The hospitality industry has witnessed a major evolution of the vendors in the last decade. With the increase in investments and meager profits, the role of the purchase managers has further increased into becoming a trusted partner of their owners By Akshay Kumar
The Power of Purchase 2015 organised by the Hospitality Purchasing Managers Forum (HPMF), saw well-known purchase managers from the hospitality industry elaborate on the role of procurement, its growth, present and future trends. The discussion was moderated by Reema Lokesh, editor, Food & Hospitality World and the esteemed panel members were Anthony Barretto, purchase manager, Palladium Hotel; Harvey Rodrigues, director purchase, Meluha The Fern; Mukund Vichare, director procurement, JSM Corporation; Mahendra Shinde, purchase manager, The Resort Madh- Marve and Kaustubh Jadhav from KA Hospitality. The session focused on the way forward for the upcoming year.
Speaking about HPMF’s association with the Food Hospitality World show Nitin Shankar Nagrale, general secretary, HPMF said, “In 2011 we started the concept of Power of Purchase and since then we are partners with Food Hospitality World. We are proud to be associated with FHW as this show gives us a great platform.”
Evolution of vendors
The hospitality business has seen a major transformation in the last decade, every segment has evolved with the growing competition. The vendors who once used to focus only on the high-end customers, have started understanding the importance of mid scale and small scale players in the market.
Rodrigues commented, “Today the hotels plan well in advance and chalk out their requirements before hand. Also the big suppliers have diversified their network throughout all regions in the country, which ensures same quality of the products. With giant companies coming into play, suppliers are evolving and becoming more competitive. This gives a upper hand to all the purchase managers.”
The functioning of a resort property is very different from that of a five-star hotel, Shinde spoke about the difference in the vendors approach, “Our business prospect is totally different from that of a five-star hotel. I think the power of purchase managers have increased from the past. Earlier the vendors used to give excellent service to the star category hotels and inferior service to small hotels. But currently, the mindset of the vendors have changed and they cater to clients from all the segments equally which is one of the change I have noticed in the years.”
Palladium recently went through a change of management, speaking about the involvement of the owners in such a situation, Barretto says, “In our case the owners have given a free hand for all operational purchases. There is no direct interference in the quality. The scenario has changed a lot from the past where we had to source the market locally, as international markets had certain restrictions. But presently it has changed a lot and the challenges which we used to face have reduced.”
Working for an international company gives an upper hand, as there is a focused approach from the vendors side. Vichare claims, “Companies like us dictate terms when it comes to quality as we have an international standard of brands. The only challenge which I see is the uniformity of quality supply that is not seen pan India . There are only a few vendors who fulfill our criteria.”
Jadhav added, “Around 90 per cent of the products we use are imported, but the issue is we do not get suppliers in every city. The main challenge is to find a vendor who provides quality products at the right price.”
Road ahead for 2015
Quality is most of the times neglected by the purchase managers to maintain the balance of expenses. With the change in the game plan, the current trend is to have a larger perspective and look for long term investments in 2015.
Jadhav explains, “Striking the right cord between chef and purchase managers is very important as we come to know what the customers want. Procurement has to evolve in terms of analysis and planning with a long term vision. Most companies focus on reducing cost rather than long term investments.”
Rodrigues says, “With the growing number of brands, we have also started selecting standard brands across all our hotels so as to create an identity.”
Purchase managers are also looking at nurturing talents in their field as they have witnessed a high attrition rate. Jadhav fears, “The biggest challenge in the way forward is developing and nurturing talent. People think that the work of a purchase manager is a back office job and with the rapid growth in the hospitality segment, there is a high attrition rate. The only solution is to conduct training sessions to develop the soft skills. Also one should look out for new global products as a purchase manager, which is the way forward.”
Shinde added, “The perception of procurement has changed over the years. Now, purchase managers are a trusted partner of the owners, rather than just another department. We have to guide the other departments to control over the cost.”
Vichare thinks that with the rising investments and the reduce in profits, smart purchasing is the only way forward. He perceives more involvement of purchase managers in the future. He also looks at a trend of organic products, which has been a bit expensive in the past, but in future if the prices fall he will surely look into organic sourcing of the products directly from the farmers.
