THE SIGNIFICANCE OF A COORDINATED SUPPLY CHAIN

MANAGEMENT OF THE HOSPITALITY INDUSTRY IN ORMOC

CITY

A Term Paper Presented to

WESTERN LEYTE COLLEGE OF ORMOC, INC.

A. Bonifacio Street, Ormoc City

In Partial Fulfillment of the Requirements in

The Subject Supply Chain Management

By:

Iman Jiv C. Taneo

December 2020
 INTRODUCTION

Hotel industry has been growing recently here in Ormoc City. Hotel industry has been popular

due to the various reasons. Ormocanons prefer to take food items from hotel due to their work

schedule and time pressures. Shape and design of recently architecture hotels too prove this fact.

Competition among these hotels is also rising time to time because of easy entry and easy exit from

the hotel industry. So, individual firms in hotel industry try to get competitive advantage over the

other. Thus, firms in hotel industry try to adopt supply chain management practices for their

survival in the market. Clemmer (1990) and Cooper (1997) defined that Supply Chain Management

(SCM) emerged in the 1980’s as a new, integrative philosophy to manage the total floe of goods

from suppliers to the ultimate user. Chopra and Meindl (2004) stated that a supply chain not only

includes the manufacturer and suppliers but also transporters, warehouses, retailers, and customers

themselves. Within each organization, such as manufacturer, the supply chain includes all functions

involve in receiving and filling a customers request. These functions include, but are not limited to,

new product development, marketing, operations, distribution, finance and customer service. It is

primarily concerned with the existence of any supply chain is to satisfy customer needs, in the

process generating profits for itself. Supply chain activities begin with a customer order and end

when a satisfied customer has paid for his or her purchase. Supply chain management practices are

set of activities undertaken in an organization to promote effective management of its supply chain.

So, Coordinated Supply Chain Management are important in Hotel Industry. Thus, this study

attempts to carry out the Significance of a Coordinated Supply Chain Management of the

Hospitality Industry in Ormoc City.

 SYNTHESIS

Ormoc is a first-class independent component City in Leyte province and a home to more than

215, 000 people. Ormoc City is one of the fastest growing City in the Region in terms of Economy

and Businesses. Ormoc is also a home to famous luxury hotels in the regions and offers Hospitality

Management. This study attempts to carry out the Significance of a Coordinated Supply Chain

Management of the Hospitality Industry in Ormoc City.

Supply Chain Management are all activities associated with the flow an transformation of

goods from the raw materials stage, through to end users as well as the associated information

inflows. This includes material and information flows both up and down supply chain. Therefore

supply chain includes a whole horde of systems such as systems management, operations and

assembly, purchasing, production schedule, order processing, inventory management,

transportation, warehousing and customer service. Coordinated Supply Chain Management means a

system which can help the hotel industry give individual hotel companies a sustainable competitive

advantage especially in today’s changing business environment, there is an increased focus on

delivering value to the customer at the cheapest possible cost. The use of a Coordinated Supply

Chain Management helps not only to the quality and service of the hotel company but also drive

down cost or expenses of the hotel industry here in Ormoc City.

 THEORIES, CONCEPTS AND PRINCIPLES

There are a myriad of concepts which have been conceptualized leading to framing of some of

the applicable theories one example is the Strategic Choice Theory (SCT). The theory is based and

dependent on the various strategic theories which are taken by the management to ensure that they

make rightful decisions on the supply chain. (Ketchen & Hult, 2006) Strategic Models of Supply

Chain Management Bechtel and Jayaram (1997) stated that the core philosophies or paradigms

adopted by organizations (such as total quality management, systems thinking, cost analysis

modelling and agility) can influence strategy formulation and implementation in their supply

chains. Strategic models of SCM contribute to this line of thought by describing and often

prescribing the strategy implications of diversity across product characteristics, demand

uncertainties or business strategies for effective SCM. For example, in the context of

responsiveness, Brown and Bessant (2003) described the role that manufacturing strategy plays in

the development of agile capabilities, while Fisher (1997) proposed a supply chain responsiveness

taxonomy based on demand predictability. Fisher’s (1997) proposal is simple and practical: the

demand characteristics of various products guide supply chains’ strategic response. For example,

functional (predictable) products are likely to generate a strategic response based on efficiency.

Conversely, novel and innovative (unpredictable) products require an organization to develop

strategies that are responsive in order to accommodate variations in supply and demand.

