Business Services

Are procurement savings hiding in your hospitality supply chain?


Take these steps to improve your bottom line.

Negotiating the best deal is a constant challenge for hotels and resorts. Conventional wisdom calls for long-term buying strategies to squeeze out every ounce of value. But significant savings often can be found by examining your existing supply chain, says Dana Caron, UPS marketing manager.

Taking control of your supply chain can cut inbound transportation costs by up to 35 percent, Caron says.

In fact, taking control of your supply chain can cut inbound transportation costs by up to 35 percent, Caron says.

"[Hotel and resort] businesses, regardless of size, are always refurbishing and renovating properties. Spending less on transportation adds up across the board," Caron says. "That can lead to substantial long-term, end-over-end savings."

First: Assess vendor transportation costs
Caron recommends thoroughly evaluating shipping costs. These usually are itemized on invoices from your vendor. If not, you'll need to reach out to vendors to identify them.

"What we often see is that many [in procurement] are unaware of how much they're paying in these costs," Caron says. "Vendors don't always make these costs apparent, nor in many cases do they find the most cost-effective transportation options."

Next: Take control of your inbound costs
"Having a logistics partner that can manage all your transportation needs is important," Caron says. "UPS, for example, will match your delivery deadline needs with the most cost-effective transport options available."

How it works: Instead of the vendor billing you for the costs, the vendor contacts UPS to handle the shipment. Doing so allows you to monitor service choices and leverages your purchasing power.

And to make it easy for vendors, UPS has a customer service team on hand to provide instructions for tasks such as shipment labeling, pickup requests and routing.

Additional benefits
Managing inbound logistics through a single integrated network doesn't just trim procurement costs. "It helps with overall operation, as all functions have supporting logistical needs," says Caron. Refurbishment is one example: "Hotels will need to replace rooms, add upgrades, improve facilities – and these tasks require both materials to get the job started and staffing to get the job finished."

Order visibility through UPS's shipping system lets staff know when a shipment will arrive so you can optimize staffing levels.

An integrated system also can help tackle the unexpected: Truckload and less-than-truckload freight options allow shipments of virtually any size at the speed you need. For example, if your hotel needs a rush order of flat-screen TVs to keep a job on schedule with minimum guest disruption, it pays to work with a global logistics leader.

With access to UPS's global network, it's also easier to take advantage of sourcing opportunities in emerging markets. "With UPS, you can even track the whereabouts of shipments outside of our network, as is sometimes the case in different [global] markets," Caron says. "When you have a need for materials for large tasks, such as the hotel that needs 500 mattresses a year, sometimes the best sourcing opportunities are in less-tapped markets."

By understanding that logistics is at the core of the business, taking charge means more than saving money, says Caron: "It's an important part of your competitive strategy."

For more information on UPS solutions for hotels and resorts, visit UPS's solutions for hospitality.


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