from the hospitality sector who discuss the evaluation and efficiency of SCM.

https://www.youtube.com/watch?v=b0opaY3JRLc

Hilton hotels

 

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