by Alastair Roy, ARO Procurement
It is important for each of us, personally and within the context of our businesses, to reflect on just how much has changed in the past four months. However, it is equally and perhaps more important to leave it at that because the landscape before us is inexorably altered and rulebooks need to be re-written. It is time to envision a new, future where opportunities will arise and robust procurement practices will be a vital tool in your resilience armoury on the path to recovery.
Build Back Better is a call to action throughout many sectors in our – hopefully – post COVID world. Perhaps that should be Co-COVID because safely co-habiting with it is probably a more realistic expectation until scientific progress provides us with greater protection.
Business owners and executives will have a very clear focus on business continuity right now. Sales are key and customer confidence will have a huge part to play in reforming the foundations of balance sheets.
In addition to sales, well-executed procurement practices can generate savings and efficiencies, which will quickly and positively impact your P&Ls. The aim has to be on getting things done, not necessarily perfectly first time but decisions can be course-corrected and finessed through time.
Routine monthly payments will have been missed, contracts are potentially in breach, and relations with your supplier community may feel strained in some quarters. Accept at this point that nobody has all the answers but we all need each other, the customers and guests will eventually find their way back to our doors and we want to be in the strongest possible position to welcome their return.
Collaborate with your supply chains to seek a more authentic, empathetic and even-handed way of working together. It is more than likely that your suppliers will have been through a similarly traumatic experience and suffered tremendous revenue reductions during the lockdown period. Being upfront and confronting issues early on will make it so much easier to find solutions that work for all parties. Surrender the old ways of doing things and find a way through to transformational growth.
Do
-
Approach suppliers for revised and reduced cost pricing – ASK, ASK and ASK again until you get where you need to be to make the numbers work
-
Read the small print to renegotiate and preferably void onerous contractual terms
-
Seek ways to free up cash held in stock
-
Operate on a Just in Time basis with your suppliers
-
Request extended payment terms
-
Take advantage of all available government funding
-
Awaken your senses of economy and frugality
-
Consolidate your supply chains and aim to be as close to the primary source as possible across all categories
Don’t
-
Compromise on quality
-
Ignore supplier communications
-
Become downhearted and assume that anything and everything is impossible
-
Forget that this time will pass business will improve
Interpersonal skills are paramount in the Hospitality sector at the best of times. Whilst digital e-procurement tools always have a place to help control costs and provide business-critical data to help form decision making, it is vital that the procurement function deploys its soft skills to help navigate businesses through supplier relations to prevent disputes arising and build strong strategic alliances for new and exciting ways of working together.
Buyers and suppliers will always find innovative ways to make a deal work for their organisations and having a ‘Cold Eye’ review of your supply chain by an independent and impartial procurement professional can yield previously untapped savings.
For further information on how Procurement can make your business more resilient in a Co-COVID landscape, please feel free to contact alastair@aroprocurement.com for a complimentary review. This offer is open until 1st August.
Alastair Roy has 25 years experience in Procurement working for Stakis Hotels, Apex Hotels and latterly as Procurement Director for Gleneagles Hotel.