Buying power
by This email address is being protected from spam bots, you need Javascript enabled to view it on Saturday, 26 September 2009
Following a US $1.9 million refurbishment at the Hilton Dubai Jumeirah, cluster purchasing manager Muhammad Ilyas Bhatti says there is no better time than now for a complete hotel makeover.
How did your purchasing career start?
I started my career almost two decades ago in a five-star property in Dubai. It was a time when five-star properties were a select few and the local supply market was not ready to cater to the industry's demands. In fact, even the most basic of our food supplies had to be imported from Europe on a weekly basis.
Back in the day, if a chef forgot to order an item or we had an unexpectedly-high consumption rate for a certain basic item, we had no choice but to wait for the next weekly replenishment. No doubt, compared to today's cycle of purchasing, those days would seem a far cry away and were challenging.
What are the biggest challenges as Hilton Dubai Jumeirah and Hilton Dubai Creek cluster purchasing manager?
I admit being the middle man between the customer departments and the supplier is not an easy role. We have to source, match and meet expectations required to satisfy high levels of service standards. This can at times pose some challenges in terms of commitment and efficiency of external agents. Product and market knowledge and good relations with suppliers (‘follow up' is the name of the game) is a key formula for success in purchasing. We do our best through regular follow-ups, monitoring and occasional hand-holding with our partners.
Why did you decide to undergo the refurbishment at the Hilton Dubai Jumeirah now?
As per our Hilton brand procedures, refreshment is required every five- to seven years and involves adding new elements to rooms and public areas to ensure the hotel is competitive within its market. Regular refurbishment is pivotal to maintain customer loyalty, room rates and market share. A certain percentage of our earnings is set aside for maintenance and refreshment each year and economic cycles do not affect these budgets. In the last few years Dubai went through spurts of growth in terms of revPAR and occupancy; as a result we had a healthy budget to work with.
How has the cost of supplies been impacted by the downturn?
Hilton Dubai Jumeirah was fortunate enough to avail of almost a 20% reduction in costs for the refurbishment due to the economic climate.
Does that mean the economic climate resulted in a buyers' market?
Yes, the current economic situation is clearly reflected in supplier responses. The past few months have been very interesting and informative. We have witnessed a large number of suppliers wanting to impress us with their product range, offering a bouquet of options. This is a pleasant outcome for our side, placing us at an advantage in our negotiations.
Are new suppliers trying to tap into the Middle East market?
A lot of new international suppliers have approached us. The entry of non-traditional countries adds to the variety of product mix and range; it creates a surprise element in our offerings. This diversity in turn increases the elasticity of our threshold with regards to price, quality, variety, etc. Certainly this creates a healthy competitive environment for the regional hospitality market.
How do new international suppliers compare to existing local companies?
A large proportion of our local suppliers are our preferred suppliers. The refurb was handled by local suppliers mostly. The growth witnessed in the industry over the past 10 years created a good pool of local vendors. Local vendors have the benefits of ease of communication, availability, pricing and after-sale service.
How do you maintain good relationships with suppliers?
It is essential that we treat our suppliers as partners in our business. We educate them about how their involvement is an integral part of maintaining our standards. And most importantly, we develop fidelity with our partners by a disciplined adherence to our payment commitments. Our positive partnerships are reflected through the high standards experienced by guests in our properties.
What is the hotel's largest consumable product expense?
High usage, essential items such as bed/bathroom linen and china/silverware require a lot of investment, while maintenance of buildings and machinery, and laundry and cleaning prices add a good deal to costs.
And finally, what are your favourite parts of the job?
Due to the vast diversity of our product handlings we never get bored. You face interesting and new challenges each day in this role. Each working day provides you exposure to a variety of disciplines; from F&B, chemicals, printing, stationery and engineering supplies, to chinaware, utensils, furniture and IT supplies. In fact, securing a good deal on paper clips can be as pivotal as securing a cost-efficient contract for LCD TVs for the hotel.
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