OUR LADY OF FATIMA UNIVERSITY

COLLEGE OF HOSPITALITY AND INSTITUTIONAL MANAGEMENT

SUPPLY CHAIN
MANAGEMENT
ACADEMIC YEAR- 24 - 25
WEEK 2

VERITAS ET MESERICORDIA
Objectives: • Understand SCM's definition and importance in the
hospitality industry.
• Identify the key components and flow of a supply chain.
• Explore the various objectives of SCM (customer
satisfaction, efficiency, resilience, sustainability,
collaboration).
• Analyze the benefits of SCM in hospitality (cost reduction,
quality control, customer satisfaction, streamlined
operations).
• Recognize the role of SCM in managing resources, costs,
quality, customer satisfaction, delivery, inventory, risks,
sustainability, technology, and supplier relationships.
• Evaluate the potential limitations and challenges of
implementing SCM in the hospitality industry.
Source: https://www.neptune-project.eu/About-Neptune/Objectives
• Define SCM and explain its importance in
hospitality.
• Identify key components of a supply chain.
• Explain the objectives of SCM in hospitality.
• Describe the benefits of implementing SCM in
hospitality.
• Analyze the role of SCM in managing resources,
costs, quality, customer satisfaction, and
operations.
• Identify challenges of implementing SCM in
hospitality.
• Apply SCM concepts to solve real-world problems
in hospitality.
 Introduction to
Supply Chain Management
In the hospitality industry, supply chain management
is crucial for success. It involves managing the flow of
goods, information, and finances across the entire
network, from suppliers to customers. By optimizing
this process, hospitality businesses can improve
efficiency, reduce costs, enhance quality, and
ultimately, create a better experience for their guests.
1. How do you think the fresh ingredients in your favorite
restaurant dish make their way from the farm to your plate?
2. How do you think the linens and toiletries in your hotel room
are sourced, delivered, and maintained to ensure a comfortable
stay?
3. How do you think the technology used in a hotel, like the check-
in system or room controls, is developed and integrated into the
guest experience?
Supply Chain Defined
• A supply chain is a system involving
organizations, people, technology, and
processes that move products from
suppliers to customers.

• It includes a network of retailers,

distributors, transporters, storage
facilities, and suppliers, managing the
flow of goods, information, and funds
from raw materials to the final product
delivered to the customer.

• It connects a business with its suppliers

and customers.
Sourcehttps://www.freepik.com/free-vector/diagram-showing-supply-chain-
management_24093730.htm#query=supply%20chain%20management&position=4&fro
m_view=keyword&track=ais_hybrid&uuid=53a471c1-6629-449a-8711-01aa09bf6339/
Supply Chain Defined…
The supply chain, which is
also referred to as the
logistics network, consists
of suppliers,
manufacturing
centers,warehouses,
distribution centres, and
retail outlets, as well as
raw materials, work-in-
process inventory, and
finished products that
flow between the
facilities.
Source: https://einvestingforbeginners.com/supply-chain-network-optimization-ansh/
Supply Chain
Management Defined
Supply chain management (SCM) manages
the flow of materials, information, and
finances from suppliers to consumers,
coordinating this flow within and between
companies. It includes:
Planning and managing: Sourcing, procurement, conversion,
and logistics.
Coordination: With suppliers, customers, and other partners.
Integration: Connecting business functions like logistics, manufacturing, marketing,
and finance .
Source: https://www.shipbob.com/blog/supply-chain-management/

\
 Goals of Supply Chain Management
1. Customer Satisfaction:
Achieve high customer satisfaction by meeting
demand, ensuring product quality, and
maintaining reliable delivery. Effective
forecasting and supplier management are
crucial.
 Goals of Supply Chain Management
2. Efficiency:
Enhance network efficiency by streamlining
processes and reducing costs through data
analysis and real-time inventory management,
leading to better profitability.
 Goals of Supply Chain Management
3. Reselience:
Build a resilient supply chain capable of
managing disruptions through risk
management, forecasting, and contingency
planning to maintain performance and
customer satisfaction.
 Goals of Supply Chain Management
4. Sustainability:
Focus on environmental impact by
implementing sustainable practices and ethical
sourcing, meeting customer and regulatory
demands for reduced carbon emissions.
 Goals of Supply Chain Management
5. Collaboration:
Foster strong relationships and communication
with suppliers and stakeholders, utilizing
technology to improve visibility and ease
negotiations.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

