SUPPLIER STRATEGY

At the half way point in the calendar year, now is a good time to review your Procurement activities and Supplier Strategy in order for you to maintain momentum when it comes to improving the performance of your hospitality business.

A well balanced Supplier Strategy based on the following tenets will help deliver greater commercial value and ESG (Evironmental, Social and Governance) related benefits and make a difference.

It is wise to create an extended enterprise approach with your key strategic suppliers to develop a really transparent, open and honest relationship based on shared values and goals, a commitment to innovation in efficiencies and ultimately a win-win for both parties. This allows the opportunity to measure each others performance and feedback accordingly. Lots of hitherto unidentified benefits will accrue from this type of relationship with your suppliers.

Try to focus on quality in products and services which reflect your brand values to ensure positive standardisation and consistency. Ensure all suppliers are properly accredited and vetted for not only financial viability but also their position on environmental and sustainability matters including commitments to eradicate modern day slavery from all supply chains.

Maintaining service levels with suppliers is also important. This will help your business exceed customer expectations. This means having guaranteed response times for equipment maintenance suppliers which are adhered to every time and having dependability on delivery service levels. It also means being ahead of the curve on innovative new products to give your business an additional competitive edge.

Ensuring value for money on your supplier spend is probably an obvious aspect of any Supplier Strategy but it should also incorporate consideration of affordability to best fit needs, elimination of waste, should-cost analysis and tendering programme to maximise value.

You could also look to improve lifecycle economies and reduce repair cost by trading off first cost and operating cost and in addition seek better warranties and extensions of maintenance intervals.

Measuring performance in collaboration with your supply chain helps to secure shorter lead times, faster processing times, reduced inventory stock days and devote more time to planning and risk minimisation.

Why not review your supplier base and ensure it is optimal for your company’s requirements with the aim of consolidating to maximise economies of scale and make it more manageable overall. And always ensure you have a back up for mission critical items but make sure there is not too much overlap with multiple suppliers in the same categories.

Get under the bonnet on the latest developments on Environmental, Social and Governance matters and screen your supply chain to find ways to work together with your mission critical suppliers and make a difference in relation to minimising carbon footprints and assist the global priorities in reaching net zero. Reduce the number of deliveries to your properties and look at all the ways this can be achieved by buying an increased range of items from fewer suppliers and being more accurate in forecasting requirements.

Technology can be used to streamline your processes and give you greater control of expenditure and enjoy the benefits of greater productivity which can be used to further enhance your profitability.

It is incredibly important to be on the front foot with ESG efforts but equally important is the focus on value and not simply cost when developing your Supplier Strategy. However, plans have to be rooted in reality and affordability is also a key driver especially in the current economy.

Lots to consider and for guidance on improving your Supplier Strategy contact alastair@aroprocurement.com www. aroprocurement.com