Purchasing Power: Interview with Ashwath Narasimhaiah, purchase manager, JW Marriott Hotel Bengaluru
Purchase managers play a major role in a company’s profits and serving quality and hygienic products to the patrons
What is the most crucial part of purchasing in today’s dynamic market scenario?
Purchase managers are more like consultants for the management since we bring in the best from the market for the hotels. Compared to the previous year, the industry is far more unstable, a trend we see year-on-year due to several reasons. Being a purchase manager, it is very difficult to hold the rates for a particular period. As a five-star property, our priority is to check the quality and maintain hygiene standards, especially when a particular domain needs improvement in terms of hygiene standards while procuring food products. Purchase managers are also responsible for sustainable sourcing, which is mandatory. Considering all the criteria in the current scenario, it is becoming a challenge for us to maintain better pricing systems to sustain and bring in more profits to the management.
Tell us about the vendor compliance systems you have initiated for cost savings.
• Negotiations are not only based on rates but on specifications too. We have started training the team to understand the requirements thoroughly, making it easy to source vendors with better rates and quality.
• We conduct departmental meetings weekly with heads of other departments to discuss the requirements by each of them,which helps us in scrapping unnecessary products/items.
• We have contacts in the market and negotiate directly with manufacturers wherever possible, to get better rates along with guarantee/warranty to avoid the maintenance cost of the equipment.
• We check with other properties/market to justify the rates.
• We plan the requirements based on previous purchases, discuss suggestions from the several departments to negotiate on volume and for better rates, and freeze the rates with vendors for the maximum period, keeping feasibility in mind.
• We conduct analytical surveys to understand the market and the new products, where we can value engineer.
How do you identify high-risk vendors? What are the various measures and procedures introduced to deal with them?
Getting the right vendor on board is very critical and needs to be dealt with systematically. High-risk vendors are identified by the category of products they supply us. The ones supplying fresh meat, dairy products and few perishables items are considered as high-risk vendors; these categories are directly linked to food safety. Before we confirm any contract/purchase order, we put these high-risk vendors through a process:
1. Company background check.
2. Vendor analysis/evaluation.
3. Annual turnover.
4. Visit vendor premises/vendor audit/third party audit.
5. Collect related licenses/certificates.
How has the domain of purchase changed over the years? Do purchase managers need to develop certain skills today?
Technology plays a major role in procurement. Sourcing new vendors and reaching out to the right source has become easy. Purchase managers play a major role in a company’s profits and serving quality and hygienic products to the patrons. They need to be updated and equipped based on market conditions. To achieve a better price or the right price, analytical skills are a must. The success of a purchase manager depends on his score on vendor development and vendor relation.
How do you train your team to follow procedures for smooth coordination in supply chain management?
Every team member is trained on LSOP, roles and responsibility at the time of joining. Monthly training calendars are prepared for subjects related to procurement like Market Survey, Vendor Audit and Sourcing Right Vendor. The agenda of training the team is to get the right products at the right time and price.
Do you use any kind of app or technology for the purchases?
We do not use any app or technology in purchase process other than the Birch street software.