Certificate
It is certified that BBA thesis proposal titled “supply chain/inventory management of
consumable goods and services in hotel industry” has been prepared by Student Umar Amin,
Enrollment No. 01270 and has been approved for submission.
Mr.UMAR
Thesis Supervisor
DECLARATION FORM
I Student umar amin Reg. # 01270 hereby declare that the thesis titled “supply chain/inventory
management of consumable goods and services in hotel industry” has been submitted by me in
the partial fulfillment of the requirements for the degree of BBA and this thesis presents research
carried out at Iqra University Islamabad Campus and aims encouraging discussion and
comments. The observation and viewpoints expressed are the sole responsibility of the author. It
does not necessarily represent positions of Iqra University Islamabad Campus or its faculty. I
also understand that if evidence of plagiarism is found in my thesis at any stage, even after the
award of a degree, the work may be cancelled and the degree revoked.
Printing Date
___
Student Full Name
DEDICATION
I would like to dedicate this thesis to my beloved parents who have been a great source of
inspirations throughout my life and they have provided a lot of moral support to me and enabled
me to become what I am today. My sister and uncle also supported and courage’s me that never
give in. I would also like to dedicate this thesis to my honorable teachers who gave me precious
knowledge.
ACKNOWLEDGMENT
After acknowledging the blessing of my Allah in helping me in my efforts, I would like to thank
all of the other helping hands who were with me in the making this report a possibility.
I would like to thank my supervisor Mr.Umar, for his consistence, advice and support given
during the writing up of this thesis, for giving me the opportunity to carry out this knowledgefull study. His patience and constant feedback have been inspirational in finalizing. Without their
encouragement and continuous support this study would have been a cropper.
Student Full Name
TABLE OF CONTENTS
CHAPTER
I
INTRODUCTION....................................................................

Problem identification

Problem statement

Objective of the research

Rationale of the study

Scope of the research
II
LITERATURE REVIEW
III
METHOD

Sample

Instruments and measures

Procedure
…………………………………...
.................................................................
Supply chain/inventory management of consumables goods
and services in hotel industry
Umar amin
REGN. NO. 01270
BBA-SUPPLY CHAIN MANAGEMENT
A thesis in partial fulfillment of the requirements for
the Degree of Degree Name
DEPARTMENT OF MANAGEMENT SCIENCES
IQRA UNIVERSITY, ISLAMABAD CAMPUS
2012
Chapter no. 1
Introduction
Background
In hotel and catering business supply chain had a significant role. In order to get better service
levels towards customer’s there was really need to build steady relationships between supplier
and employees.JIT not only improved the user-friendliness and ease of access of food and drinks
although put business into flexible position. Barcode based solutions increases process
automation and provides greater clearness in the inventory. Maximizing the effectiveness of the
distribution side, will do up the pour of goods in an accurate way, up to the point-of-sale.
Supply chain management involved in the purchasing of the raw materials from the vendors,
then manufactured the products and to end with passing of finished products to the wholesaler,
after that to retailer and then to the consumer. The supply included every exertion involved in
producing and delivering a final product or service, from the supplier’s supplier to the
customer’s customer. Hotels, “homes away from home” to voyager, provide four types of
foodstuffs and services, in requisites of lodging, food and entertainment (Wood and Knowles
1997, 1998).
Hotels had a strong link to tourism and holiday industry as a service provider. The majority of
hotels were small to medium sized enterprises more likely to come from the large global hotel
chains such as Hilton, Accor, and Forte. During implementation of management practices on the
hospitality industry that took huge pressure. From the private and public sectors attracted through
arrangement of Sitting and design. In order to satisfied your target market and increasing
prosperity it’s important to minimize your delivery lead time. Supplies in well organized set up
were an ideal factor for cost reduction. Barcode scanning helps into limit administration costs.
Hotels provided two types of services mostly: 1. accommodation 2. Dining services. Services
make available like: location, bedroom, reception, food and beverage, general facilities, hotels
were classified as Deluxe, First Class, Standard, and Economy. Guests can be expecting a room
With private bath and TV service as well as laundry, cleaning and pressing. Apart from the
services hotels offer other services: meeting rooms, ballrooms, spas, cafes, dining rooms, and
night clubs. This sector operated a 24/7 and many other services such as maintenance rooms,
title, and waitering. This also contributed to the labor intensive nature of work in the hospitality
industry. Among others, four key characteristics of services (Korczynski, 2002) are:

