SCM

LOGISTICS AND SUPPLY CHAIN IMPLEMENTATION RECOMMENDATIONS

 IBM’s 2009, Global Chief Supply Chain Officer Study conducted for the metals and mining industry mentions that
82% of companies believe that, the increase supply chain competition is very aggressive n today’s logistics and supply
chain environment.
 For the hotel industry logistics and supply chain activities are grouped into tactical, strategic and operational levels to
help create a more systematic approach by focusing on how implementation will happen from a higher level, that
linking that to long-term goals and finally these results translate in the short-term

TACTICAL LEVEL

Executive support

 The tactical level of implementation of logistics and supply chain management focuses on steps that are taken at a
higher level for successful implementation.
 It is important that, during the tactical stage if implementation there is 100% executive support and buy-in from senior
managers and having right people in place who understand the value logistics and supply chain implementation will
bring to their properties.

Visibility and control

 It is important to have visibility and control to implement logistics and supply chain practices to help make better
decisions.

Benchmarking

 This goal of benchmarking during logistics and supply chain implementation is to enhance design and operational
effectiveness.
 It is important for hotel managers to measure se t targets against results in the different areas of operation like order
filling, transportation, and vendor compliance.

Creative solutions and risk taking

 The goal of developing creative solutions and willingness to take risk during logistics and supply chain implementation
is important since a lot of focus has been placed reducing costs and increasing margins wherever possible.
 This helps focus on negotiating better costs and focus is placed on the customer’s demands.

STRATEGIC LEVEL

Change Management

 The strategic level of implementation of logistics and supply chain management is linked to the long-term benefits over
a period of time.
 Change management plays a big part in logistics and supply chain implementation in different areas, from making
changes to the whole process or fixing issues with vendors.

Think lean and green

 Even though lean started in the automotive industry, it can be used in any business process like in the hotel industry.

Top talent and accountability

 When implementing logistics and supply chain management in any company, it is important to be able to sustain the
implementation, which involves building a solid foundation that includes top managers to drive the process with deep
expertise in logistics and supply chain functions and business skills.
Right information technology

 Today as information has become an important and integral part of every business process, when implementing
logistics and supply chain management in the hotel industry, it is important to have the capabilities of ensuring that
most company decisions are dine at the speed of light.

OPERATIONAL LEVEL

Costs

 The operational level of logistics and supply chain management implementations focuses on decisions that are related
to how to make the tactic approach happen in the short term.

Simplifying complexities

 It is important in logistics and supply chain implementation for hotel managers to manage strategies to eliminate
complexities that do not add any value to the organization.

Right metrics

 Applying key performance indicators (KPI’s) to logistics and supply chain operations during implementation is vital to
help monitor how well suppliers and vendors are meeting set targets, which helps improve top and bottom-line
performance.

Risk management

 Considering risk management is critical during logistics and supply chain implementation for hotel managers in order
to evaluate risk associated with implementation in their strategy.

Retailers power and control n the food supply chain

 The power of the main food retailers could be under-estimated, especially when mapping out the supply chain from a
manufacturer’s standpoint.

All of the main grocery retailers have restricted their own supply chains on a centralized basis, which involves suppliers
delivering direct to have retailer’s own dedicated regional distribution center. From the retailer’s perspective, this produces
important benefits, which include:

 ECR, with improved stock availability

Recent development in the catering sector

 Supply strategies and the development of quasi-vertical integration/vertically integrated networks throughout the food-
service supply chain is less advanced than its retail counterpart.

Efficient foodservice Response – the emergence of multiple players

EFR (efficient foodservice response) is currently being heavily promoted through the

Institute of Grocery Distribution (IGD).

International Foodservice Manufacturing Association (IFMA)

 Equitable alliances
 Supply chain demand forecasting
 Electronic commence
 Logistics optimization
 Foodservice Category Management

Outsourced RDCs or umbrella organizations

Independent Dairy Company (IDC)

Horizontally integrated networks

 Buying groups
 Symbol groups
 Co-ops
 Purchasing/marketing alliances
 Strategic alliances
 Umbrella organizations

THE RETAIL SELECTOR

Buying groups

 Buying groups were formed by independent wholesale opera – tors to improve trading terms with suppliers.
 They offer their members significant price benefits achieved through the power of bulk buying.

Symbol groups

 At one stage, there was a clear distinction between buying groups and symbol groups.
 A symbol group is formed when a wholesale form enters into an arrangement with independent retailers.

Co-ops

 The Co-operative Movement in Rochdale in England in 1844 to protect consumers against unfair trading practices
through sharing profits with customers.

Strategic alliances

 A strategic is a horizontal between retailers who could often be seen as competitors.

And in the food and food services sector/industry, the main theme here us that of partnership, that is, the business relationships
between food and drink manufacturers and other businesses involved in the food supply chain.

These partnerships are between:

 Manufacturers and their raw materials providers