Implications Of Supply Chain Strategy On Hotel Industry Suppliers - Essay.

Referring to an industry of your choice, evaluate the implications for the way in which buying organisations will interact with their suppliers.  Issues that could be addressed in the analysis could include:

• Supply chain strategy
• E-Commerce and Information Systems
• Outsourcing
• Supply chain relationships
• Supply chain improvement

All published information relative to the chosen industry that has been used in the preparation of the assignment should be included as an appendix.

It is expected that you will use the internet facilities for the following:

• Visit sites of various companies in your chosen industry to evaluate the level of sophistication in the use of electronic commerce.
• Information on the companies which forms the focus of your assignment.
• Literature from electronic databases to provide research evidence to support your expressed views.

It is expected that the assignment will not exceed 4000 words. This is a group assessment with groups expected to be a minimum of three and a maximum of four in size. Please include a reflective section (2 pages) from each student.

The assignment should include at least 10-15 references to the literature in your chosen area.  Any references cited must be included in a bibliography at the end of the assignment.

To be submitted in hardcopy to academic office by 4pm on the Friday of week 12.

Provisional assignment marks and written feedback should be available two weeks after the hand in date.

Supply Chain Strategy in the Hotel Industry

The aim of this report is to provide a view on supply chain strategy of the hotel industry. Supply chain refers to the system of entities, activities, persons, information and other resources that are involved in transporting products from the retailers to customers. The supply chain strategy refers to the combination of functions as well as activities throughout the business value chain for fulfilling the value proposal of the business to the consumers in the marketplace (Barney 2012). Therefore, it indicates as an iterative procedure that assesses the cost-benefit trade-off of the business operational components.

The supply chain strategy of the organization within a particular industry is mainly shaped by the interrelation among the four elements that includes-

Industry Framework- It relates to the interaction of customers, suppliers, economic factors and technological developments that influences competition within a particular sector (Beske 2012). The four drivers within this model that affects the supply chain structure includes-

Variation in demand-It affects the stability of production assets workload and is the major driver of efficiency in production.

Product lifecycle- The lifecycle of the product becomes shorter in response to advancement of technology. Consequently, the companies are forced to increase the product development and renew their portfolios.

Mediation cost of the market- The mediation cost of market refers to the cost that are linked with the disparity between the demand and supply of products.

Relevance of asset cost to total business cost- It becomes vital in industries where companies profit has high correlation with asset utilization rate.

Exceptional value proposal- It requires clear knowledge about the competitive positioning of the company with respect to their supply chain. It also helps the organization in differentiating from their competitors and also aids in wining customer orders.

Managerial focus- It emphasizes on the efficiency performance indicators despite the competitive positioning that is defined by the companies. In other words, this approach also encourages organization in focusing on seeking efficiencies, which might conflict their value proposal to consumers.

Internal process- This refers to the supply chain process, which means proper connection within the activities of supply chain (Cho et al. 2012). Some of the vital factors that are encompassed by internal process are utilization of asset and area of decoupling point. The decoupling point refers to the value chain process where the commodity takes unique characteristics for group of consumers.

The supply chain strategy can be illustrated by creating an analogy based on four paradigms as given below:

Lean Supply chain- This paradigm essentially focuses on reduction of waste for increasing value added and fulfill the requirements of the customers. For the hotel industry, the lean paradigm is a practicing exercise for maximizing their internal efficiency (Monczka et al. 2015).  It facilitates the customers for accessing quality service by enhancing reduction of cost and enabling economic manufacturing of low quantities. In order to provide value to consumer, this approach seeks various ways of reducing demand variation by using their assets effectively. Therefore, hotel industry does demand evaluation by taking into consideration all factors of demand derivation including business environment, seasonality etc. For example, Starwoods and resorts Worldwide applies lean supply chain practice on their operation, which helps them in gaining$100 million profit to their bottom line as it adds value through simplifying, streamiling and optimizing operations.

Four Elements Shaping Supply Chain Strategy

Agile supply chain- As the requirements of customer vary continuously, supply chain flexibility is necessary to future changes. With respect to the operation manager of a specific hotel, this paradigm is vital in meeting customers changing preferences and addressing the demand volatility challenges (Stadtler 2015). Therefore, agility is significant in creating the ability to respond to unpredictable market changes as well as increased environmental turbulence level in terms of variation in services. In hotel industry context, few agile practices in supply chain strategy are:

• Increasing occurrence of  new packages
• Improving services offered to customer
• Implementing IT for co-coordinating as well as integrating activities

For example, Naza Tallya hotel apllies agile supply chain practice for meeting the requirement of customers and maximizing profitability level.

Hybrid supply chain- The combination of lean and agile practices is referred to as hybrid supply chain. This strategy is appropriate for the organization that attempts to become mass consumer. Moreover, adoption of this strategy helps the industry in maintaining competitive advantage over their rivals.

