Transformation of Hospitality Procurement

The hospitality industry is undergoing rapid transformation, and procurement is evolving along with it. Procurement teams today are taking a strategic, data-driven approach to build sustainable supply chains and optimize spending. In 2024, procurement focuses on much more than just cost-cutting. Teams now consider a supplier's impact on the environment and society. They aim to partner with vendors that share their values of ethical and eco-friendly practices. Technology and data analytics have become indispensable tools for procurement. Spend analysis software provides visibility into expenses and helps identify opportunities for improvement. Procurement platforms automate and streamline the full purchasing process. The role of procurement has transformed from a back-office function into a strategic driver of success. By leveraging data and technology, procurement teams in 2024 will continue to innovate and push the hospitality industry into a sustainable future. The future of hospitality procurement is bright!

As we move into the next decade, here are three trends procurement teams should prepare for:

Increased focus on supplier diversity. Hospitality companies will come under more pressure to build supplier networks that include businesses owned by women and minorities. Procurement will need to seek out and partner with diverse vendors that meet their needs.

Greater supply chain transparency. Guests and stakeholders will demand more transparency into how and where products are sourced. This means procurement must implement tools to map out supply chains, monitor social and environmental impacts, and verify suppliers' claims.

Emerging technologies for automation. Technologies like artificial intelligence, internet of things, and blockchain will disrupt the procurement process. Those who adopt these tools early and harness them effectively will gain a competitive advantage through improved efficiency, reduced costs, and better decision making.

By anticipating these trends, keeping up with technological advancements, and continuously developing new strategies, procurement professionals can help their companies thrive in the next phase of the hospitality revolution.

For procurement teams to capitalize on these trends, they will need to invest in their own capabilities as well. Procurement professionals will need to:

• Hone their negotiation and relationship building skills to form effective partnerships with diverse and sustainable suppliers.
• Learn how to leverage new technologies to automate tasks, gain real-time insights, and make data-driven decisions.
• Stay up to date on industry developments through continued education, conferences, and networking.
• Advocate for procurement's role as a strategic business partner within their organizations.

By continuously improving and adapting, procurement can evolve from an order-placing function into a value-creating center that helps companies achieve their goals for growth, sustainability and social impact. The future looks bright for those who embrace change and seek opportunities for innovation.

For procurement teams to truly thrive in this new era, they must cultivate a culture of innovation within their own functions. This means:

• Encouraging creativity and idea generation from all team members
• Experimenting with new tools, processes and strategies on a small scale
• Learning from failures as well as successes
• Motivating staff through clear communication of vision, goals and progress
• Rewarding and recognizing innovative ideas that improve performance

In addition to developing new capabilities, procurement teams must also foster strong relationships with their internal customers - the departments they support through supplying goods and services. This involves:

• Regular communication and collaboration to understand their strategic priorities and pain points
• Developing partnerships to co-create solutions that help them achieve their objectives
• Providing value-added insights and recommendations based on market knowledge

By innovating within and partnering proactively with the rest of the organization, procurement can become a driver of competitive advantage for hospitality companies. Those who embrace this strategic, value-creating role will be best equipped to navigate the changes and capture the opportunities that the next few years will bring.