Build Back Better
Build Back Better is a call to action throughout many sectors in our – hopefully – post COVID world. Perhaps that should be Co-COVID because safely co-habiting with it is probably a more realistic expectation until scientific progress provides us with greater protection.
Business owners and executives will have a very clear focus on business continuity right now. Sales are key and customer confidence will have a huge part to play in reforming the foundations of balance sheets.
In addition to sales, well-executed procurement practices can generate savings and efficiencies, which will quickly and positively impact your P&Ls. The aim has to be on getting things done, not necessarily perfectly first time but decisions can be course-corrected and finessed through time.
Collaborate with your supply chain
Routine monthly payments will have been missed, contracts are potentially in breach, and relations with your supplier community may feel strained in some quarters. Accept at this point that nobody has all the answers but we all need each other, the customers and guests will eventually find their way back to our doors and we want to be in the strongest possible position to welcome their return.
Collaborate with your supply chains to seek a more authentic, empathetic and even-handed way of working together. It is more than likely that your suppliers will have been through a similarly traumatic experience and suffered tremendous revenue reductions during the lockdown period. Being upfront and confronting issues early on will make it so much easier to find solutions that work for all parties. Surrender the old ways of doing things and find a way through to transformational growth.
What to do
Approach suppliers for revised and reduced cost pricing – ASK, ASK and ASK again until you get where you need to be to make the numbers work
Read the small print to renegotiate and preferably void onerous contractual terms
Seek ways to free up cash held in stock
Operate on a Just in Time basis with your suppliers
Request extended payment terms
Take advantage of all available government funding
Awaken your senses of economy and frugality
Consolidate your supply chains and aim to be as close to the primary source as possible across all categories
What Not To Do
Compromise on quality
Ignore supplier communications
Become downhearted and assume that anything and everything is impossible
Forget that this time will pass business will improve
Interpersonal skills are paramount in the Hospitality sector at the best of times. Whilst digital e-procurement tools always have a place to help control costs and provide business-critical data to help form decision making, it is vital that the procurement function deploys its soft skills to help navigate businesses through supplier relations to prevent disputes arising and build strong strategic alliances for new and exciting ways of working together.
Buyers and suppliers will always find innovative ways to make a deal work for their organisations and having a ‘Cold Eye’ review of your supply chain by an independent and impartial procurement professional can yield previously untapped savings.
For further information on how Procurement can make your business more resilient in a Co-COVID landscape, please feel free to contact firstname.lastname@example.org for a review.
Alastair Roy has 25 years experience in Procurement working for Stakis Hotels, Apex Hotels and latterly as Procurement Director for Gleneagles Hotel.