HM 60
Supply Chain
Management
in Hospitality
Industry
Course Descrption:
This course describes the skills, knowledge and performance
outcomes required to understanding the basic concepts on managing
the complete movement of products or services in a supply chain from
the suppliers to the customers. It also emphasizes on identifying the
effects of current and future trends in supply chain management, and on
assessing the processes and performances in a supply chain to
optimize processes into a seamless, innovative and most cost – effective
way to help companies build a competitive edge.
Supply Chain
Management
vs
Logistics
Logistics
Generally refers to operations within one organization’s
territoryand supply chains to networks of organizations that
operates together
Logistics is the overall process of managing how resources are
acquired, stored, and transported to their final destination.
Supply Chain
Management
A network of suppliers, manufacturers, assemblers, supply and
delivery centers, and logistic installations that perform
functions such as material sourcing, processing, shipment to
buyers of those materials of an intermediate or finished
product.
Supply Chain
Management
Supply Chain Management (SCM) is the coordination and integration of
activities involved in the production, sourcing, and distribution of goods
and services. It encompasses the entire process from raw material
procurement to the delivery of the final product to the consumer. SCM
aims to optimize efficiency, reduce costs, and enhance customer
satisfaction while maintaining quality and sustainability.
Supply Chain
Management
In the field of Hospitality Management, supply chain management
plays a critical role in ensuring that hotels, restaurants, and other
establishments operate smoothly. This involves managing the
procurement of food and beverage supplies, linens, cleaning
materials, and other essentials. Effective SCM can lead to cost
savings, consistent product quality, and timely service, which are
vital for guest satisfaction.
Supply Chain
Management
For example: A hotel must maintain a steady flow of fresh
ingredients for its restaurant while avoiding overstocking, which
may lead to waste. Similarly, ensuring reliable suppliers for guest
room amenities contributes to a seamless guest experience.
Emphasizing technology, such as inventory management software,
and fostering strong supplier relationships are key strategies in
modern SCM.
Supply Chain
Is the lined up of companies that market goods
Management or services.
Not only the manufacturers but also the shipping
providers, warehouses, dealers, and consumers
themselves are involved in the supply chain.
Supply Chain Management
vs
1. Logistics focuses on the Logistics
movement and storage of items in
the supply chain, while supply
chain management is more
comprehensive, covering all of the 2. Logistics refers to moving goods and
coordination between partners services from one location to another,
that have a role in this network. including transportation, warehousing,
and distribution. In contrast, supply chain
management encompasses the entire
process of sourcing, manufacturing, and
delivering goods to the end user.
Supply Chain Management
vs
[Link] is the specific domain Logistics
that deals with the movement,
storage, and handling of goods and
materials. In contrast, supply chain
management is the broader field
that oversees the end-to-end
process, from sourcing raw
materials to delivering the final
product to the customer.
Benefits of
Supply Chain
Management
1. Build stronger partnerships and support with clients
2. Provides better distribution processes, with less delay,
for demanded goods and services.
[Link] efficiency and functions for companies.
4. Lowers shipping and warehouse cost.
5. Eliminates cost directly and implicitly
Benefits of
Supply Chain
Management
6. Supports the shipping and the right spot with the right goods
7. Enhances asset management and encourages the effective
implementation of just-in-time inventory models
8. Assists businesses in responding to global dynamics, economic
upheavals , growing market preferences and associated
disparities.
9. Assists businesses in the supply chain to reduce duplication,
eliminate risks, and achieve efficiency.
Functions of Supply
Chain Management
1. Strategic Level
- Strategic optimization involving warehouse, fulfillment Center ,facilities
numbers, locations and scale
- Strategic relationships, contact networks for crucial details, and
technological enhancements such as cross docking, exporting directly ,
or logistics with third parties ( with vendors, dealers, and consumers)
2. Tactical Level
Ø Sourcing and other procurement decisions
Ø Decisions on production including the concept of contracts, schedules
and plans for the operations.
Ø Purchasing choices including inventory size, location and consistency
Ø The strategy of transport including pace, routes, and contracting.
Ø Customer demand and customer habits focus
3. Operational Level
Ø Preparation and forecasting of demand , alignment of all customers’
needs, and prediction- and provision –sharing with all suppliers
Ø In coordination with all vendors, the supply preparation , including existing
inventories and forecast demands
Ø Inbound activities including retailer transport and shipment receipt.
Ø Production processes involving materials use and finished products
streaming
Other Functions of Supply Chain Management
ØManagement of suppliers
ØManagement of Raw Material
ØTransportation Management
ØInformation Management
ØTracking and Monitoring
ØCost Management
ØInventory Management
ØDistribution and Return Management
ØManagement of Supply Chains
ØCustomer Satisfaction
Supply Chain
Management (SCM)
strengthens the
relationship of an
organization with its
suppliers and buyers
by developing better
coordination.
Factors Affecting
Supply Chain in
Hospitality Industry
Ø Seasonal and Demand Variability
-The hospitality industry frequently experiences
seasonal fluctuations in demand.
Factors Affecting
Supply Chain in
Hospitality Industry
Ø Perishable Goods
-Restaurants and hotels need to handle
perishable goods such as fresh produce, dairy,
and seafood, which have limited shelf lives.
Factors Affecting
Supply Chain in
Hospitality Industry
Ø Supplier Reliability
-Relying on a tiny number of suppliers for
various goods and services, such as linens,
toiletries, or food products, can be a vulnerability.
-If a supplier fails to deliver, it can disrupt daily
operations. Maintaining relationships with multiple
suppliers or having backup suppliers can help
mitigate this risk.
Factors Affecting
Supply Chain in
Hospitality Industry
Ø Cost Management
Managing costs effectively while
maintaining quality and competitive
pricing is an ongoing challenge.