REVIEWER IN SUPPLY CHAIN MANAGEMENT (MIDTERMS)
DRIVERS AND PARTICIPANTS OF SUPPLY CHAIN MANAGEMENT
The chain must efficiently meet _______________ for products and services in the hospitality industry. The impact of each
__________ and __________ in the supply chain will determine how well they will meet the customers’ demand and how
profitable it will be to the supply chain business (Baluyot, 2022).
Participants in the Supply Chain (Baluyot, 2022)
A supply chain is composed of the ___________ of the hospitality establishment, the __________ itself, their
___________, and sometimes, ____________. The main reason supply chains exist is to supply ________ and __________
based on their demands. Below are the different participants in the hospitality supply chain.
• _________ are the companies that provide raw materials to be used by firms. Examples include farmers, meat, poultry,
and dairy suppliers, furniture makers, and linen providers. They may also convert these raw materials into work-inprogress inventories so that firms can easily convert them into finished goods ready for sale.
• ________ are businesses that store and convert raw materials and work-in-progress inventories into finished goods
ready for sale. They are responsible for using strategies involving establishing prices, product and service offerings, and
comfort to attract customers. In the hospitality industry, these are ________________ and __________ establishments.
• ______________ refer to the agents that act as __________ between customers and firms. These include tour operators
or travel agents who usually buy services from hotels and restaurants and assemble them into tour packages offered and
sold to tourists.
• ___________ refer to the individuals or organizations that purchase and use a firm's product or service. In the hospitality
industry, they are the guests or tourists.
____________ provide goods and services following ____________ (POs) provided by ________ and upon agreed delivery
dates and prices.
______ will process and prepare such goods for sale to third parties or customers.
________ may be communicated to firms from third parties or directly from customers after product or service
consumption.
___________ is essential for firms to determine areas for product and service improvement. Any adjustments on products
and services to address customer needs may also necessitate re-evaluating arrangements with existing suppliers. It is
paramount that information flows both ways so that the expectations for each participant in the supply chain are relayed
correctly.
Major Drivers of Supply Chain (Chowdhurry et al., 2019)
The prime objective of supply chain management is to meet the ______________ with the __________________ of
products within a certain time frame.
Each ________ must be clear to know what needs to be done and met on their part in the supply chain process.
The ___________ are the tools that ensure the advanced performance of the supply chain management effectively and
efficiently to achieve a favorable customer response.
The following are the two (2) major drivers of the hospitality supply chain:
• __________ refers to the accumulated planning, control, and implementation of the effective movement, storage, and
facilitation of goods and services from one dimension to another. It contains the following sub-drivers:
o ______________. In the tourism industry, the destination where accommodation and food and beverage
businesses are located, the cultures of the area, and national policies and regulations are carefully considered.
________ is analyzed to determine the influx of tourist needs and wants, and ___________ is planned to
determine how many products and services can be provided. These tools can help minimize the cost and enhance
the responsiveness to meet the demand.
o __________. The industry must maintain an optimum number of inventories to deliver the required needs of
guests. Carefully considering the types of inventories (________, _________, and ___________) should always be
considered.
o___________. The hospitality industry purchases important inventory and resources from different suppliers,
which are then delivered through different modes that may be owned by them or through third-party suppliers.
__________ may be divided into two (2):


_____________ - the movement of goods and services from the supplier to the hospitality business, such
as the delivery of food products and hotel supplies
___________ - the delivery of goods and services provided by the hospitality business to their customers,
such as offering rental car services, pick-up services, and delivery of food products to customers.
• The ____________ driver determines what will be the performance of the supply chain management since it involves
the teamwork of the following sub-drivers:
o ____________ links the different participants of the hospitality supply chain. For example, the quantity, quality,
and specifications of products needed by a hotel or restaurant must be communicated well to suppliers so these
can be met accordingly.
o ___________ determines the firms’ operation and purchasing of goods and services. It is divided into
______________ (the services to be provided by the hospitality businesses), such as accommodation and food
services, and ______________ (services to be provided by other businesses), including tour guide and guest
transportation services.
o ___________ depends on the quality of services and seasonal demand. If the quality of services provided is high
and it is the peak season, the prices for products and services tend to be high. At the same time, if there is
insufficient demand during the lean season or the quality of service is not on par with the competitors, prices tend
to be low.
o _____________ is the standard of the products and services, determining why a customer will patronize a
hospitality business. A thorough understanding of drivers’ functions and roles will help a hospitality business
remain competitive. It will help a business to profit and focus on the different strategies to maintain or improve
its services.
