By Angela Eberhart, Vice President of Account Management Strategic Accounts, Avendra. Published in Stay Boutique.
In the boutique and lifestyle industry, balancing priorities such as guest satisfaction with costs is constantly top-of-mind. Whether you’re responsible for the overall purchasing strategy of a luxury hotel or the day-to-day buying decisions of an intimate boutique property, you can continuously challenge yourself to do more to protect your bottom line while still providing a unique boutique experience and quality products your guests will love.
Here are six secrets to managing costs in your supply chain. These methods are effective and straightforward. The key is checking in on each of them, staying current on market prices and following up with your teams to ensure implementation and coordination.
1. Stay Up-to-Date on Pricing Changes and Market Dynamics
To understand the factors influencing pricing, it’s important to follow trends in the global economy. Tracking price fluctuations is one way to start lowering your costs. Understanding supply and demand, as well as seasonality, is another; it’s essential for every product in your pipeline. It’s also worth tracking some specific ingredients even more closely. For example, the price of meat can vary widely depending on the type of protein and the specific month. So, while you may serve filet mignon year-round, knowing when those higher costs kick in should prompt you to place a large order, adjust your menu pricing or vary the portion size to maintain profitability.
2. Consider Alternate Brands and Suppliers
While a strong relationship with your suppliers is critical, never be shy about making changes to the products you currently use— rotating in new items can quickly and dramatically reduce your costs. Of course, you may have relationships with some suppliers that you don’t want to disrupt. You may also have products that you know your guests love—items too valuable to your operation to consider changing. Identifying other opportunities; alternate suppliers may offer more benefits, better products and lower costs.
3. Carefully Plan the Timing of Your Orders
The timing of orders can make an enormous difference in your bottom line. Allowing plenty of lead time for your order can help ensure availability, along with reducing the stress of not having a product available. Talk to your suppliers—they may offer discounts during specific times of the year, due to seasonality or lower demand. Capitalize on that, even if it’s far in advance. If you expect prices to jump on essential products, order them now.
Similarly, try to avoid letting the fiscal month/year drive when you order. The end of the fiscal year often brings an increase in spending to “use up” the budget, then spending again when money becomes available. Instead, be proactive in your planning. Suppliers are more likely to work with you to achieve cost savings if you are proactive. Remember: unexpected hurdles can impact your order— so the earlier you begin the process, the easier it is to jump those hurdles.CLICK HERE TO READ FULL ARTICLE