For hotels and hospitality, there are big challenges in managing suppliers in complex supply chains to keep customers and staff safe
Hotels should feel like a home from home for customers, and a safe place to work for staff. Whether it's traditional hotels, or serviced apartment blocks, there are some big players in the hotel and hospitality sector. But for such companies, there can be challenges delivering comfort and safety when they have large numbers of suppliers. Often operating in multiple locations and across different jurisdictions, these companies have many multiples of suppliers relative to similar-sized businesses in other sectors. Canopy is on hand to help manage these complex supply chains. In the latest of our occasional series of sector-focused blogs, we take a closer look at solving three problems of supplier management in the hotels and hospitality sector.
Complexity in the hotels and hospitality sector
It goes without saying that the hotel and hospitality sector is big business globally. And it also goes without saying that the industry operates at various scales, from single-room bed & breakfasts through to multinational hotel chains. Notwithstanding the hit that the sector took during the Covid-19 pandemic, it's estimated that there are over 700,000 hotels and resorts worldwide. Factoring in other serviced accommodation, that equates to many millions of hotel rooms, suites, and serviced apartments worldwide. And accordingly, global revenues in the sector run into many billions; among the biggest players is Marriott, with a pre-Covid revenue peak of $21 billion (£17.4 billion) in 2019.
In many ways, the challenges in managing suppliers for major hotel chains and hospitality companies are similar to those faced by facilities management companies. The health and safety of contractors and the safeguarding of end-customers both need careful management and risk mitigation. However, when it comes to safeguarding, hotels don't necessarily have a good picture of potential vulnerabilities for their end-customers (hotel guests or renters). To maintain client confidentiality and safety, procurement teams must vet all suppliers via robust due diligence processes.
3 major challenges, one supplier management platform
For hotels and hospitality, Canopy can provide the ideal mechanism for managing these complex supply chains. We focus here on how it helps with three major challenges in the sector:
1. Managing large number of suppliers relative to size of turnover
You'll need to ensure access to suppliers that are local to each individual hotel. Take plumbers: you need a roster of suppliers of plumbing services who are close to each building in your hotel chain. For each category, that multiplies the number of suppliers which your procurement team needs to manage. And as we know from some clients, in many cases companies attempt to manage these complex supply chains through Excel. When you have 15-20,000 suppliers across multiple (possibly multinational) locations, this makes for huge, unwieldy spreadsheets that certainly don't make the job easy. With Canopy, search and selection of local reliable suppliers becomes a much easier task.
2. Managing the health and safety of suppliers coming on site
When contractors are on site, you have various responsibilities towards them. You need to protect your business from possible breaches of regulation on health & safety, data protection, modern slavery, and other key risk areas. Ensuring all of them have the correct liability insurance and business permits in place will mitigate your risks and make for better relationships. With Canopy, it's up to your suppliers to provide the information as it becomes due. With automated reminders to supply information on renewals, gone are the days of complex scheduling to chase suppliers for their information.
3. Managing safety and safeguarding of customers when suppliers are on site
Hotel and hospitality companies need a way of carrying out due diligence on all contractors. Safeguarding customers and ensuring their personal safety in each and every room in your portfolio requires an attention to detail. With Canopy, the onus is on suppliers to prove that they have undertaken all appropriate checks on their staff. If they’re non-compliant, the platform can red flag them and prevent procurement teams from generating purchase orders. Once you're satisfied that they've completed all the checks you need, you'll be back to business.
To find out more about how hotel and hospitality companies can deploy Canopy, our award-winning supplier management platform, contact one of the team today.
Post by Nick Verkroost
Nick is an experienced business leader and the CEO for Canopy (OCG Software), the rules-based Supplier Management platform. Nick's focus is on commercial and operational excellence and ensuring our clients maximise the opportunities that Canopy offers.