Hotel procurement challenges and how technology can solve them

As technology providers to the hospitality sector here at Access, we’ve been instrumental in the technological shift in hotel and hospitality procurement. We’ve helped businesses save both time and costs through more efficient procurement processes.  

In this article, we’re going to look at exactly how technology has and continues to shape procurement for hotels and how holding back on technology investment could leave your business lagging behind the competition.  

Common procurement challenges for hotels

Procurement can be particularly challenging for the hotel industry for many reasons.  

In the fast-paced world of hotel management, decisions need to be made quickly and efficiently, and there is little room for error. Hotel operators need to procure a diverse range of products at high volumes to keep everything operating smoothly. Many of these are consumable items which need to be purchased regularly, and perishable items that need careful inventory management to keep them from expiring before use. t’s a lot for one person to manage alone, and procurement costs for hotels can often include entire departments of people tasked with keeping their sites stocked and operational. 

Here are some of the common challenges we hear about when helping our customers streamline their procurement processes: 

Supply Chain Issues 

Global tensions, natural disasters, and even weather can play an important role in supply chains, and volatility in supply chains can have a huge impact on hotel operations.  

That’s why it’s so important to be strategic in your procurement processes. It’s a good idea to prioritise good communication with your suppliers so that they can warn you of potential disruptions and shortages before they happen. You should also ensure that you have diversified your supply chain, to mitigate unexpected problems. Of course, this can come with its own logistical challenges, which is why so many hotel operators opt to manage this using hospitality purchase-to-pay software. 

Pricing Fluctuations 

Likewise, there are many factors influencing the prices of goods, particularly consumable items. This means that your procurement needs to be agile so that you can respond quickly to changing prices, and look for solutions that minimise the cost to the business. That agility can be greatly enhanced by software solutions. 

Inventory Management 

Managing inventory across various departments and multiple sites can be a huge challenge. Decentralised stock management and procurement can result in over-ordering, increased wastage, and maverick spending, all of which not only impact the bottom line but can disrupt your ability to deliver the service your customers expect. 

Regulatory Compliance Requirements 

Hotels are subject to a range of legal and regulatory requirements, and many of these relate to the products you purchase regularly. It’s vital that you carry out due diligence on new suppliers to ensure that the products or services they are supplying are compliant and stay that way over time. 

Maverick Spending 

Maverick spending usually happens when someone in the business feels frustrated by lengthy approval processes and slow responses from the purchasing department when they have an urgent need. Understandably, a general manager, kitchen manager, or another responsible team member might prioritise operational continuity over company policies, but it can be expensive for the business. Additionally, there is no guarantee that the same due diligence has been undertaken when choosing suppliers if they aren’t going through the official approval process.  

The business impact of inefficient hotel procurement processes

Keeping your hotel business running efficiently and profitably relies on each site having the tools, products, and equipment they need to deliver the service your customers demand. Managing inventory and having a reliable supply chain are two of the most crucial factors when it comes to running a successful hotel business.  

Procurement challenges can lead to issues with missed orders (or conversely over-ordering), difficulties predicting cash flow, paying too much for supplies, and so much more. 

Procurement issues can also lead to a fall in the quality of your services. They can result in a drop in standards of customer service, cause increased stress levels in your staff, and even force a reduction in your capacity and availability. According to research from BRITA Professional, 57% of those surveyed said that supply chain disruptions have forced them to make last-minute changes to their menus, resulting in a poor customer experience.  

An efficient and robust procurement process can protect your business, save you money, and keep your hotels running smoothly. Introducing hotel procurement software can help you to effectively manage costs, inventory, and even supplier relationships from one place.  

Best practices for optimising hotel procurement with technology

So, how can you avoid the pitfalls of inefficient procurement, and keep your business operating at optimal levels? 

Centralise the process 

Centralising procurement allows you to manage everything from one point of control. It offers oversight of the bigger picture; when you can see all your suppliers, purchases, and inventory in one place, you can make more strategic purchasing decisions.  

It also allows you to make bulk purchases and enjoy the cost savings that come from economies of scale. 

Make it as simple as possible 

Reduce maverick spending and reduce admin tasks by automating certain processes, for example, automatic approval for spending up to a certain amount - provided the purchase is made from a pre-approved supplier. Better yet, consider integrating a system that offers a dynamic approval process. 

Create vendor catalogues that can be filtered according to need, so that all stakeholders can easily access a list of approved suppliers and make purchases when they need to. 

