Supply chain network assignment on hotel in Naran

1. SUPPLY CHAIN MANAGEMENT
“NARAN HOTEL”
Sir AHMED HASSAN
ASIM MEHMOOD, M. ANEEQ QURESHI, NASIR KHAN, UMAIR ALI BUTT, ZAKA UL
HASAN
30-Oct-15

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Contents
Introduction..................................................................................................................................... 3
Flows of Supply Chain:.................................................................................................................... 3
Material flow................................................................................................................................ 3
Information flow .......................................................................................................................... 3
New innovation............................................................................................................................ 4
Finance flow................................................................................................................................. 4
Extent of Vertical Integration.......................................................................................................... 4
Backward integration................................................................................................................... 4
Framework of Structuring Drivers .................................................................................................. 5
Competitive Strategy.................................................................................................................... 6
Supply Chain Performance .......................................................................................................... 6
Efficiency:.................................................................................................................................... 6
Responsiveness:............................................................................................................................ 6
Supply Chain Drivers ...................................................................................................................... 7
Logistical Drivers......................................................................................................................... 7
Facilities................................................................................................................................... 7
Inventory.................................................................................................................................. 7
Transportation......................................................................................................................... 7
Cross-Functional Drivers............................................................................................................. 8
Information .............................................................................................................................. 8
Sourcing ................................................................................................................................... 8
Components of Facilities Decision ............................................................................................ 8
Level of product availability..................................................................................................... 8
Inventory RelatedMetrics ............................................................................................................... 9
Average safety inventory.............................................................................................................. 9
Seasonal Inventory....................................................................................................................... 9
Components of Information Decision........................................................................................... 9
Forecasting and aggregate planning............................................................................................. 9
Enable Technologies................................................................................................................... 10
Phase - 1......................................................................................................................................... 10
Social media............................................................................................................................... 10
Smartphone................................................................................................................................ 10
Phase - 2......................................................................................................................................... 10
Smart appliances........................................................................................................................ 10

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Phase - 3......................................................................................................................................... 11
Online booking systems.............................................................................................................. 11
Electronic point ofsale (EPOS).................................................................................................. 11
Phase - 4......................................................................................................................................... 11
Marketing automation............................................................................................................... 11
Components of Sourcing Decision.................................................................................................. 11
Outsourcing ............................................................................................................................... 11
Supplier Selection & Evaluation ................................................................................................ 12
Procurement.............................................................................................................................. 12
Components of Pricing Decision................................................................................................. 12
Supplier evaluation and selection:.................................................................................................. 12
Recognize need for supplier selection:........................................................................................ 12
Identify key sourcing requirements:........................................................................................... 13
Sourcing strategy:...................................................................................................................... 13
Identify Potential supply source:................................................................................................ 13
Limit supplier in selection pool:................................................................................................. 13
Methods ofsupplier evaluation and selection:............................................................................ 14
Selectsupplier and reach agreement:......................................................................................... 14
Management and Employee capabilities:................................................................................... 14
What Good suppliers does: ........................................................................................................ 15

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Introduction
In today’s changing business environment, there is an increased focus on delivering value to the
customer at the cheapest possible costs. One area of the hotel industry that is usually left out in
cost cutting efforts is its logistics and supply chain operations. A well-established logistics and
supply chain management system can help in sustainable competitive advantage.
Manage and operate hotel properties, we should focus on several aspects such as logistics
management, inventory management, information technology, procurement and distribution, lean
supply chain practices.
Customer orders electronically which help to save costs. For example, information technology
has changed the manner in which businesses interact with suppliers and customers. To look
forward we have introduced new way of customer’s ease. For providing them the tablets in each
rooms and Android apps to book rooms at any time through their android devices.
Flows of Supply Chain:
Material flow
The basic requirement for food and beverages need daily. The room cleaning service
equipment’s and products require. The supplier is located in Balakot region. The proposal for
products require prepare by the manager of hotel and he forwards to the MD for approval of
requirement of products and then the proposal forward to the suppliers in city. The major three
suppliers are in city; prepare their quotations and send the filled quotation at their best prices in 3
days. All the materials supplied by the suppliers at the hotel. The quotation has transportation
charges included.
Purchasing process of hotel, including guest rooms and corridors, lobbies, restaurant, laundries,
administrative area, back-of-house, office equipment and interior signage.
Information flow
Three people are working for the forecasting of the project. Finance manager, owner and
marketing manager. Our whole line of products is divided into four segments restaurants, rooms,
transportation & guide and tent services.

