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RESEARCH IN BRIEF

How do supplier relationships contribute to success in conference and events management?
Susan M. Ogden and Eileen McCorriston
Glasgow Caledonian University, Glasgow, UK
Abstract
Purpose – The aim of this paper is to report the findings from a survey of UK conference and event managers, which highlights the benefits that can accrue from supplier management within this sector. Design/methodology/approach – A survey of venue managers covering a cross-section of venue types was used. Findings – A significant proportion of venue managers report having long-term supplier relationships, placing considerable value on the non-financial benefits that can accrue from long-term supplier relations featuring mutual trust and good working relationships. These include consistency, responsiveness and flexibility in service delivery. Additionally, the familiarity of regular suppliers with the venue and its procedures, can lead to seamless service delivery to the customer and free-up venue managers time. Research limitations/implications – The research design provides a one-sided view of supplier relationships. Practical implications – Attention is drawn to the performance benefits arising from building supplier relationships and offers guidance as to how these can be sustained by avoiding the pitfalls on long-term relationships. In doing so, the findings legitimise the importance of taking non-financial considerations into account when awarding or renewing supply contracts. Originality/value – This paper applies lessons emerging from research on supplier relationships to a growing, but under-researched, sector of the hospitality industry. Keywords Supplier relations, Quality management, Supply chain management, Conferences, United Kingdom Paper type Research paper

Supplier relationships

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Introduction The MICE (meetings, incentives, conferences and exhibitions) sector within the UK is experiencing increasing competition due to an expansion in the number and range of facilities operating in the market (see MRU, 2000). This paper argues that supplier management can be a key ingredient in improving the performance within the sector. The sector is supported by a wide range of suppliers providing services such as security, transport, technical support including AV services, crewing and exhibition design, as well as marketing promotion and business support. As is shown in Figure 1, it is the job of venue management to ensure that suppliers, some of whom come into direct contact with customers/conference participants, provide the level of support

International Journal of Contemporary Hospitality Management Vol. 19 No. 4, 2007 pp. 319-327 q Emerald Group Publishing Limited 0959-6119 DOI 10.1108/09596110710747652

2002).4 320 Figure 1. 1998). Given that service quality issues have been ranked by industry panel members as of “prime importance” (Weber et al.. 2006). Much of the literature on the benefits of supplier management is based on studies undertaken in the manufacturing industry. Silvestro. 18) argue that in the meetings and conventions industry that “individual transactions have a cumulative effect on the overall evaluation of service quality”. particularly those which may involve end-customer/supplier contact as in the conference and events industry fall into this category. These benefits are particularly visible when suppliers are delivering services that involve frequent inter-organisational contact. p. it can be argued that supplier management is an important source of competitive advantage in conference and events management. Supply chain management. 2006). hospitality and leisure management . For example. An exception to this is a study by Dean and Terziovski (2001) which found that although the extent of supplier partnership is rather low. with flexibility ranked first.g. and its close association with total quality management and business excellence models all emphasise the business benefits of developing relationships with suppliers and external partners. 2003). Key to realising non-financial benefits is reported to be the human resource elements of supply relationships (Koulikoff-Souviron and Harrison..IJCHM 19. 2006). The aim of this paper is to report on findings relating to venue managers experiences of supplier management in the industry. indeed several studies have shown that within the service industry supplier relationships are judged to be of less importance (Huq and Stolen. The relationship network in conference and event management required by clients and venue managers. rather than a single point of contact in the exchange relationship (Koulikoff-Souviron and Harrison. Positive benefits of supplier management have also been reported in the retail sector (e. Supply contracts for services. Sheu et al. followed by lower costs and then stability (O’Toole and Donaldson. Hinton and Tracey (2003. Within the tourism. 1996. service organisations involving suppliers in system change and development performed significantly better in financial terms that those which do not involve suppliers in quality practices or performance improvement initiatives. A study of business-to-business buyer-supplier relationships reports that two of the top three ranked benefits are non-financial.

