Embrace and adopt e-procurement trends
The outlook for the hospitality sector in India remains positive as the sector is expected to grow at a CAGR of 10 per cent from 2021 to 2025. It is further projected to reach US$ 23.5 billion in 2023 and grow at a CAGR of 4.73 per cent to reach US$ 29.61 billion by 2028. The sector witnessed strong recovery in the last quarter of 2023 with the festive season boosting the demand for travel and dining out.
The F&B sector benefitted from the increased footfall and spending power of customers, especially during the festive season. According to a survey by the National Restaurant Association of India (NRAI), the average monthly sales of restaurants in India increased from Rs 15 lakh in August 2023 to Rs 25 lakh in November 2023, while the average monthly expenses decreased from Rs 12 lakh to Rs 10 lakh in the same period due to operational cost cutting.
The sector also benefitted from the events and initiatives, such as the G20 Presidency, the ICC Men’s World Cup and development of destinations as a package for domestic and international tourism.
In today’s fast-paced business environment, staying ahead of the latest trends in procurement is essential for success. The increasing global pressures on supply chains underscore the critical need to proactively track and swiftly embrace procurement trends within your organisation. The hospitality industry has faced disruption in recent years due to the pandemic and its effect on the global supply chain. As a result, businesses have had to adjust their operational infrastructure and procurement practices to adapt to the new environment. Procurement trend is the overall direction in which the market is moving. It changes with time and is dependent on many factors, mostly external. It helps identify the general movement of the industry and equips you to better handle the future.
1. Digitisation, cloud-based solutions and procurement automation: Digital tools are revolutionising the way that organisations manage their supply chains, with innovations like automated sourcing platforms and predictive analytics improving efficiency and effectiveness across the value chain. Within the procurement digital toolkit, there are tools to effectively manage supplier relationships, contract lifecycle, inventory levels and cost management.
The hospitality industry will be putting more efforts on introducing strategic sourcing, predictive analytics and supplier collaboration tools to streamline the procurement experience, automate manual tasks and increase efficiency. Cloud-based software solutions offer benefits for procurement such as flexibility, scalability and cost savings. Additionally, cloud-based procurement platforms offer a number of advantages over on premise solutions, including scalability and easier integration.
Collaborative platforms such as e-sourcing and reverse auctions are enabling organisations to find more efficient, cost-effective ways to source goods and services. Within the organisation and the tools, they will govern how their procurement can be modernised.
2. Sustainability: 2024 will have more emphasis on sustainability and it will become a more important trend this year. From a procurement perspective, sustainability initiatives including awareness and reduction of company’s carbon footprint will be a matter of discussion. Guests expect hotels to assess suppliers through a more eco-conscious lens while offering increased visibility into the supply chain that ultimately results the guest experience.
3. Utilisation of AI and IOT in supply chain management: The goods procured by hotels and venues are based on demand predictions and guest consumption patterns. Of course, predicting demand is hardly a perfect science and guest preferences change frequently. Fortunately, this is where the Internet of Things (IoT) and AI will come into play.
4. Developing better networks and supplier relationships: The global supply chain is always subject to change and / or large-scale disruption, and with this in mind, procurement strategies must be exceedingly agile and adaptable. Of course, this cannot be achieved without cultivating dynamic, high-touch relationships between suppliers and supply chain professionals.
Platforms like HPMF provide enough opportunities to Purchasing Managers to network with fellow colleagues, suppliers and other industry colleagues. It’s very important that every supply chain professional understands the importance of networking and its benefits in their day-to-day life.
5. Emphasis on flexibility, agility and resilience: The new normal set in faster than anyone could predict or plan to mitigate it. And the results were catastrophic. Businesses that weren’t designated as essential had to shut down their supply chain entirely, leading to supply chain holdups, lost revenue and waste of resources.
Just like the pandemic taught us, future emergencies may not allow anyone to prepare on the fly and step up in days. It’ll require long-term planning to create alternatives, plan for multiple scenarios, create loopholes and design strategies to help us react and address challenges as they arise. Procurement professionals will need to be more agile to stay on top of future emergencies. To build that agility, they will need to build resilience. Building resilience is all about designing supply chain to survive disruptions should unforeseen circumstances arise.
6. Corporate Social Responsibility: It has become a buzzword in the business world in recent years. Companies are expected to be not only profitable but ethical and socially responsible. The focus is no longer just on financial success, but also on the impact businesses have on society and the environment. CSR across the supply chain is a call to take a stance beyond just profit and invest in a more equitable and fair world.
7. Block chain: The use of block chain in procurement means all users throughout the supply chain will have visibility to the entire process, as well as a high degree of security throughout the process. The chain of custody and batch tracking are two applications within the block chain that are especially important for procurement. Building trust throughout the entire supply chain speaks to the emerging importance of the block chain and its importance to procurement.
8. Compliance management With increasing regulations and compliance requirements, the need for robust compliance capabilities within procurement is essential. Procurement Compliance allows companies to control spending and stick to a set of procurement standards within an approved framework. Compliance is an important part of an organisation’s risk management strategy. Shifting regulatory requirements throughout the supply chain means that business has to adapt to agile procurement policies and practices.
9. Risk management With today’s globalised supply chains, managing risk is more important than ever before. Hospitality organisations need to prioritise risk management as a fundamental way to stay resilient. An investment in risk professionals will reap benefits within procurement as these individuals continue to monitor the process for risk throughout the supply chain.
10. Innovation has become an important aspect of procurement, with organisations partnering with suppliers to develop new technologies and products that can improve their bottom line. In the past, procurement has focussed on traditional means of managing the business. Recently, with trends moving so quickly, our supply chain has adapted quickly and will continue to capitalise on the fast pace of innovation within this space.
Conclusion To stay ahead of the curve in today’s business environment, it is important to be aware of the latest trends in procurement. The 10 procurement trends that have been outlined are a good place to start, as they represent some of the most important changes currently taking place within this field. It is essential for organisations to embrace these e-procurement trends and adopt them quickly within their business in order to gain a competitive edge in today’s dynamic marketplace.
Whether you are looking to streamline your procurement process, better manage risk or incorporate more sustainable practices, there is a trend here that can help you do just that. Fast-paced changes within procurement are here to stay and it will become more important than ever to keep ahead of the trends.
Author Bio: Nitin Shankar Nagrale is Founder, HPMF and CEO, India and Emerging Markets, QualityNZ