01 Enhancing Customer Service

Improve satisfaction by ensuring timely

and accurate deliveries.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

02 Expanding Sales Revenue

Increase revenue through efficient

supply chain operations and better
customer service.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

03 Reducing Inventory Cost

Reduce expenses related to storing and

managing inventory.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

04 Improving On-Time Delivery

Ensure products are delivered to

customers as scheduled.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

05 Reducing Order to Delivery Cycle Time

Shorten the time from order placement

to delivery.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

06 Reducing Lead Time

Reduce the time required to produce

and supply goods.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

07 Reducing Transportation Cost

Decrease expenses associated with

moving goods.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

08 Reducing Warehouse Cost

Lower the costs of storing and managing

inventory in warehouses.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

09 Reducing Supplier Cost

Simplify the supply chain by working

with fewer, more reliable suppliers.
Objectives of
Supply Chain Management
Supply chain management must be efficient and cost-
effective across the entire system, focusing on
minimizing transportation, distribution, and inventory
costs through a holistic, systems-based approach.

10 Expanding Depth of Distribution

Increase the range and reach of

distribution channels.
 Advantages of Supply Chain Management
in the Hospitality Industry
In the hospitality industry, supply chain management
(SCM) helps reduce risks, manage demand, and meet
customer expectations. It enhances product quality,
minimizes waste, and improves operational efficiency. By
monitoring the supply chain effectively, businesses can
address issues early, leading to long-term savings and
reduced costs.

Source: https://aims.education/advantages-and-benefits-of-supply-chain-management/
 Benefits of Supply Chain Management in
the Hospitality Industry
1. Enhanced Efficiency:
Implementing supply chain management, including
integrated logistics and innovative practices, enables
businesses to better anticipate and respond to market
demands. This dynamic adaptability is crucial for
navigating economic fluctuations, emerging trends,
and shorter product lifecycles.

Source: https://aims.education/advantages-and-benefits-of-supply-chain-management/
Benefits of Supply Chain Management in
the Hospitality Industry…
2. Cost Reduction:
SCM helps reduce costs in several areas:
• Enhances inventory management.
• Optimizes storage to prevent damage.
• Improves responsiveness to customer needs.
• Strengthens relationships with distributors
and vendors.

Source: https://aims.education/advantages-and-benefits-of-supply-chain-management/
 Benefits of Supply Chain Management in
the Hospitality Industry…
3. Increased Output:
In the hospitality industry, combining lean and agile
practices with strategic planning enhances supply
chain efficiency and sustainability. Lean practices
reduce waste and optimize processes, while agile
practices enable quick adaptation to changes in
demand or supply disruptions, improving operational
resilience and sustainability.

Source: https://aims.education/advantages-and-benefits-of-supply-chain-management/
 Benefits of Supply Chain Management in
the Hospitality Industry…
4. Higher Profit Margins:
Adopting advanced technologies and enhancing
cross-departmental collaboration in hospitality
businesses can reduce costs and boost revenue.
Technologies like inventory management systems and
automated ordering help minimize waste and
optimize stock, while improved collaboration ensures
effective resource use, leading to better profit
margins.
Source: https://aims.education/advantages-and-benefits-of-supply-chain-management/
Benefits of Supply Chain Management in
the Hospitality Industry…
5. Improved Collaboration:
Effective supply chain management in hospitality
ensures smooth interaction among vendors,
distributors, and service providers. This coordination
helps maintain high service standards and consistent
guest experiences, such as through a centralized
procurement system that provides uniform quality
supplies across a hotel chain.
Source: https://aims.education/advantages-and-benefits-of-supply-chain-management/
 Benefits of Supply Chain Management in
the Hospitality Industry…
6. Minimized Delays:
Efficient supply chain practices in hospitality prevent
delivery delays and logistical errors, ensuring timely
service. This includes prompt cleaning and stocking of
hotel rooms and uninterrupted food and beverage
service in restaurants.

