APPLE REVIEWER

• Supply chain management differs from the logistics concept
• Logistics refers to managing how resources are acquired, stored, and transported to the final destination
• Managing the supply chain recognizes all conventional logistics and practices, such as marketing, manufacturing of new products, finance, and customer support
• Every product offered by tourism and hospitality businesses undergoes different processes before being sold to consumers
• Supply chain refers to the processes involved in procuring, producing, and delivering goods and services to customers
• The purpose of a supply chain is to coordinate the flow of materials, services, and information to maximize customer value and meet their expectations
• Hospitality industry focuses on delivering customer value at the cheapest possible costs
• Increased focus on practices and improvement of supply chain management in the hospitality industry
• Well-established supply chain management can give hospitality businesses a sustainable competitive advantage
• In a restaurant supply chain
• Identify food suppliers such as farmers and wholesalers and negotiate contracts with them (sourcing)
• Find transport providers to move raw materials to the restaurant (logistics)
• Suppliers may also move goods to the customer (restaurant)
• Raw materials are turned into sellable goods (production) and served to customers (distribution)
• Keep track of supplies for appropriate reorder amounts and schedules, known as inventory management
• Hotel operations also undergo the sourcing process for guest room amenities, furniture, and appliances
• Different types of inventories used in the supply chain
• Raw materials: components used in production, examples include livestock, fruits, and vegetables
• Work-in-process inventories (semi-finished goods): stocks of unfinished goods in production
• Finished goods ready for sale: final products obtained after applying the production process to raw materials and semi-finished goods
• Service inventories: how much service a business can provide for a specific period
• Challenges in the Hospitality Supply Chain
• Raw material costs and bulk purchasing to reduce costs
• Material ordering costs and the challenge of consolidating items for orders
• Inventory handling and stocking large quantities of materials
• Emergency purchases due to unforeseen fluctuations in demand
• Supply chain management involves procurement, production, and delivery of goods and services to customers
• It includes sourcing raw materials, storing, producing, and distributing finished goods to customers
• Purpose includes considering every stakeholder's impact on cost and making the end product conform to customer requirements
• Aims for efficient and cost-efficient processes across the entire system, considering customer service and value requirements
• Strategic level:

  • Responsible for long-term decisions of the company that lay the groundwork for the entire supply chain process
  • Includes deciding on products and services, managing inventory life cycles, tracking market trends, and coordinating the corporate plan with the supply strategy
  • Essential for creating an advantageous process that integrates all business divisions and ensures choices reflect the company's overall objectives
  • Guarantees that every link in the supply chain functions to deliver products to customers and enable the business to profit
• Tactical level:

  • Involves short- and medium-term decisions in the supply chain
  • Defines specific processes like manufacturing high-quality products at the lowest cost
  • Focuses on controlling costs, minimizing risks, and achieving the best end value for customers
  • Specific decisions include sourcing, procurement, competition benchmarking, purchasing choices, and determining customer demand and habits focus
• Operational level:

  • Refers to day-to-day processes, decision-making, and planning to keep the supply chain running
  • Must align decisions with strategic and tactical decisions
  • Examples of decisions include daily and weekly forecasting for resource and capacity planning and monitoring logistics for inventory and materials availability
• Difficulties in managing the supply chain:

  • Supply chain strategies are affected by the development chain, impacting product design and supply chain characteristics
  • Designing a supply chain to minimize costs while maintaining service levels is challenging due to complex networks, multiple performance measures, and a dynamic system
  • Uncertainty and risk are inherent due to varied customer demand and travel factors
  • One-size-fits-all strategy is not appropriate, as different customer segments, channels, or products require varied supply chain strategies
• Understanding these difficulties allows organizations to adjust their strategies to current needs and address common challenges faced in supply chain management operations
• What are the four phases of the guest cycle?

  Pre-arrival, arrival, occupancy, departure
• What occurs during the pre-arrival phase?

  Guests make room reservations and provide information
• What information is recorded during the pre-arrival phase?

  Date of arrival, departure, room type
• What happens during the arrival phase?

  Guests register and provide or validate information
• What is the occupancy phase of the guest cycle?

  Period when a guest stays in a hotel