In the Power of Purchase seminar held during the recently concluded Food Hospitality World (FHW) Goa, purchase managers from leading hotel brands in Goa discussed how technology is changing the way hotels make their buying decisions and why logistics is still a big challenge in Tier II markets By Steena Joy
The first day of the Food Hospitality World (FHW) Goa exhibition witnessed The Power of Purchase session organised by Hospitality Purchasing Managers Forum (HPMF). Purchase managers from some of the leading hotels in the state, deliberated on the changing dynamics of hospitality procurement in a technology driven environment. The panel members were Nitin Fadthe, purchase manager, Alila Diwa Goa; Prasad Phondekar, materials manager, Park Hyatt Goa Resort & Spa; Ramesh Iyer, AVP – materials management, Delta Corp; Sundeep Mujumdar, deputy GM Procurement, Diana Buildwell and L Subbaiyer, chief cost controller, Whispering Resorts.
Commenting on the factors driving change in the segment, Prasad Phondekar said, “Today’s guests are different. They are more tech savvy and many are frequent travellers. So their expectations are also rising fast. But technology is also expanding at the same speed so it helps us to service our customers better. Technology is changing the procurement chain. It was difficult to procure products earlier. Now more vendors are coming to Goa and more products are available online.” Ramesh Iyer agreed, “Compared to a few years ago, more travel is happening now. So there is increased awareness and exposure, driven by the Internet. Knowledge is available on our fingertips. So it changes the way we work. Earlier it was more word of mouth, so finding a supplier say in Shanghai or New York was difficult. Now, a purchase manager can use technology to his advantage. Innovations are always happening in technology. Our challenge is to convert this into opportunity.”
Speaking on the variety of products available online, Sundeep Mujumdar informed, “There are many changes in product lines. People are more travelled. It is a global market and sourcing has become very wide so sourcing the right product is a very big challenge and more so, sourcing something different is also a big challenge.”
Logistic loophole
Outlining the logistics challenges in Tier II markets, L Subbaiyer opined, “It was very difficult to get materials in Goa. We had to depend on Maharashtra and Karnataka and this meant bearing the high costs of transportation. Now with technology, we have a database of many vendors so we can get the right quality at the right price. Data is very important to our business. The HPMF forum is very helpful in giving us a lot of choice.”
Nitin Fadthe too reiterated that logistics posed a major challenge for procurement and on time delivery. “Goa has to depend on neighbouring states for supplies. There has been no improvement in terms of logistics in the past 15 years. I hope this changes soon.”
Phondekar pointed out that technology is a double edged sword. “While technology gives us the speed to perform better, it also means that our guests who are tuned into technology have increased expectations from our products.”
The panel then touched upon the sensitive issue of vendor relationships. Mujumdar opined that it is necessary to maintain a certain ‘laxman rekha’ or line of control. “Most of the time you are dealing with vendors you have never dealt with before. By maintaining a good vendor relationship you can reach the right supplier.” Subbaiyer also believed that trust is important. “Supplier and hotel relationship is very important to the procurement process,” he said.
Procuring and the planet
The discussion then veered to green procurement and its implications for the industry. Mujumdar said, “Responsible procurement is very important. We should emphasise on less carbon emissions while procuring our products. Most new hotel projects are using LED lights, etc so this saves money as well as the environment.” Iyer also felt that green procurement is a way of life. “Paperless communications, ERP, have all become a way of life for the industry. Waste water treatment is another area of responsible procurement.”
Maintaining quality in product procurement is another challenge. “When we set our standards high, then suppliers will also strive to improve their standards. There can be no compromise on standards,” he stated.
Fadthe suggested that HPMF should be involved in logistics as well. “HPMF should look at sieving through vendors and then recommending quality transport vendors so that a standard can be set,” he said. Phondekar even suggested to implement Just-In-Time (JIT) so that hotels can source their supplies from within a 100 km radius.
Nitin Nagrale, director materials, Radisson Blu Plaza Mumbai, and founder and general secretary, HPMF, giving the vote of thanks said that HPMF which had started with just three members five years ago now has a membership of 910, with chapters in Goa, Pune, Chennai, Delhi, etc. “We need to grow further. We want to get into Tier II/Tier III cities. We are targeting to touch 1,000 members by November 26, 2015. Like chefs and F&B managers, we want purchase managers too to come to the forefront. We want them to be known, understood and accepted by the industry, “ he concluded.