Event Preview: Hotelier Procurement Summit

Procurement professionals from hotels in the GCC will gather for the second Hotelier Middle East Procurement Summit to discuss the key topics in purchasing and the Middle East supply chain

The Hotelier Middle East Procurement Summit 2014, takes place this month on Tuesday November 4, 2014 at Ritz-Carlton, DIFC, Dubai with more than 100 purchasing managers and suppliers in attendance.

This year’s event will be sponsored by Associate Sponsor A. Ronai, Official Water Sponsor Horeca/ Aqua Panna & San Pellegrino and exhibitors Pulsar Foodstuff Trading/Gourmet Olive Market, Lavazza/Eurocoffee, Ruud Lighting, Unique Precise and Sun & Shades. Procurement professionals will have plenty of opportunities to meet and network with them at the event.

Last year’s inaugural Hotelier Middle East Procurement Summit attracted more than 120 purchasing professionals, with key topics on the agenda business development, e-procurement and value over price.

The day saw an assortment of purchasing experts host a series of panel discussions and workshops on a range of topics such as international best practices, brand standards, people management and digital purchasing systems.

This year’s event will follow a similar format, with topics updated to reflect current trends in purchasing, and some of the issues raised at a recent roundtable conducted at the Hotelier headquarters highlighted.

The pre-event discussion between Bhanu Pratap Singh, director of procurement, Atlantis The Palm, Madhu Gopal, director of procurement, Anantara Hotels & Resorts Abu Dhabi, and Wissam El Cheikh Hassan, managing partner at Al Dar Sweets — all of whom spoke at last year’s event — identified some new, key issues.

These included a call for more efficient and transparent processes as well as collaboration between hoteliers, and the issues encountered between F&B departments and purchasing departments within hotels, when quality and business needs clash. The need for more autonomy for purchasing managers, however, was one of the major topics that came to the fore.

“The purchasing managers in this region don’t have any authority — how are we going to make people understand what we are paid for? Most of these people are not even allowed to question. Instead of being instructed to just go and buy something, we can question this saying ‘so why are we getting it at this rate when we can get this price?’ So that is not there at the moment,” said Gopal.

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At the Procurement Summit on November 4, this topic will be hashed out in the first panel discussion of the day, moderated by El Cheikh Hassan and titled ‘How can we make purchasing more effective?’

The panel will address the pivotal role a purchasing manager plays in a hotel in terms of operations, including his required expertise to source products, manage vendors and contracts, maintain quality, review technical requirements, and ensure costs are within budget, while product or material delivery is always on time. In an industry where the purchasing manager does hold such a crucial role, it is vital that they are seen as a core function.

The first discussion point of the debate will relate to whether senior procurement professionals within hospitality are aware of how they can contribute to their organisation’s strategic goals and justify their importance. The panel will also cover how procurement managers can highlight the value of their roles to management and engage more effectively with the people at the top of the business.

Balancing the requirements of purchasing managers and F&B departments was another topic that arose during the pre-event debate, and this is another topic that will be challenged at the summit.

“Everyone struggles with this and I understand how it happens from a purchasing side; for example chefs think they’re artists and that they’re superior. I can call a client and say ‘Can I come over?’ and he says ‘I’ll see if the chef is available’ and I say ‘look you’re not the chef’s assistant — you are the purchasing manager!’” said El Cheikh at the discussion.

A case study titled ‘The F&B struggle and the best practice approach’ will consider how purchasing managers can come up with a best practice approach to create a clear and transparent supplier selection process that includes blind tastings, competitive bidding, quality checks, performance ratings and benchmarking.

Related to F&B procurement is the issue of contracts, which often do not exist in purchasing processes in this region. Creating a more effective system, for the roundtable attendees, meant a more streamlined approach, with information sharing, benchmarking and contracts highlighted as key issues under the topic.

“There’s a very big gap when it comes to having contracts. I know some hotels that do contracts with suppliers but hardly anybody does it,” commented El Cheikh during the discussion.

Pratap Singh added: “You need to document it so that the supplier knows ‘this is my obligation’ and as a buyer you know ‘this is my obligation and my responsibility’. Without that there’s a sense of insecurity between the buyer and supplier.”

This topic will be debated during the first workshop session of the day on vendor evaluation, feedback and contracts, which will discuss how to go about creating a vendor evaluation system and contract to deliver the best value for your hotel.

The other workshop choice of the first session will be ‘Responsible procurement’ which will help delegates to understand principles of procuring in a sustainable way, including the technique of life cycle costing, which establishes the total costs of purchasing a product or service, from ‘cradle to grave’, by asking questions relating to each stage of its life cycle.

This workshop will link nicely to the second panel discussion of the morning: ‘Business ethics and best practice in purchasing’, with panellists Ajaz Wani, director of procurement — hospitality, Damac Hotels Management LLC, Jean Manuel, purchasing manager at Fairmont Dubai, and Asif Kayani, director of purchasing, Four Seasons Resort Dubai at Jumeirah Beach, set to open this month.

The panel will look into how purchasing departments can maintain best business practices and an element of transparency in the process of selecting suppliers.

Following the lunch break, El Cheikh Hassan will make a presentation titled ‘Effective supplier relationship management’, during which he will explain, from a supplier’s point of view, how purchasing managers can improve their communication systems to create smoother transactions throughout the entire supply chain process.

The final panel discussion of the day will look at whether integrating finance and procurement processes is the future for hotel procurement.

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While the two fields have always been closely related functions, top performing businesses have found that procurement and finance are increasingly sharing responsibility for both cost and risk reduction when it comes to reducing expenditures, cutting transaction costs, mitigating potential liabilities and identifying creative ways to prop up the bottom line despite the gloomy economy.

To round off the day, there will be two final workshop sessions on measuring purchasing performance and managing internal stakeholder relationships, with top tips for purchasing managers on how to make sure they get noticed for the vital work they do.

Look out for the event review of the Hotelier Middle East Procurement Summit in our December issue.

ESSENTIAL INFORMATION

Date: November 4, 2014
Venue: Ritz-Carlton DIFC
To sponsor next year’s event: Charlotte.Ringrose@itp.com
To speak at next year’s event: Louby.Maktari@itp.com