Supply Chain Management

Topics: Supply chain management, Supply chain, Management Pages: 5 (1598 words) Published: January 17, 2006
Thousands of activities are performed and coordinated within an organization, and every company at least one supply chain relationship with another organization. Research has led to the conclusion that "the structure of activities within and between companies is a critical cornerstone of creating unique and superior supply chain performance" (Lambert, 2005). Successful supply chain management requires integrating business processes with key members of the supply chain, because valuable resources are wasted when supply chains are not effectively managed. Standard business processes enable managers from different organizations in the supply chain to use a common language and link-up their organizations' processes with other members of the supply chain. Demand management is the supply chain management process that balances the guests' wants and needs with the capacity of the supply chain. Management can match supply with demand and have few disruptions if the appropriate process is already in place. The process is not limited to forecasting, but also includes matching supply and demand and increasing flexibility. An effective demand management system uses any available data to reduce uncertainty and provide efficient flow throughout the supply chain. Marketing requirements and production plans should be coordinated on a corporate level, so that multiple vendors are not delivering the same products for different prices to each hotel location. Instead, cost savings can be found in consolidation of orders. Supplier relationship management is the process that defines how a hotel interacts with its suppliers. As the name suggests, this is a mirror image of guest relationship management, because a hotel needs to foster relationships with its suppliers too. As in the case of guest relationship management, a hotel will forge close relationships with a small subset of its suppliers, and manage arm-length relationships with others. A contract is negotiated with each key supplier that defines the terms of the relationship. For segments of less critical suppliers, the contract is not negotiable. Supplier relationship management is about defining and managing these contracts. Long-term relationships are developed with a small core group of suppliers. The desired outcome is a win-win relationship where both parties benefit. Guest relationship management provides the structure for how the relationships with guests will be developed and maintained. Management identifies key guests and guest groups to be targeted as part of the hotel's mission. The goal is to segment guests based on their value over time and increase guest loyalty by providing customized products and services. The Director of Sales works with key guests to improve processes, eliminate demand variability, and non-value added activities. Performance reports are designed to measure the profitability of individual guests as well as the financial impact on the guest. Customer service management is the impression the hotel gives to the customer. Customer service provides the customer with real-time information on promised reservation dates or room blocks and also room availability for any future dates. The customer service process may also include assisting the customer with making, revising, or canceling reservations. In addition, customer service necessitates resolving any conflicts, problems, or unpleasantness in a timely manner that is to the guest's satisfaction. The reservation process involves more than making reservations. It also includes all activities necessary to define guest requirements and to design a process that permits the hotel to meet guest requests while minimizing the total cost. This is not just the logistics function, but instead needs to be implemented cross-functionally and with the coordination of key suppliers and guests. The objective is to develop a seamless process from the supplier to the organization and to its various guest...

References: Bhattacharya, S., Upadhye, A., & Dham, S. (July/September 2004). Reengineering a Hotel 's Purchasing Process. SETLabs Briefings, 2(3). Retrieved October 4, 2005, from
Chatur, A.A. (1 July 2005). Driving Costs Out of the Supply Chain: Inbound Logistics. Infosys Technologies Limited. Retrieved October 4, 2005, from
Hausman, W.H. (8 March 2005). Financial Flows & Supply Chain Efficiency. Visa Commercial Solutions. Retrieved October 1, 2005, from
Lambert, D.M. (15 September 2005). Supply Chain Management: Processes, Partnerships, Performance (2nd Edition). Supply Chain Management Institute
Neef, D. (14 April 2005). Supply Chain Ethics: The Devil is in the Details. Ethical Corporation. Retrieved October 2, 2005, from
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