Ensure that all information is available in one place so that you have strategic oversight of everything. 

Manage your supplier relationships 

When dealing with multiple suppliers across your business, it can be difficult to maintain good levels of communication and build strong relationships. When you use purchase to pay software, you can manage all your suppliers from one central control point. This allows you to not only communicate and collaborate with them, but also track performance, review contracts, and easily source new suppliers if something goes wrong. 

Inventory management 

When you have all the information you need, you can make strategic and informed decisions about what to purchase and when. By integrating your inventory management system with your EPOS, you can gather real-time insights to manage stock levels and predict demand. 

Demand forecasting is incredibly important in the hotel industry as demand is not stable and consistent throughout the year, and even varies according to the day of the week. Using historical data, you can get a better understanding of what demand is likely to be, and therefore order accordingly. 

Adopt the right technology to streamline procurement operations 

By integrating key technology into your hotel business, you can optimise and streamline your procurement, thus saving money and maximising operational efficiency.  

Hotel purchase to pay software offers opportunities to easily manage your supplier relationships and mitigate the problems caused by supply chain disruptions. It allows you to centralise the processes at each stage of procurement, thus saving both time and money.  

Procurement software for hotels makes it easier to automate much of the admin associated with procurement, and to make the entire process work more quickly and efficiently. It also allows you to easily monitor compliance and sustainability credentials in your supply chain and the products you are using.  

Inventory management software can give you the insights you need to manage stock levels, move products where they are needed, and find opportunities to make cost savings. It also provides access to reporting, which will help with demand forecasting. 

You can also use technology to optimise the profitability of dishes on your menu and cost individual ingredients. Menu Engineering also offers allergen and nutritional information tracking to support compliance.  

User adoption and change management strategies 

Adopting new software into a business can cause significant disruption if the change is managed poorly. It’s important to communicate the benefits technology will offer to everyone in the organisation, not only for the business but also for individual departments and even team members.  

Effective change management relies on good communication. Ensure that all users understand the operational need for the change and the strategic reasons behind the decision.  

Approach the introduction of new technology and software as a process; lay out a plan for how it should be implemented, and who needs to be involved in each stage. By ensuring staff understand why the change is happening, how it will affect them, and more importantly how it will benefit them, you can reduce any friction. 

Put a proper training plan in place to ensure that everyone knows how to use the new technology, so they can feel confident with it before they have to use it. This is made easier when you work with an experienced company that offers support with rolling the technology out across your organisation.  

Streamline hotel procurement with Access Procure Wizard

In this article, we’ve discussed the role procurement plays in operations in the hotel industry. We’ve looked at the challenges hotels face when it comes to procurement and ways to overcome these challenges. And finally, we’ve talked about how procurement software can make your operations more efficient.  

For large organisations, the introduction of new software won’t be without some challenges, but the potential benefits make it worthwhile for the majority of hotel operators. That’s why it’s important to choose the right partner to guide you and help you implement these improvements to your procurement processes. 

Access Procure Wizard is an all-in-one solution which enables you to manage everything in one place.  

Our fully integrated procurement system has helped operators secure millions in efficiency savings by streamlining procurement, reducing indirect spend and automating invoice processing. 

Procure Wizard is a cloud-based system that integrates purchase to pay software, menu engineering software, and inventory management into one solution. And it’s 100% paperless, having digitised 1.4m paper invoices so far.  

Procure Wizard makes procurement easy, offering e-purchase orders, price comparisons, dynamic approval, supplier management tools, and so much more.  

Did you know Access Procure Wizard is perfect for managing hotel procurement and purchase to pay processes?  

• Laundry management – Efficiently manage your laundry operations across all your sites and optimise costs associated with outsourced laundry services.  
• Menu engineering - Ensure menu profitability by costing individual ingredients, analysing menu performance and tracking allergen and nutritional information.  
• Supplier management – Manage all your suppliers in one centralised point of control where you can track performance, review contracts and onboard new suppliers.  
• Inventory control – Gain real-time insights into stock levels across multiple locations, enabling effective demand forecasting and inventory management.  
• Paperless purchase to pay – Automate the entire procurement cycle, from e-purchase orders and dynamic approvals to invoice processing and payments.  

With Procure Wizard, you’ll gain complete control and visibility over your hotel’s procurement operations to enable you to make informed decisions and control costs.  

Get in touch for a personalised demo to find out how Access Procure Wizard can help you.