Source: https://aims.education/advantages-and-benefits-of-supply-chain-management/
Benefits of Supply Chain Management in
the Hospitality Industry…
7. Strengthened Supply Chain Network:
Integrating lean and agile practices with strategic
planning enhances supply chain efficiency and
sustainability in hospitality. Lean practices reduce
waste and optimize resources, while agile practices
enable quick adaptation to demand changes and
disruptions, improving operational resilience.

Source: https://aims.education/advantages-and-benefits-of-supply-chain-management/
 Role of Supply Chain Management in
Hospitality Industry
Supply Chain Management (SCM) plays a crucial role in the
hospitality industry, impacting various aspects of operations
and customer satisfaction.
Here's an overview of its key roles and benefits:
01
SCM helps in managing the flow of resources—
from raw materials and ingredients to finished
Efficient products—ensuring that hotels, restaurants, and
Resource other hospitality services have the necessary
Management supplies when they need them. This minimizes
waste, reduces costs, and maintains high service
standards.
 Role of Supply Chain Management in
Hospitality Industry…
02

Cost By optimizing procurement processes,

Reduction negotiating better terms with suppliers, and
reducing inventory costs, SCM can significantly
cut operational expenses. Effective SCM
strategies help in managing costs related to
procurement, storage, and distribution.
 Role of Supply Chain Management in
Hospitality Industry
03

Improved Effective supply chain practices ensure that

Quality high-quality products and services are
Control consistently delivered. This involves selecting
reliable suppliers, monitoring product quality,
and maintaining stringent standards
throughout the supply chain, which is vital for
maintaining customer satisfaction in the
hospitality industry.
 Role of Supply Chain Management in
Hospitality Industry…
04

Enhanced A well-managed supply chain ensures that

Customer customer demands are met promptly and
Satisfaction accurately. By having the right products
available at the right time, hospitality
businesses can provide better service, meet
customer expectations, and enhance their
overall experience.
 Role of Supply Chain Management in
Hospitality Industry…
05

Timely SCM ensures that goods and services are

Delivery delivered on time, which is critical for hospitality
operations that depend on timely inventory
replenishment. Delays in supply can lead to
service disruptions, which can negatively impact
guest experiences.
 Role of Supply Chain Management in
Hospitality Industry…
06

Inventory Effective SCM practices help in maintaining

Management optimal inventory levels, reducing the risk of
overstocking or stockouts. This is particularly
important in the hospitality industry where the
timely availability of products can directly affect
service quality and operational efficiency.
 Role of Supply Chain Management in
Hospitality Industry…
07

Risk SCM includes assessing and mitigating risks

Management related to supply chain disruptions. By
developing contingency plans, diversifying
suppliers, and ensuring robust logistics,
hospitality businesses can better handle
unforeseen events such as natural disasters or
supply shortages.
 Role of Supply Chain Management in
Hospitality Industry…
08

SCM in the hospitality industry can

Sustainability contribute to sustainability goals by
incorporating eco-friendly practices, such as
reducing waste, sourcing local and
sustainable products, and improving energy
efficiency in logistics and operations.
 Role of Supply Chain Management in
Hospitality Industry…
09

Modern SCM utilizes technology such as

Technology
inventory management systems, real-time
Integration
tracking, and data analytics to enhance
efficiency and decision-making. This
technological integration allows for better
forecasting, planning, and coordination
across the supply chain.
 Role of Supply Chain Management in
Hospitality Industry…
10

Building strong relationships with suppliers is

Suppllier a key component of SCM. Effective
Relationships
communication and collaboration with
suppliers can lead to better terms, improved
service levels, and innovations that benefit
both parties.
Q&A
 OUR LADY OF FATIMA UNIVERSITY
COLLEGE OF HOSPITALITY AND INSTITUTIONAL MANAGEMENT

END OF THE
LESSON
ACADEMIC YEAR- 24 - 25
WEEK 2

VERITAS ET MESERICORDIA