Purchase Essentials: Vijay Gupta of Crowne Plaza Today New Delhi, Okhla shares insights
Striking a balance between consumer demands of qualitative aspirations and price demand is the most crucial part of purchasing
What is the most crucial part of purchasing in today's dynamic market scenario?
As a purchase manager, striking a balance between consumer demands of qualitative aspirations and price demand of the organization is the most crucial part of purchasing. This is only possible if we have good knowledge about the high grade/ quality of raw materials to be procured along with great vendor negotiation and management skills in order to facilitate seamless operations. For example, the procurement of basic food products such as meats, poultry, fruits, vegetables, grains, spices, seafood depends on the weather conditions which cannot be controlled. A purchase manager must be in constant contact with the market to determine not just the pricing and quality but also availability. If the weather diminishes the supply, he should have great product knowledge in order to substitute the product.
What vendor compliance systems did you initiate for cost savings?
It is very important to establish purchasing procedures in the system to avoid various purchasing pitfalls such as panic buying, over or short purchasing, buying by price rather than a combination of quality and price as well as pressure buying. Crowne Plaza Today New Delhi Okhla is a part of IHG Group, hence we get the advantage of cluster contracting resulting in better volumes of supplies at negotiated prices. We have strategically identified suppliers who fulfill the IHG standards of vendor compliances to ensure volume discounts and timely management of the entire process. Tendering management allows vendors to bid for the project, thus helps us in getting better costs. With the growing popularity of concepts such as farmto- table, farm-to-bottle, forage-to-table, local sourcing has become a new trend. People everywhere are looking for a more locally authentic experience, starting with what they eat, leading to an increased scrutiny on the origin and procurement of their food.
How do you identify high risk vendors? What are the various measure and procedures introduced to deal with this?
As per the definition, ‘high risk vendor’ is the one who supplies us with goods and services which cannot be easily replaced and the in the procurement mechanism can lead to revenue loss as well as guest unsatisfaction. We have adequate processes to ensure that our high risk suppliers work to their highest potential and provide us the uninterrupted goods and services. To enforce the compliances, we have a tracking system of all critical checkpoints and certifications before finalizing the commercials and awarding the order/contract to supplier. For example, for food supplies we maintain records such as temperature record, in-house lab test report, rejection report, regular vendor site audits and vendor meets to avoid risk of food spoilage and food poisoning.
How has the domain of purchase changed over the years? Do the purchase managers have to develop certain skills today?
In the hotel industry, the expectation from the purchase professionals is to implement a strategic sourcing initiative for supplies and equipments with respect to operations, to ensure consistent quality and availability of OS&E products and services needed to run daily operations, to enhance the profitability and to ensure timely availability of high grade material. To achieve these tasks, the purchase manager has to develop certain skills such as commercial leadership competencies, cost & quality analysis, intense knowledge of technical requirements, vendor and team management. He should be able to locate the right suppliers for their products and build strategic, long-term relationships with the suppliers.
How do you train your team to follow procedures for smooth coordination in supply chain management?
Being a part of IHG Group, it is mandate for our team to undergo multiple onsite and online trainings with respect to procurement, food and safety, health and hygiene, vendor coordination and much more in order to educate them and strengthen their base. Regular briefings and open forums are a great way to promote the exchange of innovative ideas as well as challenges. It is essential to train on the functioning of the stores and purchase right from receiving the product to its storage. It is very important to train the team for accurate purchase maintenance record and budgeting in order to assist the finance and operational departments in the monitoring, reporting and controlling of cost of sales in the hotel, including audit and control, financial analysis and reporting, budgeting, forecasting etc.
Do you use any kind of app or technology for purchase? Kindly tell us about the technology in detail.
For institutional purchases, few companies are working on applications as well technology based software wherein supplier and buyer can come together for best procurement solution. This is in its pilot stage now but seems very promising for the coming days. I am actively using digital media groups and communities to be able to connect with multiple purchase managers, vendors and suppliers on PAN India basis for knowledge exchange and sourcing coordination.