Procurement is the process of sourcing and purchasing goods from third-party vendors or suppliers. Procuring a space includes preliminary conversations with clients regarding budget, timeline and the project’s operational requirements. At Premier, for example, the procurement team works closely with the design team to determine the specific requirements for the project and develop a specification package. From there, the process of issuing purchase orders begins.
With today’s ongoing supply chain issues, there is a greater need than ever before for innovative logistics management solutions. This is why partnering with a procurement team that delivers established partners and strategic alliances is vital. When a solid relationship is built, vendors prioritize deliveries and provide better prices reflected in final costs. Our intimacy with the brands and the overall demands of the industry allows us to deliver value engineering and cost avoidance efficiencies that are unmatched. Executing hospitality procurement right requires careful management of the relationship between the brands, suppliers and general contractors in concert to exceed the expectations of ownership. Here are a few things to keep in mind:
Value engineering and cost avoidance
When it comes to value engineering, bench strength in procurement must work hand-in-hand with the internal design and architecture teams to strike the right balance between quality and cost for any customer tier. Value engineering is a continuous process, and a structured approach to its application on every project, such as after-project best practice reviews, allows us to incorporate brand-specific opportunities for improvement.
On the other hand, discretely managed projects have a smaller initial budget scope, which, although appealing at project inception, belies the actual completion cost variance tied to unforeseen delays. Hotel brands are heavily involved in supplier selection, and quality and experience in working with the brands are paramount to adapting to supply chain shocks dynamically. Our procurement and project management teams work in tandem to address disruptions in real-time, and we have supplier relationship networks that allow us to creatively problem-solve.
The change in the procurement process and solving for procurement challenges
Because of the ongoing supply chain and manufacturing issues over the last two years, the procurement process has significantly changed. Today, the cycle now requires additional planning, negotiation and management. Doing so will ensure that sufficient oversight is given to every aspect of the supply chain process, from execution to manufacturing, shipping, customs clearance and delivery.
Procurement challenges are not solved by procurement alone but by problem-solving and close working relationships with all stakeholders. Product delays may require real-time re-specification of key requirements to meet ongoing critical milestones for construction and delivery. Our integrated service offering here is very beneficial, but more critical are cultivating and maintaining relationships with suppliers who have a demonstrated track record of agility.
What products are clients looking for?
The pandemic has been a sea change for the hospitality industry, the ramifications of which are still being analyzed and understood. Remote work has driven demand for more in-house amenities at residential properties. Owners are open to adaptive-reuse projects repurposing low occupancy office space. The bleisure sector, or the combination of business and leisure travel made possible by technology and flexible work arrangements, has seen massive growth which means the industry is undergoing the most significant changes in decades. The increase in this sector means there are more non-standard design and product requirements to address. The same visitor may need professional amenities during the first half of their visit, then look for leisure options during the second half. These changes are also a great opportunity for the industry, and for those who are the most agile in their adaptation to changing client expectations.
There remains, however, a focus on the inclusion of traditional FF&E products within hotels. These include the usual items you will always see at hotels like headboards, mirrors, chairs, carpets, artwork, lighting fixtures and outdoor furniture for pool areas. The ability to leverage a deep bench of strategic FF&E and logistics suppliers is crucial here to ensure on-time delivery for our customers.
As an established operations executive with more than 20 years of experience managing multi-disciplinary business teams globally, Morrell serves as an integral part of Premier’s growth as a leading customer-focused organization servicing industries including hospitality, multifamily and student housing. Morrell oversees overall corporate operations for Premier, develops and manages business plans and ensures collaboration between the operations and business development teams. Morrell is also responsible for facilitating effective recruiting, onboarding, professional development and performance management.
This is a contributed piece to InspireDesign, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.
Tags: Expert Insight, Paul Morrell, Premier, Procurement
