Contemporary Economy (Dec 2016)
PROCUREMENT IN THE SUPPLY CHAIN: AN ELEMENT OF HOTEL PRODUCT COMPETITIVENESS
Abstract
Background: Only recently has the supply chain in tourism, the hotel industry included, started to be explored. The reason for is the knowledge that the supply chain can contribute to enhancing the quality, and lowering the cost, of a hotel product. Driven by strong competition, hotel companies continuously seek to improve the organization of their business processes. Input that depends on procurement determines the features of the final product. The question is, do hotel companies apply the principles of a supply chain when organizing procurement and, if so, to what extent? To which degree, if any, is it possible to define a universal concept of logistics procurement, or does a specific hotel company represent the dominant criterion in the application of the supply-chain principle? Due to the complexity of hotel business processes and because of the role of procurement in the entire production process, research will be limited to the aforementioned segment. The study, the results of which are reported in this paper, has a preliminary character and, therefore, covers a small number of hotels, each with different characteristics and located in different destinations. The aim was to learn whether essentially different hotel enterprises have a common basis for the procurement supply process, as this would indicate the possibility of designing a common model. Methods: The methods of definition, induction, and deduction were used in defining the concept and basic features of the supply chain of hotels. Hotel business processes were studied by the methods of analysis and synthesis. The interview method was used to study the business procurement process from the perspective of hotel management. Results: The study showed that hotels use certain principles of supply chain in organizing their procurement processes. It also indicated the inseparability of the principles of the supply chain, procurement and the organization of a company: the appropriate organization is essential for the application of the supply-chain principles, but it can also have the opposite effect. The principles of supply chain organization and management are present in all investigated hotels, but to varying degrees. While obtaining the lowest price is singled out as the primary goal of procurement, the need to take into account other elements, such as the quality of procurement, products and services, is also emphasized because this makes it possible to create a hotel product that guests will be satisfied with. Conclusion: The presence of supply-chain elements in hotel procurement correlates with the size of the hotel enterprise, but not with the type of hotel or its location (type of tourist destination). The organizational basis of stand-alone hotels is better suited for the development of supply chains. Their less-formal business organization and decentralized procurement provide a suitable environment for focusing on and effectively managing the business process to enhance product quality. In contrast, centralized procurement embedded in the more rigid organization of hotel enterprises contains a number of barriers that go against the supply chain concept. Partly for this reason, the primary goal of hotel enterprises is price, while quality is only a secondary goal. Networked supply-chain structures are present in both cases, and high on the list of procurement goals is the importance of building sound relationships with prominent suppliers. Also important is that procurement organized in this way focuses on the long term; the supplier market and procurement terms are analyzed periodically and, if necessary, changes are made regarding suppliers and supplier relationships.