Aligning the Supply Chain with Business Strategy (Baluyot, 2022)
An organization’s supply chain is an important component of its approach toward achieving its goals. A business’ supply
chain must compete in the same manner as the entire company does. The supply chain cannot be planned separately
from a business’s long-term goals and direction. The following steps align the supply chain with the business strategy:
1._____________________________.
- ______________ should establish concrete, achievable, and measurable target goals and determine how the hospitality
business will differ from competitors. The strategies should prioritize the customer expectations and consider the unique
features, price range, and way of delivery of the products and services to the customers. These strategies should also be
communicated to the business thoroughly and repeatedly to ensure that each employee works toward the same goal.
2. _____________________________________.
A business’s strategic goals must be aligned with how these will be delivered. It involves defining which part of
the supply chain a business should be good at, allowing it to prioritize certain processes. Answering this question will help
a business perform this step: “What part of my core competence falls within the supply chain activity of the business?”
This step is critical in making _______________/_______________decisions for a business. For example, suppose a
restaurant advocates using fresh ingredients since its market is individuals with special dietary requirements. In that case,
its supply chain must be designed where goods are delivered and maintained at their optimum freshness or quality.
3.______________________________. A business should measure its supply chain operations based on its performance
against competitors and its ability to meet its goals, not on common supply chain measures, which most companies may
have used. It should design its performance metrics based on what applies to its operations.
4.____________________________. All supply chain operations should be structured based on the business's strategic
goals. An important consideration is to achieve cost effectiveness along the processes to ensure the business's reliability,
responsiveness, and profitability.
5.____________________. Internal performance reviews and bonus systems must be consistent, wherein there should
be a balance between suppliers' incentives and the business's needs. There should be __________________________
(SOPs) that drive performance but should not negatively impact supply chain objectives. A common failure is when the
sales and marketing team has no incentive to control inventory; they will overdrive the forecast to guarantee availability
and leave the supply chain organization with the excesses.
6.___________________. Some businesses have corporate planning every one (1) to three (3) years, but their supply chain
strategies remain the same for decades. This practice usually results in the business becoming unable to c ombat future
problems. A business must often examine its supply chain strategies as it does with other planning activities. Different
approaches must always be considered so businesses will grow and adapt to situations in the current market.
It is important for supply chains to be aligned with the business strategy since, like consumer preferences that are usually
evolving, they too should be able to adapt to those changes and trends. __________________ with the business strategy
is crucial for businesses to be successful in today’s industry.
SUPPLY CHAIN MANAGEMENT STRATEGY
A hospitality organization's business plans need to include a ______________________ strategy because of the constantly
shifting demands of its customers. Companies must have __________, ____________ supply chains to satisfy customers.
Adopting the right supply chain planning strategy can help businesses reduce costs, improve customer service, and support
their business goals (Envista, 2021).
Development of Supply Chain Strategy (Baluyot, 2022)
A _______________ is a plan that an organization uses to manage the flow of products and services. It includes the
__________ and ___________ processes defining how products and services will be delivered to the customers. The
following factors are to be considered in the development of a supply chain strategy:
• _________________. An effective supply chain strategy should effectively identify the current and potential supply chain
requirements from the customers' viewpoint since they are the buyers of the finished products or services prepared by
hospitality establishments. Businesses may segment their customers based on shared characteristics to understand their
needs, preferences, and buying patterns.
• _______________ refer to the identification of the capacity of the supply chain of the hospitality business to meet
requirements such as inventory management and deadlines for producing goods and services.
•_________________. ________________ allows a business to incorporate the supply chain strategy and sustain
innovative processes and capacities to meet customer demands. A business must be updated with the ______________
that will affect the hospitality industry's production of goods and services and decide how to adapt to meet the market's
future demands.
• _______________ is determining the strengths, weaknesses, opportunities, and threats (SWOT) of the different business
competitors to identify how the business is faring against them.
•_______________ involves identifying internal and external risks that potentially impact the business.
_____________________________ is the process by which organizations take action to _______, ______, and _________
the risks a business faces within the entire supply chain. It includes determining what courses of action should be taken
by the business in case there are some sourcing shortages and delays in producing goods and services.
Hospitality businesses should consider these factors in developing their supply chain strategy to ensure success, as these
help determine what they need to improve in terms of their processes and stand in the industry.
