Thousands of activities are performed and coordinated within an organization, and every company has at least one supply chain relationship with another organization. Research has led to the conclusion that “the structure of activities within and between companies is a critical cornerstone for creating unique and superior supply chain performance” (Lambert, 2005). Effective supply chain management requires the integration of business processes with key members of the supply chain, as valuable resources are wasted when supply chains are not managed effectively. Standard business processes allow managers from different organizations in the supply chain to use a common language and connect their organizations' processes with other members of the supply chain. Demand management is the supply chain management process of balancing guest wants and needs with supply chain capacity. Management can match supply to demand and have little disruption if the appropriate process is already in place. The process is not limited to forecasting, but also includes matching supply and demand and increasing flexibility. An effective demand management system uses all available data to reduce uncertainty and provide efficient flow throughout the supply chain. Marketing needs and production plans should be coordinated at the company level, so that multiple suppliers do not deliver the same products at different prices to each hotel. Instead, cost savings can be found in order consolidation. Supplier relationship management is the process of defining how a hotel interacts with its suppliers. As the name suggests, this is the mirror image of guest relationship management, because a hotel needs to foster relationships with its suppliers as well. As with guest relationship management, a hotel will form close relationships with a small subset of its suppliers and manage arm's length relationships with others. A contract is negotiated with each key supplier that defines the terms of the relationship. For less critical supplier segments the contract is non-negotiable. Supplier relationship management is about establishing and managing these contracts. Long-term relationships are developed with a small core group of suppliers. The desired outcome is a win-win relationship for both parties. Guest relationship management provides structure for how guest relationships will be developed and maintained. Management identifies key guests and guest groups to target as part of the hotel's mission. The goal is to segment guests based on their value over time and increase guest loyalty by providing personalized products and services.
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