Supply Chain Management in Hospitality Industry 

The hospitality industry needs capital resources, consumable goods and services, semi-manufactured products, and raw materials to operate various functions. Various input requires coordination and negotiation among all of them. Limited coordination among all of them would result in the form of inefficient utilization of resources and impact the company’s profitability. Today, we’ll discuss supply chain management in hospitality industry; its key elements; advantages, and disadvantages.

Supply Chain Management in Hospitality Industry 

Supply chain management in hospitality industry comprises various activities like production, purchasing, and delivering goods and services to the end customers or tourists. Some of the other activities are as follows;

  • Sourcing of raw material
  • Production and Manufacturing
  • Inventory Evaluation and Storage
  • Transportation
  • Supplier selection
  • Mapping of distribution network
  • Employee scheduling to achieve maximum efficiency

Various activities of SCM should coordinate with each other for the smooth functioning of operations. SCM plays a significant role in the operational efficiency of the hospitality industry. However, it helps hotels and restaurants offer customized services to their guests and customers while offering better coordination and performance for the hotels.

Elements of SCM in Hospitality Industry 

Some of the main elements of supply chain management in hospitality industry are as follows;

Flexible Planning

Entrepreneurs in the hospitality industry know that things could be highly difficult. It is because there are various variables that would jeopardize the operations of the company. However, it is significant to have an SCM plan, but it should be flexible to adapt to changes relevant to the situation and circumstances. It is difficult to develop such a plan but necessary for the smooth running of your business. A flexible plan would help you to deal with complicated SCM, logistics, and hospitality issues.


Sourcing is the process of finding high-quality goods and services at the best price, and it is significant for the growth and success of the hospitality sector. By collaborating with reliable suppliers and vendors, companies could make sure that they have got access to the relevant needed products and services to satisfy the demands of customers.

Inventory Management

Inventory management plays a significant role in the growth and success of the hospitality industry. It allows them to improve customer service, reduce costs, and decrease the wastage of resources.

Distribution & Logistics

Time and efficient delivery of products and services to customers play a key role in the hospitality industry. Optimization of distribution and logistics channels would help companies to make sure that the customers would receive their orders on time without any delays at the most economical price.

Embracing Technology

Employing the latest technology like AI or automated inventory management allows businesses and companies to streamline their SC processes in order to achieve operational efficiency. When it comes to implementing technology to amplify your SC processes, then you should consider employing the following;

  • Integrations
  • Route planning software
  • ERP (enterprise resource planning) system
  • Excel

Various businesses and companies employ different methods like systems, software, or manual processes to perform their SC processes. It would be helpful for the supply chain and logistics operations, but it won’t help you to achieve operational efficiency.

Collaboration & Coordination

Collaboration and coordination among various stakeholders and members of the SC like customers, distributors, and suppliers. It would allow businesses and companies to recognize potential challenges and try to deal with them. However, it results in the form of achieving competitiveness and improved customer service.

Advantages of SCM in Hospitality Industry 

Some of the main advantages and benefits of supply chain management in hospitality industry are as follows;

Motivated Employees

When employees have got higher morale and motivation level, then the company’s retention rate would be higher. Resultantly, when a company has a lower turnover rate, then employee productivity would increase automatically.

Cost Efficiency

SCM helps hotels and restaurants to decrease their cost. Effective management of SC and logistics operations, then it helps them to save a lot of capital resources.

Better Customer Service

When SC processes are running smoothly and efficiently, then it would help hotels and restaurants to provide better customer service. Happy and satisfied customers would recommend your hotel to their social network.

Disadvantages of SCM in Hospitality Industry 

Some of the main disadvantages and challenges to supply chain management in hospitality industry are as follows;


The running expenses of hotels and restaurants are very high, whether it is the cost of daily supplies or utility bill charges. It is difficult for hotels to offer high-quality service with increasing costs and expenses.

Operational Issues

There are different variables and it is difficult to manage all of them. Whether it is maintenance, housekeeping, or front desk; everything should work smoothly and efficiently in order to provide a better customer experience.

Customer Expectation

Tourists and guests are very picky about the hotel and restaurant where they are going to stay. They demand very high-quality customer service, and it puts great pressure on them to keep up with the customer demands.

Traditional Marketing

In order to gain a competitive edge and approach more customers, hotels, and restaurants should employ the latest marketing and promotional strategies. Traditional and conventional marketing methods won’t hotels to achieve their goals and targets.

Conclusion: Supply Chain Management in Hospitality Industry 

After an in-depth study of supply chain management in hospitality industry; we have realized that SCM is highly significant in hotels and restaurants. If you are learning about SCM in hotels and restaurants, then you should keep in mind the abovementioned elements, advantages, and disadvantages.

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