There is no doubt that supply chain management is a critical function in any industry. But when it comes to the hotel industry, it is absolutely essential. Hoteliers must ensure that they have a well-organized and efficient supply chain if they want to be successful.
Repeat customers and good reviews are essential for any hotel, but they can only be achieved if the guests are happy with their stay -- and that happiness is much easier to earn through hospitality 3PL services.
In this blog post, we will discuss the significance of supply chain management in the hotel industry and explore some of the key components of hospitality logistics.
Common Problems with Logistics in the Hotel Industry
- Hiring & Retaining Staff: Hotels are always searching for talented and qualified individuals to join their teams. The hospitality industry is very competitive, so it can be difficult to find and retain the best employees. Beyond that, here are some common problems the hotel industry faces when it comes to logistics.
- Traditional Marketing Methods Change: The way marketing works is ever-changing, and the hotel industry needs to find ways to stay ahead of the curve. Traditional methods are no longer as effective as they used to be, so hotels need to get creative with their marketing strategies.
- Customer Expectations Are Higher than Ever: Guests have more choices than ever before, so they are often very picky about where they stay. They expect a certain level of service and amenities, and they are not afraid to speak up if they feel like their expectations were not met.
- Operational Challenges: There are a lot of moving parts in the hotel industry, which can make things very challenging to manage. From the front desk to housekeeping to maintenance, everything needs to run smoothly in order for the guests to have a positive experience. Having proper outbound transportation logistics frees time up for management to meet these needs.
- Increasing Costs: The costs of running a hotel are always increasing, whether it’s the price of utilities or the cost of supplies. It can be difficult to keep up with the increasing costs while still providing a high level of service. This is where the need for inbound logistics in the hotel industry comes from.
Benefits of Successful Supply Chain Management for the Hotel Industry
With the challenges that the hotel industry faces, it’s more important than ever to have a successful supply chain management solutions strategy in place. Here are some of the benefits.
- Improved Customer Service: When the supply chain is running smoothly, it leads to improved customer service. Guests will be happy with their stay and more likely to come back and recommend the hotel to others.
- Reduced Costs: Proper supply chain management can help reduce costs for the hotel. When inbound and outbound logistics in the hospitality industry are handled efficiently, it can save the hotel a lot of money.
- Improved Employee Morale: When employees are happy with their jobs, they are more likely to stick around. This leads to reduced turnover and improved morale throughout the hotel.
Key Factors for Successful Hospitality Logistics Management
To have a successful hospitality logistics management system, there are several key factors that need to be in place.
Strategize Your Supply Chain Management
You need to have a clear plan for your supply chain management. This includes having the right supplier relationships, efficient transportation, and proper warehousing. When everything is in the right place, it will lead to a more efficient and cost-effective operation.
To accomplish this, it is important to first consider the types of products that need to be delivered. For example, perishables will require a different delivery schedule than non-perishable items. Second, the frequency of deliveries should be taken into account. A hotel that receives daily deliveries will have different needs than one that receives weekly deliveries.
Finally, it is important to consider the geographical location of the business. A hotel in a remote location will have different logistics needs than one in a major city. By taking all of these factors into account, businesses can create a supply chain management strategy that meets their specific needs.
Be More Creative with Solutions
As the hospitality industry changes, so do logistics. To stay ahead of the curve, it is important to be creative with solutions. This might include using technology to automate hospitality inventory processes or working with local suppliers to get better rates. Whatever the solution, it is important to be open to change and willing to try new things.
You can’t just go with the flow if you want to be a successful hotel logistics manager. Think outside the box. Be resourceful. Come up with innovative ideas that will streamline processes and improve efficiency. It’s not enough to just follow the status quo – you have to constantly strive to find new and better ways of doing things. If you can do that, then you’ll be well on your way to becoming a successful hospitality logistics manager.
Stretch Your Planning
Anyone in the hospitality industry knows that things can get pretty hectic. There are a lot of moving parts and pieces, and if even one thing goes wrong, it can throw off the whole operation. That’s why planning is so important for hotel logistics management.
But it’s not enough to just have a plan — you also need to be able to adapt and change your plan on the fly, depending on the situation. This can be a challenge, but it’s essential for ensuring that your business runs smoothly. By learning to stretch your planning, you’ll be able to manage even the most complex hospitality logistics with ease. Some examples of how to stretch your planning include:
- Being flexible with your delivery times;
- Offering a range of delivery options;
- Working with a variety of suppliers;
- Using technology to your advantage.
By being flexible and adaptable, you’ll be able to manage any type of situation that is thrown your way.
