Connecting hotels and their suppliers to the Pagero network improves profitability and efficiency for all participants and helps deliver a better hotel guest experience. The industry is a superb example of a true buyer / supplier network as multiple hotels will buy from a shared network of suppliers. Hotel supply chains, particularly for food and beverage have unique qualities that lend themselves to the efficiencies that e-messaging, such as e-order and e-invoice offers. In particular:

Manual order processes – Most hotels email orders to suppliers and suppliers commonly create orders manually in their systems – a very time consuming process.
Missed Orders – Due to the high volume of daily emailed orders from multiple hotels, it is easy for orders to be missed, leading to product shortages at the hotels.
High volume of daily orders – Hotels must ensure orders are placed before delivery cut-off times and suppliers must process large order volumes at peak times.
Many perishable goods – Rapid ordering and delivery is required. In some cases, orders will be placed after restaurant closing and delivery will be the next day to ensure freshness.
Delivery accuracy and timing – Hotels must know when goods will be delivered and what will be delivered, especially for F&B items, for which restaurant menus are dependent.
Changing pricing – Many purchases are made against fast changing market price catalogues, causing a large overhead maintaining pricing in the hotel procurement system.
Supplier and buyer product descriptions differ – Hotels may buy the same items from multiple suppliers, whose product codes and descriptions differ to the hotel’s.
Products may be rejected – Delivered goods are often rejected during the receiving process, due to quality reasons. Invoices must reflect the adjusted delivery.

The benefits of e-messaging for the hospitality supply chain.

Addressing the hotel supply chain challenges mentioned above, through the implementation of e-messaging provides significant benefits. These include:

Supply chain efficiencies –For e-ordering, supplier price catalogues can be electronically received from the suppliers for automated upload, removing manual maintenance of catalogues in the hotel procurement system. Orders are tracked to the supplier and hotels will be advised when they are accepted, giving comfort that the order is being processed. The hotel receives pre-delivery advices so they know what will arrive and when. There will be a significant reduction in delayed or missed deliveries due to incorrect or missed orders.

Hotel process savings – The removal of manual order and invoice processing provides extensive headcount savings. In the finance department, order and invoice records will be available in an electronic format for easy review and approval. Handling of incorrect invoices will be reduced. Matching product codes on orders and invoices improves the speed of invoice reconciliation.

Hotel procurement savings – Ensuring products are ordered at the correct catalogue price removes overpayment. Use of Pagero’s Data Accuracy Management Module will ensure that invoices comply with contracts, again reducing overpayments. Analysis of non-contracted purchases will highlight products that should be bought under contract for additional savings.

Supplier process savings – If orders contain the hotel’s product codes, the supplier can set rules to automatically translate these to their own product codes, enabling automated order creation, significantly reducing manual administration, especially at peak times. There will also be a significant reduction in the time required to contact hotels if incorrect orders are received.

Paul Kerridge
Paul Kerridge is Pagero Gulf’s Head of Partnerships and Alliances – MENA. Previously his positions included Vice President for IT Solutions, Service Delivery and E-Business at Ingram Micro Mobility (previously Brightpoint Inc.) and Managing Director of Business Logic Systems. Before this he held senior product positions within mobile operators Vodafone UK and BellSouth NZ. He has a degree in Commerce from Auckland University, New Zealand. Paul has been operating out of Dubai for 14 Years.