Operating over 4,600 Hotels, each franchised and managed by contracts; for Accor Hotels having an efficient procurement system in place is consistently one of their biggest challenges. And, digital has played a key role in the success.
Accor Hotels has also experienced a shift into offering more luxurious experiences for their customers – which has also meant a shift in procurement. Previously working with majority large, global suppliers, now the firms spend on supplies consists of 30% global, 40% national, and 30% regional, showing us how the reliance on local suppliers has increased.
Preliminary operations had to be revised, and a localisation strategy adopted. The company says, “we have a strong desire to work with local producers – such as sourcing fish from the Canadian Coast, rather than importing it from Scotland.”
For over 10 years, Accor has partnered with Birchstreet – an E-Procurement platform. The platform is essential for the management of relationships with suppliers, who supply everything from coffee beans to kilowatts of electricity to make the tea.
Birchstreet offers procure-to-pay solutions (P2P) for businesses and is a marketplace for B2B meetings. The platform works especially well with large hotels – an aspect which is crucial for Accor as some of the hotels in North America have over 1,500 employees. Since localisation is being favoured, the company has changed the vision of reducing its number of suppliers; to now caring about the quality and distance between supplier-buyer.
The platform has an extensive cloud-based catalogue of suppliers, which has led to Birchstreet being named as the P2P leader in the hospitality industry. This was important for Accor at the time of change from global to local/regional suppliers; through Birchstreet, they could identify the suppliers for each product and service which were closest aligned to their needs – high quality, reliability, and efficient cost savings.
Which suppliers are used by the hotel industry can determine the reputation of the business. For example, a Disneyland Hotel in California is currently being sued by a guest after she claims to have been bitten by bed-bugs during her stay. The story has gained wide coverage across the world, and will likely deter many guests from staying at the property. To handle the crisis, Disney managers will have to re-evaluate their cleaning suppliers, as well as laundry, making changes to higher quality service providers.
Through P2P and ERP systems Birchstreet is able to offer Accor a unique, flexible service. Travelers have become ever-more demanding due to their greater access to technology and information about companies – therefore, hotels are under pressure to perform sustainably whilst meeting the high demands.
Author: Larissa Beck
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• Minnock, O. (2018). AccorHotels: transforming procurement for a unique guest experience. [online] Supplychaindigital.com. Available at: https://www.supplychaindigital.com/company/accorhotels-transformingprocurement-unique-guest-experience# [Accessed 17 Nov. 2018].