Intangibility

Perish ability

Simultaneous production and consumed

Inseparability
All these features were make a great degree of integration between, on the one hand, operational
delivery, marketing and financing of hospitality services and other human resources that were
within the service delivery process used (Baum and Mahesh, 1988, 1995).
For many travelers, the travel on vacation or visit did business. Hotels were usually places that
they live in another place when at home. Hotel industry included all types of temporary
accommodation from luxury 5-star hotels to youth hostels. In addition, room service, which most
hotels offer a variety of accessorial service. In addition, the luxury hotels offer meeting rooms,
swimming pools, beauty salons, fitness centers and many other facilities. "Consumers were more
interested in the world behind the product they buy. From the cradle to the grave each and
everyone is responsible for the entire value chain of the product and also responsible for the
external effects." (United Nations Environment, 2000)
Rationale of the Study
Saving money is another benefit for hotels adopting supply-chain management programs. This
study will help in to observe the inventory management of the perishable goods in hotel industry.
The customer’s perspective if translated into measurable targets, could serve as a valuable insight
to monitor improvements, and deciding upon attributes that need to be focused on to enhance
service quality. Customers satisfied with quality, not only are more prone to stick to the hotel
they are likely to spread positive word of mouth and attract other customers as well meaning
more beneficial for the hotel.
Skandic hotels are nearly 2,000 rooms are to be mounted in any year. Accor Hotels has an active
environmental agenda. They have many different hotel chains, of which the Coralia group that is
involved in the local labor market, sourcing issues. (Alistair C. Ping, 1998)
Problem Identification
Hotels account for a great deal of waste flow. In order to minimizing waste and increasing the
effectiveness of materials in dropping costs is a key substance for hotels and prolonging the
stability of its products. Hotels are expected that the costs of achieving these goals on to their
suppliers.
The main thing is that industry or company also able to avoid the pitfalls of JIT which are also
including unsuitable inventory levels and rising up of waste due to wrong business processes.
However, JIT have facing a lot of challenges in the hotel industry. Execution of JIT in hotels is
one general drawback, if it is not implemented according to the framework of lean management
such as TQM and constantly improvement, otherwise it will not that much able to get the right
efficiency growth. (Hollins and Shinkins, 2006).
Data management system which is although up to date is requires for the implementation of JIT
practices in the industry but currently very few or none of them have that kind of management
information system. Because of lack of computer systems to unite the supply with restaurants
that’s why suppliers commonly do not have capable to assure the supply according to under
JIT.(Murphy & Smith, 2008).In order to fit JIT practices with your hoteling business then it
requires
considerable business process to reengineering, and drastically redesigned.(Slack,
Chambers, and Johnston, 2007).
Problem Statement
The purpose of the present study is to investigate and analyze the impact of supply chain
fundamentals in the hotel industry. It aims to examine that JIT will minimize the wastages
of perishable goods and also will improve the service level of inventory management
process.
Research Question
What are the benefits and negative aspect to a JIT management system in hotel industry?
Objective of the Study
The major objectives of this study are:

To analyze the impact of JIT management on the industry overall performance.

