Increasing Profits By Cutting Costs On Supply Chain With IDS Next

Can Your Supply Chain Cut Costs And Increase Profits?

Starting to do more with less has become the echo in most conference rooms. Is this possible in hospitality businesses? Let’s explore a frequently ignored method on how automation can make this possible and contribute to reduced costs and increased profits.

The ultimate guest experience has become the goal of the hospitality industry. Therefore, most enterprises focus on front-end operations, striving to provide a seamless journey from check-in to check-out. However, the importance of the back-end functionalities and their ability to contribute to improving hospitality businesses’ overall goals are often ignored.

Supply chains, including procurement, materials, and Inventory management, all play a crucial role in the back-end department of hospitality businesses. According to a recent American Hotel & Lodging Association survey, nearly three in four hotel operators say supply chain disruptions are negatively impacting their business revenue. The more a company can make optimal purchasing decisions and smart inventory management plans, the lower its overheads and wastage leading to higher profits and fewer glitches in service to its guests. Hospitality businesses often face unspoken challenges in the supply chain departments. Some of these challenges are listed below:

Imprecise counts and unreliable inventory information.
Budgets are tied up in unused inventory due to poor overview & control.
Poor knowledge of portioning and costing in food and recipe management.
Multi-outlet inventory challenges (internal orders & transfers).
Difficulty making profit-boosting decisions due to unorganized data.
Excess employee time and effort spent manually planning and managing the various aspects of the hotel supply chain.

Despite the existing challenges, enterprise solution providers have formulated effective measures to mitigate these challenges in the supply chain for hospitality businesses. It has been proven that appropriate supply chain solutions can cut hotel costs by up to 15%. Some detailed benefits of such solutions include:

Improved insights and reports lead to effective decision-making.
Efficient real-time inventory tracking.
Reduction in wastage.
Accurate product costing.
Smooth business flow through automatic procurement procedures and effective data exchange with the partners in the supply chain.
Improved productivity and efficiency of employees working in the department.

Supply Chain Systems, the backbone of the industry, are now becoming an inevitable factor in running seamless operations. Businesses now realize that substantial back-end operations can directly or indirectly impact their success levels. Businesses worldwide are now incorporating such solutions among top strategic options, no wonder, the Inventory Management Software market size crossed USD 3 billion in 2019 and is estimated to grow at a CAGR of over 5% from 2020 to 2026, according to Global Market Insights. Implementing an effective supply chain and material management system in your hotel will lead to effective business operations and thereby increase better profits for your hospitality business.