selecting organisations from across the UK using a variety of venue finding internet sites[1]. 2004. More recently. a study by O’Connell et al. 2005. a high degree of trust is placed in the supplier. Eastham (2001. Data is presented on venue managers’ attitudes to supplier management. 2006. more stable prices supply. the difficulty in avoiding antagonistic relations should not be under-estimated (see Emiliani.. Supplier relationships 321 . . easier management due to a reduced number of suppliers. a sense of intimacy based on closeness. Padro In order for the business benefits discussed above to arise it is suggested that managers should focus on developing factors such as: a common vision. a focus on delivering results (rather than control). Given the lack of current evidence relating to supplier management practices in the conference and events sector. p. Thus. To ensure geographical spread venues were also taken from national tourist board information on events venues in Scotland. 2000. Lam. (2006) focus on hotel buyer criteria in relation to food suppliers. Espino-Rodrı ´ n-Robaina. and the joint development of processes or procedures in relation to service delivery and monitoring (Rogers. . Thus. except in relation to food supply chain management. educational. such relationships are likely to be more egalitarian. 90). on-time deliveries and ability to provide emergency deliveries. there is little published research on the extent to which relationships with suppliers are perceived as an important element in organisational quality or operations management strategies. Lamminmaki. with the client or purchaser (or venue manager) passing an element of discretion for how the task is performed to the supplier. and the perceived barriers and benefits to building supplier partnerships. . A database of 1. 80) in her study of food supply chain management. 2005). found that the potential advantages of partnering relationships with suppliers include: . the survey aims to provide a baseline for further research. 2003). Nevertheless it is acknowledged that a degree of “separateness” is healthy to ensure that “the relationship retains its vitality” (Koulikoff-Souviron and Harrison. sharing and mutual trust. Notwithstanding these prescriptions. Research design The paper reports on findings from a survey of venue managers within the UK conference and events sector. provides an insight into the broad range of factors important to hotel purchasers. including contract award criteria. emphasising “togetherness” and sharing of responsibility. better quality as a result of increased supplier involvement. reduced inventory. and well-developed lateral communications. The database is stratified into sub-sets using four main venue classifications: purpose built. less time spent searching for new suppliers and tendering. and for Northern Ireland. and . 2005).literature. consultation and co-operative decision-making between the parties. however. p. multi-purpose. Other studies in the sector have focused on outsourcing within the hotel ´guez and industry (Hallam et al. 1996. including the quality of the products on arrival. price.000 conference venues throughout the UK was first constructed. Hemmington and King. but does not report on the extent to which purchasers are interested in developing the relational aspect of the transaction.

evenly spread across the four categories of venue. Contract award criteria Respondents rated the importance of nine criteria that may be considered when awarding contracts to suppliers.4 322 mainly universities and colleges. conference and events manager. The top five factors are: (1) technical expertise. educational (15 per cent) and purpose built (12 per cent). This response rate compares favourably with that recorded in other surveys on outsourcing (for example. visitor attractions). before summarising the implications for practicing managers. Unusual venues report the largest increase and largest decrease in their volumes of business.IJCHM 19. heritage buildings/castles. football clubs. and (5) financial stability. theatres. Key findings Business activity The survey confirms that the conference and events sector overall is still growing in the UK with 50 per cent of respondents reporting an increase in the number of conferences/events held.g. and unusual venues (e. all survey respondents were asked to provide contact details and job titles. Analysis of the contact details provided by 82 per cent of respondents provides assurance that informed views have been accessed: 23 per cent of respondents work at senior management level (e. It is not surprising that technical expertise is rated so highly because a key . enabling analysis to be made in relation to the status of respondent. head of conference and exhibitions). unusual (40 per cent). The main survey returned 151 fully-completed questionnaires by the set deadline. in April 2005. museums and galleries. The following discussion presents a brief overview of the findings. the 8 per cent response rate reported by Beaumont and Sohal’s (2004) study of outsourcing in 2000 Australian organisations). Educational establishment reported the least growth in their conference and events business. director. racecourses. after some adjustments to the survey instrument. The high proportion of unusual venues included in the sample is in reflection of findings from the BACD British Conference Venues Survey that in 2002 unusual venues account for around 27 per cent of all conference venues. venue manager). 38 per cent at operational management level (e. (2) cost. general manager.g. (4) prior relationship. multi-purpose (32 per cent). with full distribution to 940 venues taking place. As a key factor affecting the reliability of the data is the knowledge of the person completing the survey. giving a 16 per cent response rate. quality accreditation and environmental policies. and only 10 per cent reporting a decrease in business for the year 2003/2004. pointing to the greater volatility in this sector. and 21 per cent in sales/marketing/business development roles.g. For example. Of less relevance appears to be location. The self-administered postal questionnaire was piloted to 60 venues from across the specified classifications. (3) reputation.