To analyze the variations of inventory levels in the industry.
Scope of the Research
The research analyzes the effect of supply chain management in the hotel industry. The
trend observed the JIT guides the companies to maximize the profit of the organization and
provide timely delivery of goods to the customers. The research provides necessary
information which guides the hotel management. Further also to observe the inventory
management of perishable goods.
Chapter No. 2
Literature view
The non-value adding activities to put in storage, quality control, material movement and change.
Waste is classified as "something other than the minimum amount of equipment, materials, parts,
space and time worker who absolutely necessary to the value of the product to add are". Defined.
Schroeder also argued that "anything that does not contribute value to the product is considered
as waste." In other words, the industry should try to make use of resources to a minimum
reliability with the most efficient forms of production. While most Western management has to
focus more on improving the control of the value, the JIT system is focused on eliminating the
remaining 95% of non-value-adding resources (Jewitt, 1992).
Perceptions of performance to date best reflect a customer’s perception of service quality and
that expectations do not factor drastically in this evaluation. (Cronin, & Taylor, 1992).Customer
loyalty means that customer intentions for repurchasing the particular product. Brand attitudes
influence so much to the intention of the repurchase and it may also be influence by the social
norms, budget, high search, cost, inconvenience, inaccessibility and of course the lack of the
choice e.g. a women wants to buy the Tiffany’s jewelry but may be repurchase it because she
cannot repurchase expensive and luxurious goods. So customer loyalty heavily depends on the
factors mentioned above (Ajzan & Fishbein, 1995).
"It's imperative to control the whole supply chain," Miller says. Now, the company is tackling
the amalgamation of global procurement, bring on by its reacquisition of Hilton International in
2006. Restaurants are open seven days serve their products to their customers on regular basis.
This study examined the issues and benefits which are faced by restaurants by using JIT. The use
of JIT in hotel industry is not impossible, but in order to figure out the benefits it’s a very tough
task because implementation requires up to date management system, Or else, it is likely to cause
in product shortages and overages due to poor forecasting or waste within the organization.
When we talk about the time period then in the short term accomplishment of JIT is too
expensive rather than in the long term it’s save the money due to minimization of waste.
Basically JIT inventory strategy is a management strategy that aims to produce or to make
finished goods required by the company also eliminate the wastes and reduced the inventory
costs. (Slack, Chambers, & Johnston, 2007). Kanban, signals are the methodologies of JIT which
automatically improve the financial outputs reduced and cut down the extra inventory. TQM,
vendor management, waste elimination, product and design flow that are the basic JIT inventory
management process. JIT is more commonly used in manufacturing processes rather than enduser facing retail environments (Hollins & Shinkins, 2006).
In the evenings and weekends it serves customers from a short a la carte menu while during the
lunch rush, it serves a set menu with specific choices. These kind of restaurants using JIT in
order to get our potential benefits elimination of wastes and improvements in productivity one
more thing is important by using JIT is try to minimum use of facilities, materials and other
equipments. If organization properly uses the JIT they can avoid the pitfalls and inappropriate
business process. Many challenges which are involved the implementation of JIT, if it is not
incorporated into the framework of lean management practices such as TQM, then it Can be
expensive and not very efficient (Hollins & Shinkins, 2006). Management information system
effectively supported the JIT because without this it will not work properly and industry may
have been into loss (Hollins & Shinkins, 2006).
Under the requirements of JIT suppliers do not have the ability to assure the supply chain
because may lack of knowledge about the latest high technology and not too much focus on the
IT field in the hotel industry (Murphy & Smith, 2008). Thus IT have less involvement in the
hotel industry that’s why it may be difficult to implement full JIT process in the industry the
suppliers more likely preferred the manual way of transaction of inventories because it saves
money (Slack, Chambers, & Johnston, 2007). its includes not only inventory management
practices, but moreover food production, waste management, and quality control practices, all of
which will be essential to improve the industry's performance. Thus, JIT adoption is not actually
mean that to fulfill of objectives, and must be watchful to ensure that it is in apt condition for the
transition earlier to beginning (Murphy & Smith, 2008).
JIT implementation, the costs in the short term, as planned, the restaurant money. During the
execution of the IT system to provide inventory management, ordering and forecasting can be
costly for the industry, the local need to provide incentives for providers to choose from, so that
they implement these costs (Murphy & Smith, 2008). Relationship between suppliers and
restaurant are so warm, but to a certain extent, it cannot even this close enough and therefore, it
must be formed. The industry cannot be augmented before cost of refitting bound storage space
for other principles, staff training and other accounts (Slack, Chambers & Johnston, 2007).
But will these direct benefits are also expected to increase over time as the restaurant staff in
programs such
as
TQM, to
offer the for
continuous
development to contribute to problems and improvement
2007) identify. But if these processes
are not
process improvement
(Slack, Chambers and
implemented in
and staff
Johnston,
conjunction with JIT process,
it is possible that the JIT will not lift its long-term needs, and as difficult to maintain. But in the
