The world’s supply chains have faced unparalleled strain in recent years, from labor and raw material shortages to shipping backlogs and production disruptions. While many of these challenges aren’t new to hospitality, the strategies to address them effectively are evolving quickly.
As such, supply chain risk management has emerged as a top priority for many property owners — particularly those looking to leverage supply-chain resilience as a competitive edge for their businesses. What’s become increasingly clear in procurement is that hoteliers cannot afford to “wait and hope” or adopt a passive mindset when navigating the complex global supply chain landscape.
Three proactive risk management strategies can help hotel owners and operators build a more resilient, future-proof supply chain.
Diversification is a must. The importance of diversification cannot be overstated.
Pre-pandemic, many properties and procurement groups leaned heavily on single suppliers or limited vendor networks, opting to go “deep” rather than wide when sourcing. During the pandemic, many businesses learned firsthand that when one link in the supply chain breaks, there are many ripples — delayed shipments, higher costs, product shortages, logistics logjams and more.
Multi-sourcing, or sourcing from multiple suppliers, is an effective solution and a core strategy of leading procurement organizations, as it minimizes the risk of a single point of failure. By identifying multiple trusted sources for critical products and services, properties can exercise greater choice and control over item selection, reduce the risk of product outages, shop for the most cost-competitive pricing and minimize disruptions to the guest experience.
The future of global trade is nearshoring. As global trade policies continue to evolve, the practice of nearshoring, or moving manufacturing operations closer to home, is rapidly gaining traction. A number of U.S.-based companies, for example, have increased production throughout the Americas in recent years following supply chain disruptions around the world, especially during the global pandemic.
Reducing dependence on distant manufacturing locations means properties can enjoy quicker replenishment cycles and a more responsive supply chain, which is particularly valuable when managing high-demand periods or unexpected shortages. Although nearshoring may not be feasible for all products, the benefits make nearshoring an increasingly attractive strategy for better inventory management and mitigating future disruptions.
Good data is key. Efficient navigation of today’s supply chain complexities requires advanced reporting capabilities that promote transparency and effective demand planning.
Real-time visibility into on-hand inventory, order tracking and projected future demand allows hoteliers to effectively anticipate the flow of goods and services, positioning them to make informed purchasing decisions that minimize waste and reduce the need for safety stock. A data-driven approach also provides properties with a competitive edge when adapting to changing demand patterns, whether in response to seasonal fluctuations or new market trends.
By investing in the right reporting tools, owners and operators can better anticipate lead times, protect against product outages, identify new operational efficiencies and ensure a consistent guest experience.
While supply chain challenges will continue to evolve, the right strategies, services and partnerships are already in place to address them. Whether through multi-sourcing, nearshoring or demand planning, hoteliers have access to a host of tools and resources to navigate sourcing hurdles.
By adopting these proactive risk management strategies, hotel owners and operators can protect their bottom line, mitigate risks and build a resilient, future-proof supply chain that supports growth, operational efficiency and guest satisfaction.
Anu Saxena is the president and global head of Hilton Supply Management.
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