Supply Chain Strategies (Hippold, 2020)
Generic Supply Chain Strategies
The following are some of the generic supply chain strategies that can help a hospitality business be resilient and prevalent
in the competitive service industry:
• _______________ refers to handling the supply variability in a business’ operations. It allows the management to face
challenges without severely impacting the business's operations. The following tactics are identified for better buffer
management:
o ___________ allows the supply chains to function uninterrupted by adding extra time to the delivery schedules.
For example, the usual delivery of raw ingredients in a quick service restaurant is every Tuesday and Thursday,
while the packaging materials are every Wednesday with the same supplier. Suppose there is a high demand, such
as during the holiday season. In that case, the restaurant should coordinate with their supplier should there be a
need to add another schedule to avoid having stockouts on certain days of the operation.
o The _________________ allocates additional inventory needed to produce finished goods in case of sudden
demand. It is usually done for best-sellers, most ordered, or new menu items introduced since the customers'
interests are stimulated and willing to try them to satisfy their curiosity. However, available storage space must
be considered in determining the ______________ (level of inventory maintained to reduce the risk of stockout)
of each type of item.
• _____________ is the supply chain's ability to choose between alternate sources of materials efficiently. A common
reason for ______________ is when the main supplier cannot handle the capacity of the business order, so they would
order from a different supplier to satisfy the demand.
• _____________ is a process focused on reducing the cycle times for creating or delivering finished products by choosing
a supplier near the business. Suppliers near the business may be more _________ since they usually cater to different
businesses. However, they have a __________ when delivering the needed materials for the finished products and
services.
Supply Chain Management Strategies According to Level of Decisions (Nazeri, 2020)
The hospitality supply chain activities are grouped into ____________ (long-term decisions of the company), ___________
(short- and medium-term decisions), and ___________ (day-to-day processes, decision-making, and planning in the supply
chain) levels to create a systematic approach to how each strategy will be implemented. The following are the different
strategies for each level:
Strategic Level
•______________. Managers should lead in communication and ensure employees understand why supply chain
initiatives are essential to the company. For example, a chain restaurant will transition to having a commissary
where all raw materials will be converted into work-in-process inventories for easier and faster production of food
items in the kitchen. The management team's role in this transition is to spread knowledge on the benefits of the
implementation to all employees involved in the business.
• _________________________. It is essential to have visibility and control over a business to aid in making better
decisions for the company's welfare. An example of technologies employed is the property management system
(PMS) that allows real-time monitoring of room status and point-of-sale systems (POSs) where restaurants can
check each menu item’s profitability and adjust the inventories to be ordered.
Tactical Level
•________________ refers to preparing, supporting, and helping each employee in an organization to adapt to
the new ways of operation. A clear vision must be conveyed to the team, especially on which aspects of the
operation will be changed, since this motivates employees about the process and its future.
• __________________________. In the delivery of products or services, employee skills must be consistently
developed and improved. In the hospitality industry, providing ongoing training for current employees allows
businesses to convey that everyone is important in how the business will succeed in the future, giving them a
sense of accountability.
Operational Level
•_____________________. A hospitality business needs to monitor the purchase costs of products that have a
short life cycle and are replenished frequently. __________ is done with fastmoving items, such as fresh
ingredients used in the food and beverage businesses, using __________ inventory management where there is
enough stock to produce only what the business needs and when needed. Its goal is to achieve a high production
volume with minimal inventory and reduce waste, lowering operations costs. Proper forecasting, planning, and
scheduling orders can reduce inventory costs.
• ____________________. Using ___________________ (KPIs) in the supply chain operations is essential for
monitoring suppliers' performance in fulfilling goals. For example, Starbucks developed a weekly scoreca rd to
track third-party carrier performance in costs, service, and productivity. The weekly scorecard evaluates the
reliability, responsiveness, sales, inventory planning accuracy, and order lead time in the supply chain against the
set targets. Analyzing the evaluations can help in designing strategies for a smoother business operation, ensuring
customer requirements are met. Using KPIs will provide a minimum standard for upcoming supply chain and
logistics projects while promoting openness, cutting costs, and improving customer service.
It is critical to use these strategies to meet the varying demands of customers and maximize overall costs and efficiency
in hospitality businesses. Managers must recognize the costs and benefits associated with using supply chain management
strategies in addition to concentrating on evolving consumer expectations.
SUPPLY CHAIN PERFORMANCE METRICS
What is a Supply Chain Performance Metric? (Baluyot, 2022)
_________________ are performance indicators businesses use to _______ and __________ the __________ and
__________ of the processes involved in the supply chain. The gathered information can be used to manage an
enterprise's inventory, sales, and suppliers. It can also help a business identify the areas that need to be improved or
enhanced so that the supply chain of a business can be adaptable when faced with a challenge (Calzon, 2023).