Most of the hotel firms adopt hybrid supply chain strategy in order to maximize profit and attain competitive advantage against their rivalries. Successful supply chain strategy entails distributing the right commodity to the right customer from the suppliers. For example, Marriott international adopts hybrid practices in order to ensure consistent service around the globe.

The hotel industries interaction with their suppliers has huge implication on the supply chain management. It has been opined by Seuring (2013), the buying organization should be aware of their actions for building strong relationship with supplier. Therefore, the interaction of hotel industry with their suppliers has huge implication on the quality of product, on-time delivery and the product cost. They tries to maintain good interaction with their suppliers in order satisfy their customers and expand their business. Therefore, strong relationship with suppliers produces higher quality products, which in turn increases consumer satisfaction. Additionally, it leads to on-time delivery of products and this minimizes their inventory and attains customers trust. They makes huge contribution in innovating product, which helps the industry in attracting more customers (Zhu Sarkis  and Lai 2013). They also enhance competition level within the industry based on pricing and quality.

Some issues arises when the hotel industry interacts with their suppliers and this adversely impacts on the financial performance. The problem mainly arises due to lack of coordination between hotel management and the suppliers. In addition, the decision that team takes along the supply operations sometimes creates problems. Even if the coordination is perfect, delay in production as well as procurement creates issues in supply chain operations. One solution in reducing delay in supply chain is by reducing order –to- delivery time, which in turn helps the hotel industry in combating with the fluctuations in supply chain. Moreover, focusing on customer demand through POS (point of sale) collection of data and EDI (electronic data interchange) helps the hotel industry in reducing distortions in communication. Even lower prices of products helps the hotels in attracting more customers in the market.

Effective teamwork has huge significance in both the individuals and organization. Working in a team helped me in accomplishing the organizational targets and increased my efficiency. It improved my communication skill and sharing of ideas increased my knowledge. It also allows all the members including me to use my skills in making the supply chain operations faster. While working in a team, I was able to understand my strength as well as weakness. In addition, efficient communication with the team members helped me in facing the challenges that comes within organization and facilitated me in solving the problem efficiently. It also improved my relationship with other team members. Overall, while working in a supply chain team increased my productivity and improved my performance.  

Group work improved my creativity in the supply chain operations of this industry.  Apart from this, working in the group facilitated me in understanding the customer’s and other employee’s behavior and their preferences. At times, intrinsic conflict occurring due to individual thinking among the members in group also discouraged me in sharing my views about implementation of work.  Moreover, it also helped me in gathering more knowledge from the experienced employees of the organization. In addition, discussing with other members in group helped me in innovating new ideas about producing and delivering the product to the customer.

As the target was given to each individual, it helped me in achieving it within the specified time frame. It also facilitated me in focusing on the strategic goals that is related to cost or value. Furthermore, the knowledge gained from the group work also helped me in managing the supply chain operations effectively. It also helped  us in analyzing the products and trends of the consumption patterns. Adoption of new technology within the organization also reduced all the members’ workload. One of which includes implementation of lean six sigma. This helped me in gaining knowledge about the practice, which focuses on the customers and transfer of solutions in all the organizations in the global market.

Therefore, working in team or group increased my efficiency in work and knowledge about different subject. It helped me understanding people more easily and increased my patience. I have learned to become more focus in work and apply new ideas effectively. Therefore, teamwork helps the organization in gaining competitive advantage and maximizes profitability level.

References

Barney, J.B., 2012. Purchasing, supply chain management and sustained competitive advantage: The relevance of resource?based theory. Journal of supply chain management, 48(2), pp.3-6.

Beske, P., 2012. Dynamic capabilities and sustainable supply chain management. International Journal of Physical Distribution & Logistics Management, 42(4), pp.372-387.

Cho, D.W., Lee, Y.H., Ahn, S.H. and Hwang, M.K., 2012. A framework for measuring the performance of service supply chain management. Computers & Industrial Engineering, 62(3), pp.801-818.

Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.

Seuring, S., 2013. A review of modeling approaches for sustainable supply chain management. Decision support systems, 54(4), pp.1513-1520.

Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Vlachos, I. and Bogdanovic, A., 2013. Lean thinking in the European hotel industry. Tourism Management, 36, pp.354-363.

Wang, Y.F., Chen, S.P., Lee, Y.C. and Tsai, C.T.S., 2013. Developing green management standards for restaurants: An application of green supply chain management. International Journal of Hospitality Management, 34, pp.263-273.

Xu, X. and Gursoy, D., 2015. A conceptual framework of sustainable hospitality supply chain management. Journal of Hospitality Marketing & Management, 24(3), pp.229-259.

Zhu, Q., Sarkis, J. and Lai, K.H., 2013. Institutional-based antecedents and performance outcomes of internal and external green supply chain management practices. Journal of Purchasing and Supply Management, 19(2), pp.106-117.