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New innovation
We are going to install Tablets and develop Android & Computer application (Windows) for our
hotel that will facilitate the customers in best possible way. Tablets will be installed in every
room and in kitchen and each tablet will have pre-installed application from play store. Also, app
could be downloadable from play store with the limited feature of room booking and the same
application would be install in hotel room tablets that would have more features like catalogue of
food, room services and visiting location (tourist destinies). The application with in the hotel
tablets would have login function of hotel through which each customer can place an order for
their meal, room services and their chosen destiny for visit. The meal order which will be given
by the customers will be display on the tablet in kitchen. So, that chef can prepare meal
according to the customers’ requirements and room service could deliver.
The computer application will sync all the data from hotel tablets and the app that would be
install in user android device for pre-room booking. The computer would be at reception so that
receptionist could arrange and make bills for the visitors. The software in computer will also be
syncing same time in the server for backup. The financial record of the hotel business would be
accessible only by the manager and owner.
Finance flow
The manager of hotel provides all the financial report to MD at the end of each month. The
purchasing of materials and their bills attached at the report. The limited amount is available at
the hotel as petty cash for immediate purchasing. The large purchasing requires approval from
MD.
Extent of Vertical Integration
Backward integration
Merged with the several tourism companies those are providing tourist on massive level and the
business has links with the airlines and hotels for providing the valuable customers.

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Framework of Structuring Drivers
Efficiency Responsiveness
SupplyChain Structure
Logistical
Drivers
Cross-
Functional
Drivers
Facilities
Information Sourcing Pricing
Competitive Strategy
Supply Chain Strategy
Inventory Transportation

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Competitive Strategy
The hotel management is working on to make them best in the market. The management has a
strategy implement the Tablet and App infrastructure throughput the internet and give the
customize features to the tourists. None of the hotel is that market is providing such a
technological advancement. The hotel management is thinking to implement little technological
advancement in the future but limited customer’s knowledge about the techs is the obstacle for
facilitating in the future.
Supply Chain Performance
Company’s supply chain achieves the balance between responsiveness & efficiency that best
meets the needs of the company competitive strategy.
Efficiency:
An efficient supply chain can enclose its suppliers, manufacturers and dealers to manage orders
and processing to meet a stable and predictable demand at a lower cost.
The technology which the moon rise is going to implement surely effect the business process and
the efficiency of the technology would be directly proportional to the success of business. The
main function of the technology is by providing the accessibility to visitors at their best in ease.
The service availability at any level would be considered at priority level.
Responsiveness:
Even as the hospitality industry is seeing renewed enthusiasm to travel, the Moon rise hotel
management improves responsiveness in order to maximize travel purchases. Leisure travelers
make up the majority of hospitality website or App visit, this gain in overall satisfaction scores is
an important finding, as visitors reporting positive experience
Responsiveness, which involves interactive elements associated with the booking process such as
calendar functionality, room selection, personal information input. When it comes to prioritizing
App development enhancements, streamlining and optimizing the booking process is the area on
which to focus in order to promote booking.

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Supply Chain Drivers
The major driver of Supply chain performance consists of three logistical drivers & three cross-
functional drivers. Thus, by considering these factors we have detailed these factors to critically
know the influencing factors and know the business and improve the gap where it lies.
Logistical Drivers
Facilities
The physical location of the hotel is main naran. The tourist visit the area can easily find the
hotel. The hotel facilitates it’s all tourists at their best. The valet parking facility and free wifi
hotspot is available at all times.
Inventory
The hotel hospitality business in Naran maximum runs for 7 to 8 months a year. So, the
inventory management system would be active meanwhile time and it will be consider in the
seasonal inventory. As seasonal inventory anticipate predictable increases in demand that occur
at certain times of the year.
The entire system has the computer application. The inventory management system is referred to
the system application where all the orders are placed pre-transaction. This helps the hotel
management to evaluate the inventory of all or specific products. The raw materials for the
restaurant arranged by the suppliers but they billing requirement arranged from system.
Transportation
Transportation entails moving inventory from point to point in the supply chain. The
transportation is mainly control by the supplier as the area is rough and tough and the danger of
loss in transporting goods s high. The hotel managers pass on that query mainly to the supplier in
which transportation charges are included. This lessens the burden for transpiration of goods
while focusing on other main aspects of the business.

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Cross-Functional Drivers
Information
It is also crucial to daily operations of management information following. Information use for
the following purpose in moon rise hotel:
 Coordinating daily activities related to the functioning of other supply chain drivers:
facility, inventory & transportation
 Forecasting & planning to anticipate& meet demand
 Enabling technology features; as company owner is considering of installing tablets and
development Android application
Sourcing
The hotel has to outsource the suppliers. As the risk in transporting goods is high. Suppliers are
categorized by what they supply. Some have the daily supply contract and some have monthly
delivery contract. Depending on the product perish ability.
The suppliers are located in Balakot area and in Rawalpindi. All were being sorted out by giving
the best price and at negotiating rates. The new system that will be provided by the hotel is in
process. The supplier selection of the new information technology will be provided after the
evaluation of the services they provide and the after sales services.
Components of Facilities Decision
Currently the hotel provides its visitors free Wi-Fi hotspot, laundry service, transportation
arrangement for visiting areas and valet parking. The new system planning will require little time
and will start in the next season. This will affect the visitors mind surely in the positive manner.
As the strategic point of considering the availability of product facilitation will provide best
communication and accessibility.
Level of product availability
The natural resource is immense in that area. Especially trout fish which is even highly
demanding by the tourists. The fish catching is cheap, needs little expertise. The price of the fish
is 3500 PKR and it is available at all times. The hotel manager strictly views the inventory

