PROCUREMENT IN A HOTEL By 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 Price  Right specifications  Right Supplier  Right quantity  Correct stock levels  Best yields  Timely payments to vendors  Sustainable Development  CSR  Satisfied Internal Customers & Management

PROCUREMENT INTERFACE… PROCUREMENT DEPARTMENT PROCUREMENT DEPARTMENT

PROCUREMENT PROCESS…. Managing interface : Define Specification Select SupplierContract Agreement OrderingExpeditingEvaluation Get SpecificationAssure adequate supplier selection Prepare contractEstablish 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 ContractOrder-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?