mutual support. (2) quality of product. 90 per cent provided examples of the benefits (244 items listed by 130 respondents). 3. The suppliers’ knowledge of the venue facility and working practices accounts for some of these benefits. which was only mentioned by 18 per cent of respondents. 5. 4. consider their organisation to have long-term relationships with their suppliers. was raised by 37 per cent of respondents. 91 per cent. These venue managers described in their own terms the main benefits and drawbacks that accrue from such relationships. Advantages and disadvantages of supplier relationships in conference and events management .reason for outsourcing is to access knowledge or skills that do not exist within the organisation. team working and communication/rapport are all included under this category and several respondents clearly stating that such factors led to a “seamless operation” from the customer perspective. The high number of respondents coming from unusual venues where conference and event management is not a core part of the business also explains this finding. 2. as these quotes demonstrate: Suppliers are familiar with standards and working practices and therefore time is saved in explaining requirements each time. The most frequent advantage described by 46 per cent of respondents relates to benefits pertaining from having a positive working relationship. 3. Familiarity. Factors such as inter-personal trust. Four other criteria specified under the “other” category and ranked as “highly important” by the respondents adding these factors to the list are: (1) responsive and professional. As shown in Table I. Of those answering this question. and (4) top-class health and safety. 9. 2. 8. termed here as the “they know us” factor. 5. % a respondents Disadvantages (n ¼ 130) 46 38 37 21 18 9 6 5 4 1. 4. Good working relationships Consistency Familiarity Responsive and flexible Cost benefits Re-booking simplicity Security and control Service development and innovation New business benefits Note: aAdds up to more than 100 as some respondents listed more than one factor Table I. Supplier complacency Higher cost Purchaser complacency No problems Over-dependency % respondents (n ¼ 115) 67 22 18 8 3 Supplier relationships 323 Advantages 1. overall managers report non-cost or intangible benefits more often than cost or price. (3) “buy-in” to our culture. 6. as does understanding of regular client needs and experience of past events. while 80 per cent described disadvantages (149 items by 115 respondents) associated with having long-term supplier relationships (see Table I). 7. Supplier relationships A very high proportion of respondents. friendly relations.

] no great effort is made as the contract appears to be secure.4 They understand your needs. the challenges of . Regular suppliers are also felt likely to be more flexible or adaptable and willing to compromise or “do favours” for the venue managers. or lack of new ideas. Fewer respondents. Only a very small number of respondents (5 per cent) listed service innovation (e. Increased responsiveness and flexibility are also frequently given as a benefit (21 per cent of respondents). they are likely to improve the efficiency and effectiveness of a business operation by freeing up management time and improving service delivery quality. . service development and innovation (5 per cent). get to know your trends and can question anomalies with honest concern. “in the conference industry requirements are often last minute”. with 67 per cent of those providing a response to this question worrying that standards can slip due to over-familiarity. Other factors described by respondents include: booking convenience (9 per cent).g. there is a perception that long-term suppliers bring a lower level of risk in relation to the level of service quality that is received. However. The third most frequent issue raised as a disadvantage relates to “purchaser complacency” reported by 18 per cent of respondents. . Typical respondent comments in this category include: [. as one respondent commented. . In particular. 324 Over one-third of respondents (38 per cent) described consistency or reliability of the suppliers’ performance (the “we know them” factor or “we know what we’re getting” factor) as a key benefit arising from long-term supplier relationships. “learning from previous events and marking improvements in the next”) as a factor.IJCHM 19. only 80 per cent. “coming up with new ideas”. abuse of trust. the non-cost benefits of long-term supplier relationships are clearly highly valued by many managers. provided a response about disadvantages arising from long-term supplier relationship and a narrower range of views on the nature of the disadvantages were expressed. where it became difficult to withdraw from a contract when a relationship sours – this was only mentioned by a small proportion (3 per cent) of respondents. The speed with which suppliers can respond to requests at short notice is felt to be important in this sector because. while these benefits are more intangible in that they cannot easily be measured or reported on. [. This was a separate concern from “over-dependency” (either of the supplier or purchaser). These comments suggest that managers accept that some of the blame for higher cost or deteriorating performance had to be laid at their door for failing to monitor suppliers sufficiently or take time to look for more competitive quotes. Statements relating to higher costs and lack of competitiveness in prices received the second highest frequency (22 per cent). Clearly then. As one respondent admitted “You take them for granted and let things slip”.] sometimes the supplier feels they can let you down easier than a new client. and new business referrals (4 per cent). Implications for practioners The conference and events industry provides an interesting context within which to study supplier management because of the mix of venue type. and security and control (6 per cent). The most frequently described problem has been termed “supplier complacency”. .

