Supply-chain disruptions have had a massive impact on the hotel industry, slowing and derailing development and property-improvement plans.
Hilton Supply Management, a global procurement and supply-chain services program supporting more than 12,000 properties — half of which are non-Hilton-branded hotels — has helped to mitigate those pandemic-induced disruptions by working with a diverse range of suppliers.
Hilton Supply Management procures hotel furniture, fixtures and equipment, as well as operating supplies. When one of its suppliers can't fill an order on a required timeline, the program has the flexibility to try another.
Anu Saxena, president and global head of Hilton Supply Management, said that diversity in the supply chain has been a core value and strength of the program.
Hilton Supply Management "encourages the growth and development of a diverse range of suppliers," she said in an email interview. "The turmoil of the pandemic could have slowed our progress, but we took a different approach and instead leaned into our diverse suppliers."
Early in the COVID-19 pandemic, Hilton Supply Management contracted with a minority-owned company to supply personal protective equipment and a veteran-owned company to supply thermal scanners, Saxena said.
However, the push to expand supplier diversity began prior to the onset of the pandemic.
"We've seen good progress ... [building] a strong network with more than 2,000 diverse suppliers and $180 million in spend, and we frequently rely on them," she said.
The focus now is on how the industry can continue to make these suppliers successful for additional global brands like Hilton, Saxena said.
"How do we continue to make an impact beyond spend? How can we work together to create an environment for monitoring and coaching suppliers even if they're not able to work with us just yet, but help prepare them for success and to join our expanding pipeline in the future?" she said.
A Sustainable Future
In addition to diversity and inclusion efforts, Hilton Supply Management has "remained unwavering" in its commitment to building a more sustainable supply chain, Saxena said.
"We found that commitment paid off during the pandemic and beyond because it expanded our reach and our ability to meet our customers' needs," she added.
Recently, Hilton Supply Management implemented a sustainability reporting platform for due diligence, which includes a report card on suppliers' ESG efforts and helps to navigate partnerships while adhering to ESG priorities.
"It's a collaborative tool that produces a sustainability scorecard for each company in the following categories: labor and human rights, environment, sustainable procurement and ethics," she said. "We, too, as a supplier provide our own scorecard to our customers who request it."
Assembling a talented team with a strong background in sustainability, including subject matter experts in categories such as energy, has been crucial for Hilton Supply Management.
"This has enabled us to offer our owners and hotels industry-leading programs to drive emissions reductions and utility cost savings, such as with our energy procurement program, LED lighting program and also to support the electrification of vehicles with our electric vehicle charging station program," she said. "These efforts tend to enable faster uptake with vetted suppliers and turnkey solutions."
During the pandemic and at the height of supply-chain disruptions, Hilton Supply Management saw strong demand for locally curated and sustainably sourced products.
"We continue to deliver quality products on time while significantly reducing our carbon footprint," she said.
What Clients Want
Broadly speaking, Saxena said clients of Hilton Supply Management are looking for more flexibility but also greater price protection.
The program has improved its spend management systems, as well as invested in master data management and predictive supply-chain applications to proactively manage product outages and work with its suppliers and customers to find alternatives.
"Simply put, our customers are looking for best-in-class technology to simplify the purchasing power. If we leverage market-leading technologies and pair that with industry experience and the ability to operate at a global scale, we can better support our customers all around," she said.