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management system and manages all the products with their little abundance. So, when the
customers’ demands it could be available as Table ready meal.
Inventory RelatedMetrics
Average safety inventory
Stock held by the hotel management in excess of its requirement for the lead time. The food
items and wood for burning are always in excess quantity. So that customers cannot get any
problem at any time.
Seasonal Inventory
The inventory management system would be active meanwhile time and it will be consider in the
seasonal inventory. As seasonal inventory anticipate predictable increases in demand that occur
at certain times of the year.
The entire system has the computer application. The inventory management system is referred to
the system application where all the orders are placed pre-transaction. This helps the hotel
management to evaluate the inventory of all or specific products. The raw materials for the
restaurant arranged by the suppliers but they billing requirement arranged from system.
Components of Information Decision
To interact with the customers and suppliers company has created website. Tourists can take full
guide map for northern areas and can contact to hotel management for management of their trip
plan. The team assist every customer. Even for the product buying company place it’s tender
online and on newspaper and all the suppliers send their quotations via email. The further
advancement is encouraging by the hotel owner and the team for development is working on the
idea what should be considering at first.
Forecasting and aggregate planning
Our official forecast is based on the result of current year and previous year sales record and also
the PTDC tourist visit locations In Pakistan gives the detail record on which we predicted the
10% improvement in next year of tourist visit which directly affect the business revenue. The
marketing manager is engage in online activities of hotel web and Facebook promotions. The

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daily orders which hotel receive are followed closely and are used as a basis for logistic
projections.
Enable Technologies
Information Technology has managed to encompass many aspects of computer technologies
invented in the past couple decades. Considering the technological aspects of today’s world with
the vision of future advancements and providing accessibility to users for getting much more
time for their other life activities. Hotel owner come up with the idea for developing the
emergence of technological software’s and gadgets at single platform of their hotel. Few
products and services already have been implemented and some are in the development phase.
Phase - 1
Social media
Facebook is a popular platform for check-ins and reviews of restaurants and hotels. Attractive
images are usually the most popular type of post, so we already have this opportunity to share
beautiful and interesting photos of food and facilities available at restaurants. The hotel
Facebook page interacts with thousands of people around the world.
Smartphone
Hotel location markup is registered with google maps and bing maps to facilitate the tourist and
can find the hotel location easily. This feature can also assist them to Check in on mobile apps,
check maps and make extra requests.
Phase - 2
Smart appliances
Lighting, temperature, blinds, alarms, TV, radio and room service will all be controlled from a
single tablet device, or from a single app that guests can download and login to from their own
device.

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Phase - 3
Online booking systems
As by looking the current hotel industry with the high ranking have Online bookings which is
widely spread in the hotel industry, with many restaurants also beginning to accept them as
their popularity increases. This makes essential to have an online booking service, which also
requires a well-designed, mobile-friendly website and mobile applications with a simple
interface. Taking into consideration the hotel management has decided to develop App and
Tablets installation in every room.
Electronic point of sale (EPOS)
Introducing in next year Customer relationship management (CRM), inventory management,
information on capacity, reservations, stock, transportation facility and more are accessible at the
touch of a button. This affords greater mobility and adds another level of convenience for the
customer and for the hotel.
Phase - 4
Marketing automation
This tool will allow hotel to send personalized emails to customers and prospects based on their
activities and personal information. This would boost brand name of the hotel and effectively
improve the customers’ interaction with the place.
Components of Sourcing Decision
Outsourcing
In outsourcing hotel will outsource few business functions such as laundry service, fisheries
transport, tent and application and website developer for the hotel. Outsourcing provides core
competencies for the hotel. There is differential competitive edge for the hotel owner as none of
the hotels are providing the Android facility in the whole area and it will increased business
flexibility and its response time will improve.