are not yet being realised within this sector. where appropriate. many managers recognise that these managerial benefits may come at the cost of paying a higher price for supplier services. Be aware that suppliers can become complacent if they feel that management are not monitoring their performance. Involve suppliers in any in-house quality assurance activities or frameworks. Furthermore. Given these findings it follows that managers in this and in other sector of the hospitality and tourism industry should consider the following pointers for successful supplier management: . This study suggests that managers operating in this sector. like those in the study by O’Toole and Donaldson (2002). will also be balanced against their performance in relation to internal business perspectives. . allowing them the opportunity to feedback to the organisation their views about any performance gaps. particularly service quality. however. but also in relation to the freeing up of management time due to a reduction in the need to monitor supplier performance. encourage them to adopt quality standards themselves. This co-dependency provides an incentive for a high level of trust in the relationship to be fostered. Furthermore. Help them to help you innovate. the low number of respondents reporting service innovation as a benefit suggests that the full financial performance benefits that Dean and Terziovski (2001) report can arise from involving of suppliers in system changes and process improvements. have a well-developed level of awareness of the financial and non-financial costs and benefits associated with developing long-term supplier relationships. benefits relating to quality of service delivery are all cited more frequently than more financial or cost benefits. This higher cost may not be a problem if also accompanied by higher quality. Not only are advantages reported that enhance quality of the customer (participant)/supplier interface. Give suppliers performance improvement goals to work towards. In conclusion. Ensure suppliers know that their price competitiveness although reviewed in relation to other contractors. to ensure benefits are sustained managers should be aware that. your staff and your operating systems. they understand that good working relationships with suppliers built up over a number of years is likely to deliver improvements in consistency and reliability of service delivery as a result of an increase in the knowledge. Short-term or arms-length contracting modes may simply not be seen as a Supplier relationships 325 . Nevertheless. . responsiveness and flexibility of suppliers. . In particular. your customers. it is likely that the specialist nature of many suppliers in the MICE sector makes long-term ties mutually beneficial for the supplier and venue manager. as Emiliani (2003) argues. . and.capacity management in a very competitive sector. . Involve suppliers in a 360 degree performance appraisal of the organisation’s systems and procedures. Management time can be freed up and service quality improved by having suppliers who know your set up. and the range of specialist services that can be required by clients. . Set up systems to regularly review supplier performance against internal and external customer satisfaction. a degree of separateness is healthy to avoid supplier/purchaser complacency and maintain vitality in the relationship.

and Ball. and Padro ´ n-Robaina. 688-700. which can itself bring useful competitive accolades.4 326 viable or efficient mode of contracting for specialist services where alternative suppliers in the geographic area may be limited. pp. Butterworth-Heinemann. M. “Outsourcing and its impact on operational Espino-Rodrı objectives and performance: a study of hotels in the Canary Islands”. T. Limitations of the study A key limitation of the findings is that unlike the research by Koulikoff-Souviron and Harrison (2006). Supply Chain Management. in the UK the success of the EICC (Edinburgh International Conference Centre) in receiving the EFQM (European Foundation for Quality Management) award for Business Excellence in 2003. 107-15. Sharples..venues. pp. 15 No. Its external supplier of security services was the first member of the British Security Industry Association (BSIA) achieve ISO9001:2000 accreditation. The Association of Exhibition Organisers – www.findmeaconference. pp. 8 No.co. Hallam. N. G. and Baum. (2001). V. . Food Supply Chain Management: Issues for the Hospitality and Retail Sectors. Supplier management practices are also an important feature of an organisation’s journey to achieving business excellence.com References Beaumont. it would be advisable to adopt a case study approach to investigate these issues further.uk and www. 7. For example. 287-306. (2003). T. It would be interesting to investigate the nature and characteristics of the suppliers in this sector given that company size in the supply market or the level of fragmentation in the supply market would affect the ease or difficulty in sourcing alternative suppliers.uk. Vol.L. L. “The inevitability of conflict between buyers and sellers”. The findings presented in this paper suggest that many of the managers in the industry are aware of the benefits of working closely with suppliers. Vol. Total Quality Management.F. The large number of smaller venues in the study possibly also contributes to the greater emphasis on informality and close-knit relationships. pp. 2. 23 No. 3. 41-50. (2004). Easthamn. International Journal of Operations & Production Management. pp. International Journal of Hospitality Management. A. (2001). J. A. (2004). conference venue finder sites used include: www. “Outsourcing in Australia”. “Contracting out food and beverage operations in hotels: a comparative study of practice in North America and the United Kingdom”. S. “Quality practices and customer/supplier management in Australian service organisations”. and Terziovski. 5. and Sohal. Vol.IJCHM 19. despite the fact that they may not formally involve them in quality initiatives. (1996). Vol. Clearly. International Journal of Hospitality Management. partly stemmed from encouraging suppliers to pursue quality accreditation. Dean. Vol. This would allow observations to be made about the direction and strength of dependency between supplier and purchaser. Note 1.tsnn. M. this paper is based on a research design that presents a one-sided perspective on supplier management as only the venue management perspective is researched. Oxford. 1. 24 No. ´guez. Emiliani.org.D. 611-21. 12 No.

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