Choose the Transportation Company Wisely
The transportation company that you choose can make or break your logistics in hospitality management. That’s why it’s so important to do your research and choose a company that is reliable and has a good track record. In addition, the company should be able to meet your specific needs.
For example, if you need to transport perishables, you’ll want to consider hospitality logistics companies that specialize in that type of transportation. By taking the time to find the right transportation company, you’ll be able to avoid a lot of headaches down the road.
Invest in the Modern Technology & Software
To boost your supply chain processes, it's essential that you choose the right technology to ensure your supply chain has a steady, reliable flow. Using technology for a well-managed supply chain, you can help better plan everything from optimal routes to creating invoices to amplify every step of your supply chain activities.
When it comes to the best technology to boost your supply chain, the best programs include Excel, enterprise resource planning systems, route planning software, and other integrations.
To this day, different supply chains commonly use manual processes and systems to complete supply chain operations. While this may work for your logistics and supply chain, it's not ideal for operational effectiveness. Instead, it's important to automate at least some of your processes to avoid making unwanted errors with operating costs.
Automatize the Logistics and Supply Chain Management
Wherever you can, automizing supply chains can make a world of difference.
Particularly beneficial to those highly complex supply chain processes, automation in the hotel industry can help provide tailor-made solutions that streamline your supply chains.
As businesses across industries look to reduce costs, automizing supply chains is crucial operations move. Particularly for hotels, this process can help avoid challenges and give your company a competitive advantage using logistics and supply chain management.
Forecast the Demand
While hotels cannot predict the future, they can improve their demand forecasting by keeping abreast of the latest trends. Suppose particular room styles, menu items, or drinks are popular in any given season. In that case, you can have a better idea of what to tell suppliers to improve your industry and maintain stock in case of a rush, ensuring customer satisfaction is upheld.
In addition, demand forecasting can help prevent unwanted overstocking issues, particularly for perishable or seasonal items. Avoiding this large inventory of unused products will help reduce costs. And what makes it all the better is, demand forecasting is done using predictive analysis, a process that companies can rely on supply chain management software for.
Work on Risk Management
There are several risks at play when navigating the supply chain. For instance, in the hotel industry, taking too long to pay a supplier makes it challenging to receive orders on time. However, automating order-to-pay is an easy way to simplify logistics and boost efficiency.
That being said, there are risks with compliance issues. From port disruptions to trade disputes, some factors can impact logistics processes, and ultimately, relationships with customers. For this reason, it's essential to stay up-to-date on regulatory changes that energy to avoid impacts on your company.
That being said, there are risks with compliance issues. From port disruptions to trade disputes, there are a number of factors that can impact logistics processes, and ultimately, relationships with customers. For this reason, it's essential to stay up-to-date on regulatory changes that energy to avoid impacts on your company.
Improve the Inventory Velocity
To boost profitability and save costs, improving inventory turns is essential. This is done with higher inventory velocity, especially when considering the hotel space, where supplies span everything from bedding to linen, pillows, mini bar items, cutlery, and more.
To better understand, inventory turns are calculated as 'Cost of Goods sold' divided by 'Average Inventory on hand.' To simplify, inventory velocity is the period from the purchase order to the sale of the finished product. However, with various suppliers, this is a particularly challenging area for hotels and makes careful tracking important.
Work on Visibility & Document Management
By aligning your supply chain, you can gain higher visibility and centralized document management. With end-to-end visibility, businesses are better able to account for every aspect of their logistics, with real-time data that gives an idea of the entire supply chain, from the hotel to customers.
Particularly for managing purchase orders, it's important that hotels have a centralized hub. By creating a one-stop shop to review supply chain activities, hotels can reduce errors and boost responsiveness for better outcomes.
Diversify Your Suppliers'
To avoid purchasing issues when a supplier runs out of supplies, It's important to diversify your team of suppliers to ensure all your products and materials are available.
Managers at a hotel company can work with more than one supplier to purchase essential items in bulk or turn to that supplier in the case of another one having a shortage. By having a backup plan, hotel industries can ensure their facilities run smoothly.
The hospitality industry is constantly changing, which means that the logistics must also change. In order to be a successful hospitality logistics manager, you need to be creative, resourceful, and adaptable.
You also need to have a well-thought-out plan that can be easily adapted to changing circumstances. And finally, you need to choose your transportation company wisely. By following these tips, you’ll be well on your way to becoming a successful hospitality logistics manager.
At Cowtown Express, we understand the challenges that the hotel industry goes through. We are a reliable and adaptable hospitality logistics company that can meet your specific needs.