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Supplier Selection& Evaluation
The hotels have already few suppliers for the raw materials but the new development of app and
technological gadgets require. The hotel will prepare RFP for the suppliers in the IT industry to
get RFQ from all. Hotel has already built setup for checking the supplier criteria and evaluate
them under certain standards..
Procurement
Procurement practices are used to focus on how purchasing is done, how the product is received
from suppliers, building relationships with vendors and managing the procurement process by
identifying opportunities and managing internal operations. The importance has been placed on
reducing costs during purchasing which leads to the best costs and value to customers.
Components of Pricing Decision
Pricing and economies of scale
The manager and owner of hotel have meetings fortnight in which they discuss the pricing of
services that hotel is providing and the rates that offer by the setup.
Supplier evaluation and selection:
Supplier evaluation and selection play an important role in any business. The most efficient and
operational supplier are those which can provide those products or services that can fulfil
business requirements. The main Question raised that on what basis any firm can evaluate and
select the supplier.
Recognize need for supplier selection:
First any firm should figure out its requirements and related needs and then focus on which is the
most appropriate suppliers that can fulfill firm’s requirements in best appropriate manner and
how the supplier handle and tackle the situation in complexity. We have select different supplier
for our hotel like for food tablets etc. we have four supplier in which one supplier is going to
supply us tablets with best quality and cost effective then two suppliers for back up or for
emergency and one supplier is an active and responsible for supplying all the food that was

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coming from Balakot to Naran. Then we have a supplier for Rawalpindi who is responsible for
supplying all the woods, room services material and housekeeping materials.
Identify key sourcing requirements:
We will need to fully grasp the requirements which might be important to the purchase and what
those things that customers preferred to have it and how we can select supplier according to his
performance of delivery, quality and cost efficiency. We associate our hotel with different tourist
companies that are our internal customers and they recommend our hotel to the tourists which
are supposed to be our external customers.
Sourcing strategy:
Then we have sourcing strategies in which we have short and long term contracts with our
supplier like we have short term contract with our food suppliers and long term contracts with
our tablet supplier, wood supplier and housekeeping supplier and grocery supplier. Our suppliers
are active and almost every time they deliver products and services in time that we need.
Identify Potential supply source:
Then in identify potential supply sourcing how we recognize our sourcing and suppliers that can
meet our standards in cost, quality and delivery performance. We get our products and services
related to hotel from single and multiple sources. Like we have one supplier for tablets and three
supplier for food in which two are back up suppliers and we source the food from one active
supplier if in emergency our first supplier are failed to deliver products then we source the food
from our back up multiple suppliers to fulfill the requirements. Our supplier for food, grocery,
housekeeping and woods are meeting our standards. They fulfill our desired requirements and
match our conditions related to our hotels in terms of quality deliver and cost. Our suppliers are
supposed to be high capabilities suppliers because their reputation is very good in Naran like we
got the information of these suppliers easily from different hotels that are in Naran.
Limit supplier in selection pool:
In this we have select different suppliers on the basis of their past performance and experiences
and how they can give us less financial risk. We have get all this information that are related to
supplier performance in terms of delivery, cost and services etc. from different hotels that are

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existed in Naran. On the basis of this we select limited suppliers in our list that can fulfill our
requirements in efficient and effective way.
Methods of supplier evaluation and selection:
When we get all the information regarding our suppliers then on the basis of that information we
have make evaluation of our suppliers like in terms of quality ,price , delivery , supplier
capabilities and does supplier have potential to make long term relation, how they can manage
the order in best possible manner and we also evaluate our suppliers from the information that
we have attain from each suppliers related to the products and services, some time we visit to
each suppliers to get the information related to our business supply, we have obtain information
related to that suppliers from different hotels who are associate with them. On the basis of these
things we evaluate our suppliers then select them.
Select supplier and reach agreement:
After getting all the appropriate information of the suppliers who can provide us products and
services in long term and short term or in any emergency situation, we have decided to select
them and have make an agreement according to our requirements like our tablet supplier is from
Rawalpindi because of the low cost and our food supplier and wood supplier which are from
Balakot we have make an agreement with them on the basis of food quality, quantity and lead
time and replenishment time. On this basis we have make a final agreement with our supplier.
Management and Employee capabilities:
We have one manager in our hotel who has done his bachelor in hospitality and he is responsible
to manage all the internal and external issues that are related to our hotel .Then we have different
employees who have done with their high school (F.A).Our manager give training to all the
employees like how to receive the customers, how to greet the customers, how to facilitate them
in best possible manner etc. Our hotel main focus is how we can give quick and good service to
our employees in terms of having a food, taking a room on rent etc. Then we have a proper get
up for our employees and manager in the hotel. Our employees are much capable and willing to
fulfill the requirement of the customers in an efficient way.

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What Good suppliers does:
As we already know that every firms focus on efficient supplier who can provide quality
products without any kind of defects and provide quick services according to the particular
needs. Supplier should know about the business products and He should figure out what would
be the financial position of the firm/business either firm are capable to pay the money in time or
not. Then he should show his responsiveness to the firms/business’s need. He should deliver
products or services time to time and reducing the lead time between place order and delivery
time so that he can make his good image and reputation in the market.