PROCUREMENT IN A HOTELBy Sankar Narayanan - Westin Chennai Velachery

PROCUREMENT

Procurement department is the backbone of the hotel as around 40% of the cost of company lies in procurement cost

It is an important support function for day to day operations of the hotel

Responsible for efficient procurement of goods and services

Responsible for setting and adhering to all Procurement Policies and Procedures

OBJECTIVES

The basic objectives of procurement are:

Right PriceRight specificationsRight SupplierRight quantityCorrect stock levelsBest yieldsTimely payments to vendorsSustainable DevelopmentCSRSatisfied Internal Customers & Management

PROCUREMENT INTERFACE…

PROCUREMENTDEPARTMENT

PROCUREMENTDEPARTMENT

PROCUREMENT PROCESS…

.

Managing interface :

Define Specification

Select Supplier Contract Agreement

Ordering Expediting Evaluation

Get Specification Assure adequate supplier selection

Prepare contract Establish order routine

Establish Expediting routine

Assess supplier

-Function /Technical specification-Bring supplier knowledge to production

-Pre qualification of supplier- Supplier Audit-RFQ (Request for Quotation)

-Contracting Expertise-Negotiating Expertise- SLA’s

-Develop order routines-Order handling

-Expediting-Trouble shooting

-Supplier Evaluation-Supplier rating

-Functional Specification

-Supplier Selection proposal

Contract Order -Exception report- Invoices

-Preferred supplier list-Supplier ranking scheme

Role of Procurement

Elements

Documents

WHAT ELSE PROCUREMENT DOES… Purchase Manual

• To define various procurement activities, tasks and processes to complete these activities

Data Compilation

• Vendor Master Creation and update

• Item Master Creation and update

Market Information

• Trends, Seasonality, Crop schedules etc.

• Information of item rates and vendors from competitors, other hotels, catering units etc.

• Substitutes / alternates

WHAT ELSE…

Vendor Management

– Vendor Account opening process / Vendor Profile Data compilation

– Vendor Audit and Evaluation Process

– Vendor Appreciation Module

Develop Product Specifications

MIS submitted to the management on time

All India Contract database compilation

RECEIVING DEPARTMENT

All goods are received at the correct temperature – frozen chilled & dry

Goods are received in proper packaging – Plastic tubs, branded material in original packing, no torn packets or damaged tins & containers

All statutory markings have to be present on material, like – FPO, FSSAI, Agmark, etc.

All goods are verified and tallied against the purchase order

All goods are received as per the timings specified

Reports prepared and submitted as per standards

STORES DEPARTMENT

All goods are stored at their ambient temperature – Frozen, chilled & dry

Optimum par stocks to be maintained for all the Inventory items

Materials are strictly issued with an approved Requisition ONLY

Co-ordinate and update user departments on slow & non moving products

FIFO is strictly followed for all products

All standard procedures for storekeeping are strictly followed like – distance from floor and walls, heat, lighting, etc.

Reports prepared and submitted as per standards

• ANY QUESTIONS?