long run, when the restaurant effective implementation of JIT expects the restaurant to reduce
costs and increase efficiency to reduce. Be immediate or short-term benefits realized a waste
reduction of
more than employees
in the
sales order
without the inability
to
meet
demand (Slack, Chambers, & Johnston, 2007).
Subway Restaurants, down with its cooperative purchasing an independent group for the
supply of franchisees is made that an
innovation was a
very
early
stage to
optimize the
movement to take control of the sourcing process, and therefore the trend has spread to all other
major companies. More and more hotels and restaurants make the use of expenditure
management, procurement, audit / compliance, and inventory systems to gain and improve
transparency and control of the acquisition. Hilton hotels are that the host companies’ that
have changed their approach. "Ten years ago we were behind the curve compared to other host
societies. Now we are near
the top," say
(Don Miller, regional director
of supply
management for Hilton).
"Every time that companies spend millions of dollars, and reduce the cost of half a cent for each
one dollar in ads a lot of money," says Robert Spies, Lecturer, Cornell University School of
Hotel Administration, Ithaca, New York, "for companies with narrow margins, and to achieve
greater savings. "models deliver new, such as software as a service, however, helps to make the
implementation more accessible to small entities." the hospitality industry / hotel is the risk of
particular aversion, and software solutions based on the Web allows companies to get their feet
wet with the technology. ", says Smith. These solutions will not significantly affect the adoption
of technology in the industry, and predicted to him and inventory visibility and improve control
over these tools also provide the best fuels expectations.
"If Red Lobster Darden Restaurants or not to predict the function of the poor sales, and will run
out of food on the spot because it buys goods speci`alist is not always readily available,"
says Spies. Small companies generally fail to predict
the
correct procedure,
he
says,
though today at the point of sale systems that can produce the required data. Take advantage of
the capabilities of real-time inventory of these applications enables operators to monitor closely
and respond
to fluctuations
in
demand, and
helps
them
to rate distributors
and manufacturers about the quality of service. These tools ensure that supplies do not reach
the building is not exhausted, and the next generation of applications and automate the necessary
measures to resolve such issues.
Integrate inventory management and business intelligence applications with Web services to
provide real-time data is another increasingly common to ask hotel operators, says Stehle. These
real-time data is particularly useful for ensuring food security. Restaurants and shops are home to
explore new ways to ensure traceability and safe food handling, from field to table. "Restaurants
today face an increasing need to assure customers that they know where food comes from," says
Spies. Controls certification, inspections, and leaf spot are now, he adds. Because of these
problems, many hotel chains are shifting their focus from a partnership with the cheapest
suppliers to find partners that offer the best aggregate supply relationship. for some operators of
large hospitality, the takeover means delve deeper into the supply chain and to become directly
involved with the products.
"If a company regularly buys large quantities of cheese or beef, for example, coverage may
help stabilize prices," says Spies. Some companies go even further: the new performance in New
York City caterer Great purchased a farm to ensure a direct supply of fruit and vegetables in
season. These innovative practices are increasingly common in the area, move the chains to
adapt to a changing marketplace and meet customer demand. While the hotel industry is still
considered not quite cutting edge when it comes to the adoption of the latest thinking and supply
chain technologies, large companies are beginning to fill the gap. By adopting new tools and
processes,
industry solidifies his
belief
voyage back to the basic subcontracting quality
services (Smith, 2006).
that customer
food,
satisfaction really means a
beverages,
supplies and
CHAPTER 3
METHODOLOGY
SAMPLE
The methodology of this paper will be designing interviews related to hotel firm’s attitudes
towards supply chain and the interviews are designed to collect information from this
particular firm. The pearl continental hotel (PC) that will be targeted.
Instruments and Measures
The research will be based on interviews that will be taken from pearl continental hotel
Pakistan. To reduce inefficiencies and ensure fast gathering of information, reasonable cost
and flexibility data was gathered.
Procedure
After the collection of data through interviews other relevant information would be gathered
from previous articles. The participants were provided explanations for any queries and they
had regarded to the interview statements. SPSS (Statistical package for social science
program) was used for compiling and analyzing of data. After gathering data, frequency
distribution test was applied to obtain results.
References
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Dr. Divina M. Edralin, Ms. Paulynne Castillo, an In-depth Study on the Hotel and Restaurant
Industry in the Philippines, August 17, 2001
Professor Martin Charter, Aleksandra Kielkiewicz-Young, Alex Young, Andrew Hughes, Supply
Chain Strategy and Evaluation: The Centre for Sustainable Design, January 2001
Vikas kumar, Dixit garag, N P Mehta, JIT practices in Indian context: just in time,
implementation, elements, benefits, 25 November 2003: accepted 15 April 2004
Juma Makweba Ruteri, Qi Xu, Supply Chain Management and Challenges Facing the Food
Industry Sector in Tanzania: Glorious School of Business and Management,
Donghua University, December 2009.
Pei-Chun Lai and Tom Baum, Just-in-time labour supply in the hotel sector: The Scottish Hotel
School, University of Strathclyde, Glasgow, UK, June 2004
Pre Feasibility Study, VEGETABLES & FOOD PROCESSING Tomato Paste & Fruit Pulp: PAKISTAN
HORTICULTURE DEVELOPMENT & EXPORT BOARD, 2003