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Power of Purchase: Technology in procurement

Procurement professionals of leading hotels and food services brands in Bengaluru met at the 37th edition of EF&H Expo to voice their views on how technology can help turn the otherwise complex operation of procurement into a simpler one By EFH Staff

The second day of the EF&H Expo Bengaluru 2019 saw on the dais procurement experts including Bhaskar NP, purchase manager, The Den Bangalore; Shreya Merchant, manager – strategy & planning, Elior India; A Devraj, purchase manager, Radisson Blu Atria; Mahesh P Naik, purchase manager, La Marvella – A Sarovar Premier Hotel, Bengaluru; Sukumar, asst manager – purchase, Aloft Bengaluru Whitefield and Akshay Singh Tawar, purchase manager – shared services, ITC Hotels, Bengaluru, discussing on how plugging technology into procurement processes at their hotels and commercial kitchens, has reduced a multitude of challenges faced by them in the traditional manual process of purchase.

A Devraj

Technology has really helped procurement processes, especially in personalising the materials as per the hotel’s needs vis a vis the days when hotels settled for what vendors had to offer, echoed the panelists. “Earlier we used to procure through vendors and quality often was an issue. However, now through a single window channel, we have access to a variety of different prices and quality commodities to choose from at our fingertips,” said Naik.

Merchant said that at Elior, tech plays a very important role in the supply chain process as the supply chain in the country still r

Akshay Singh Tawar

emains unorganised in this sector. “What we are doing is bringing consolidators or organisers in the supply chain market. We bring in technology from a logistics optimisation perspective and warehouse management perspective. We are also able to capture data from a supply chain at all points of the supply chain and they provide analytics to us after which we are able to connect with the supply chain right from consumption preferences of the customers; link it in our production and accordingly create our supply chain. The process has helped us a lot in capturing data which is extremely essential for us to provide real-time insights and help our decision analytics,” she explained.

Mahesh P Naik

Decoding the details about the application of technology in ITC, Tawar said that they have installed ERP systems to track data like consumption, prices and vendors all across the ITC Hotels Group. “We have removed a lot of manual tasks because there are a lot of discrepancies associated with it. As it is commonly said, ‘To err is human’, is applicable everywhere including procurement. Technology has helped us a lot,” he added. Devraj said that with the hospitality industry leading its way in usage of technology, procurement too has seen its own advantages with the addition of technology to it.

N P Bhaskar

Bhaskar said that there was a lot of manual process in procurement earlier which created errors and unpleasant surprises. Now with technology, the process has become smooth. “We have a complete end to end technology in our procurement process, for example – when we can now communicate with our vendors, instead of them visiting the hotel in person which was time-consuming; we have a virtual conference to make them understand about our requirements. This process also eradicates favouritism,” he stated.

Shreya Merchant

Sukumar said that traditionally they used to check the physical product first and then go in to make a decision, but with technology coming into play, virtual decisions have eased the procurement processes including shortlisting essentials and quality products from a range of similar products in a shorter time frame.

Human intervention still a requirement
Although tech has played a significant role in purchase department of hotels, the panelists opined that technology helps to the extent of shortlisting and clearing the noise, but the eye for detail in selection is only achieved by a human. “Human intervention is required for the selection of goods. At the time of sampling and inspection of goods, it needs to be human. Technology can be used to shortlist a lot of vendors and make the purchase decisions,” said Tawar.

Sukumar

Merchant too agreed that technology is needed to shortlist various aspects. “For us at Elior, we have a farm to fork model, so we reinsure working with people who give us information about it on a real-time basis,” she said. The panelists also spoke about the advantages and disadvantages associated with both centralised and local procurement of materials. Tawar explained that there are different models for procurement, like in the case of common things procured all across the hotel group like linens, etc, centralised procurement is good as it has corporate negotiations, corporate centralised quality testing, but local procurement is essential too. Agreeing with Tawar, Naik said in centralised purchase channel, cost-cutting is achieved.
Devraj said that since they have three hotels under the RHG brand, centralised procurement becomes advantageous to save on the costs.
Bhaskar opined that standardisation is something that guests often look for at a hotel of a particular brand in different locations, hence centralised procurement of certain products is required. “For other local requirements, local tie-ups can be done to further reduce costs in the long run,” he felt.

Bengaluru’s procurement challenges
Considering the Bengaluru market, the panelists nodded to Merchant’s point that last mile connectivity is extremely expensive and unreliable which in turn affects their productivity.
Tawar expressed that pricing is a bit challenging in Bengaluru as compared to Mumbai and Delhi. “In Mumbai, the logistics is not that expensive and is hassle-free. Apart from that pricing is a very big challenge,” he added.
Devraj too mentioned that price is a challenge in Bengaluru and that they depend on peripheral markets for procurement of materials.
Bhaskar reiterated that additional costs of manpower and last mile connectivity add to the procurement challenges in Bengaluru.
Suggesting a way out to save costs, Sukumar said that they invest in seasonal procurement to save on the higher prices of products. To this Tawar felt that tendering being a time-consuming process, it should be the first thing which should be made technologically active followed by logistics.
Devraj suggested that transportation should be brought in a single window format which would maintain transparency and hence save on costs.
Considering the hardships faced by the vendors, Bhaskar said, “User-friendly apps for the vendor’s feasibility should be brought into play hence making it easy for them to better understand our needs.”
Merchant stated that if technology could help forecast inflation rates, seasonalities, etc, that could really help the procurement process to become more efficient.

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