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5 Tips to Cut Hotel Supply Chain Costs

Michael Wilson | Aug 28, 2019

Category: Hospitality

In the hotel business, your profit is often controlled by your supply chain. The more you can cut your supply chain costs, the more you can cut your overhead; the more you can cut ...

In the hotel business, your profit is often controlled by your supply chain. The more you can cut your supply chain costs, the more you can cut your overhead; the more you can cut your overhead, the higher the return on your investments. However, managing and optimizing your supply chain isn't an easy task.

Start with these five important tips to reduce the cost of your hotel hospitality supplies.

1. Keep up with pricing changes and negotiate!

Situations can change from time to time. What was the cheapest available price a year ago isn't necessarily the cheapest price now. Don't be afraid to negotiate with your vendors, especially the vendors that you have long-standing relationships with. As long as you're professional and courteous, some negotiations are to be expected.

There's value in a long-running contract. Many vendors are more than willing to offer loyalty discounts in exchange for the knowledge that the relationship is going to continue. You may also be able to save money by bundling some of the things that you purchase with a single vendor, rather than using a different vendor for each item.

2. Increase your order size and decrease the number of deliveries.

If there are items that you know you'll need, it may be worth it to exchange your liquidity for larger order sizes. A larger order size doesn't just give you greater bulk discounts. It also cuts your transportation and shipment costs.

Take a look at the items that you're purchasing regularly in order to fine-tune and optimize your orders and shipping. There may even be opportunities to combine items into single shipments, if you can find vendors that can supply multiple products.

3. Find local vendors for your products.

A few years ago, there may not have been any local resources for your products. But today, there could be. Finding local vendors for your products can save you a lot of money, as you don't need to pay shipping fees, transportation costs, and potential duty fees. You may even be able to find products that are higher quality nearby.

4. Invest in a hotel asset management system.

When in doubt, turn to your technology. A hotel asset management system will print reports and run analysis to determine where your spending is and what you can do to optimize it. You can run reports regularly to identify any costs that are unnecessarily high. 

Hotel asset management systems do more than just help you cut your direct expenses. They also help you track your inventory so you never run out of necessary products. Run reports related to waste to make sure you aren't ordering too much. Regularly print and analyze your contracts for opportunities to improve.

5. Sign up for procurement consulting with AFFLINK.

A procurement consultant will have the expertise that is often necessary to determine whether your current spending is wasteful. Professional procurement specialists know how to source many of the most popular hotel products, as well as how to negotiate on a company's behalf.

A procurement consultant such as AFFLINK can help you fine-tune your current procurement operations, locate more affordable vendors, and find solutions to any existing procurement problems.

The time to improve upon your supply chain is now. Through a better supply chain, you can reduce your administrative time, cut your expenses, and improve the services that you're able to offer your guests. To start improving your hotel's procurement today, contact the experts at AFFLINK.

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