Supply Chain Performance Metrics
In the competitive tourism and hospitality industry, the enterprise must determine the parts they need to improve on and
what they do best. Once identified, the management can assess and make well-informed decisions in the state of the
supply chain operations so they can be flexible and adaptive to what problems they may face to ensure smooth delivery
of products and services to the customers. Below are some of the common supply chain performance categories used in
any industry (Baluyot, 2023):
• ________________ measures the ability of a supply chain to meet customers’ demands. In the hospitality
industry, guests have preferences in their rooms and food. It is the business's responsibility to meet and exceed
their expectations. The following are some of the metrics used under this category:
o ______________ is the portion of customer demand that can be satisfied from the inventory available.
A _________________ means that customers receive their orders correctly and on time, leading to their
satisfaction. On the other hand, a _____________ signifies frequent stockouts, which means customer
demands are not fully met, which may lead to dissatisfaction with the business.
o ______________________ shows the top issues that cause the customers to send products back. It
helps assess the business’s product and service weaknesses so they can take action to fix the problems.
For example, if the restaurant's dishes are always returned to the kitchen, the management should
identify why they are returned. It may be due to the food being delivered at the wrong temperature or
the food not being the same as described on the menu.
• __________________ refers to a business’s supply chain’s ability to generate profit by maximizing its resources
in producing and delivering its products and services. Below are some of the metrics found in this supply chain
performance category:
o _______________. It measures the time spent before a business gets paid for the products and services
it sells from when raw materials are purchased and paid. This metric helps businesses determine how
quickly they can turn their resources into cash (Champion, 2023). It is important to note that a business
can only generate profit when customers buy its products and services.
o ______________ is the number of times a company sells and replaces its stock in a period. This metric
determines if the business has too much inventory compared to how much stock is selling. It measures
how well a company makes sales from its inventory (Luther, 2023).
• ________________ evaluates the capacity of a company’s supply chain to respond to changes in product
demand. It shows how much increase/decrease in demand from current levels can be handled. Below are some
metrics used to measure a supply chain’s _________________:
o ________________ represents the total time to fulfill the customer’s order throughout the supply chain.
An example is the timeline of how the food items in a restaurant are being produced: from ordering
ingredients, receiving deliveries, and producing the food items up to the customers' consumption.
o ______________ tells the business the number of days needed to achieve a sustainable increase in
production. It tells how fast the business can adapt to a sudden change or disruption in the supply chain
operations (MBA Skool, n.d.).
• ________________ refers to the capability of the company’s supply chain to expand in line with the markets it
serves. It evaluates the company’s ability to produce and launch new products on time. Some metrics used to
measure product development are the following:
o ____________ for new product introduction measures how long the new products will be developed
before being introduced to the market. It determines the flow of operations the product needs to undergo
before being delivered to the customers. It includes the brainstorming process, what materials need to
be sourced and ordered, and how they will be prepared and delivered to the customers for consumption.
o _______________ from new products is a measurement metric used to determine how much revenue
comes from the newly introduced products and services. It allows a business to analyze if the new
products are being patronized by their customers and determine whether to continue/discontinue the
product depending on the results. For instance, if the sales of the new chimichurri-flavored chicken
introduced by a restaurant are consistently low, it is up to the management to continue/discontinue
producing it.
Successfully considering these different supply chain metrics will help businesses create strategies to improve their
operations to satisfy their customers.
Characteristics of a Good Supply Chain Performance Metric
A supply chain performance metric should give complete and detailed insights into the business’ supply chain processes.
It should be able to give a background on how each part of the process performs. The following are the characteristics of
a good supply chain performance metric (Baluyot, 2022):
• ______________. A good supply chain performance metric should not be technical. It should be simple and easily
understood and interpreted by anyone who looks at it. A clear understanding of what the metric measures should be
understood so that the information relayed can be easily deduced.
• _________________. Every supply chain performance metric should not be subjective (open to self-interpretation);
rather, it should be objective (based on factual data, such as records, receipts, or documents) because the explanation of
the metric should determine the current performance of the supply chain operations of a business.
• _________________. After the data analysis, some metrics result in weak or insubstantial information; therefore, they
will not be a good basis for business decisions. The metric must only measure and analyze data highly relevant to the
supply chain operations that may affect stakeholders.
• _____________. should promote and facilitate productive behavior. For instance, a metric that measures the number
of orders processed during a given period would encourage management to try to increase the speed of providing
products and services to customers.