Importantly, Fisher (1997) argued that cost advantages are largely found where functional demand

patterns exist, rather than in novel supply chains. Consequently, organizations seeking to maximize

supply chain efficiency, manage costs and exploit their commercial advantage are likely to

concentrate on functional strategic alignment with their existing supply chain partners. However,

novel and innovative products with an unpredictable demand and short life cycle require a

responsive supply chain strategy to cater for changing customer needs and requirements (Fisher,
1997). An effort to augment Fisher’s (1997) original strategic SCM model was made by Lee (2002).

Lee considered further alignment of strategies with attention to supply uncertainty, in addition to

demand uncertainty, to propose four contingent, strategic models for SCM: efficient, risk-hedging,

flexible (responsive) and agile supply chains. The risk-hedging and agile strategies were new

additions to the strategic models of Fisher (1997). Resource (e.g. inventory) pooling and sharing

through provision of alternative supply sources underpins the risk-hedging strategy to mitigate

vulnerability against exposure to high supply uncertainty. In contrast, agile supply chains can

handle both supply and demand uncertainties, as they build flexibility and responsiveness into their

systems and processes. According to Lee (2002), the agile strategy has an encompassing nature in

the sense that it embraces the advantages of both risk-hedging and flexible (responsive) supply

chain strategies. As discussed above, strategic models of SCM play a fundamental role in enabling

contingent-based strategy design that promises improved SCM through targeted focus on supply,

demand, products and the manufacturing process

BENEFITS/MERITS
 When a business use a coordinated supply chain management, it has a competitive advantage in

its industry that allows to decrease the inherent risk when buying materials and selling product

services. There are many different benefits of coordinated supply chain management:

 HIGHER EFFICIENCY RATE

When your business is able to incorporate supply chains, integrated logistics, and product

innovation strategies, you’ll be in a great position to not only predict demand as well as to act

accordingly. And this is, without any doubt, one of the main supply chain management

benefits. Why? When your business implements supply chain management systems, it will be

able to adjust more dynamically to the fluctuating economies, emergency markets, and shorter

product life-cycles.

 DECREASE COST EFFECTS:

One of the advantages of supply chain management is the costs decrease in different areas. The

most important ones are:

 Improves your inventory system;

 Adjusts the storage space for finished goods which eliminates damage resources;

 Improves your system’s responsiveness to the actual customer’s requirements;

 Improves your relationship with both distributors and vendors.

 INCREASES OUTPUT:

One of the main benefits of supply chain management is the communication improvement. This

adds up to the coordination and collaboration with shipping and transport companies, vendors,

and suppliers.

 INCREASES YOUR BUSINESS PROFIT LEVEL:

 When you place your business open to the new technologies and an improved collaboration

within the different areas, you can be sure that this will ultimately increase your business profit

level.

 BOOST COOPERATION LEVEL:

When we’re talking about the most successful businesses right now, one of the things they all

have in common is the communication. In fact, when there is a lack of communication, your

vendors and distributors have no idea about what’s going on. So, this is definitely one of the

main advantages of supply chain management. Plus, when you also open your doors and

embrace technology, you can also take advantage of the fact that people don’t even need to

share the same space in order to be a true communication.The communication among the

different areas of your business will allow you to have faster access to forecasts, reporting,

quotation, statuses, among many other plans in real time.

 NO MORE DELAYS IN PROCESSES:

One of the main benefits of supply chain management is the fact that through communication,

you can actually lower any delays in processes. Since everyone is aware of what they’re doing

as well as what others are doing, this will mitigate any late shipments from vendors, logistical

errors in distribution channels, and hold-ups on production lines.

 ENHANCED SUPPLY CHAIN NETWORK:

It’s not easy to maintain a sustainable supply chain management system. According to some of

its advocates, one of the best ways to do it is by using a combination of lean practices (like
 waste removal, for example) with agile. By combining all the information gathered on the

different sectors of your business will allow you to have an enhanced supply chain network.

ACTUAL IMPLICATION FROM EXPERIENCE

In this current situation due to the pandemic most of the Hotel Industry were affected. Hotels

were forced to close their doors and deal with the revenue loss. The COVID-19 pandemic shook the

lodging industry particularly hard, and turned many hotel businesses upside down. Due to the rising

cases of Covid-19 Hotel Industry and the market crashes down but the better side is that there were

some hotels in the Philippines and even here in Ormoc City that are now open and ready to serve its

guests. They must have to ensure and practice the health protocol and guidelines issued by the

IATF. Hotel Industry are adjusting to the new normal. They must have to focus on cleanliness and

Safety Certifications.

In the near future the researcher foresee the improvements and rising of the Hotel Industry.

This crisis will fuel this merging and acquisition trend, as many operators will look for

opportunities to protect themselves against unforeseen events like this one, and will find better ways

to leverage the economy of scale. Many small and medium operators won't be able to sustain the

crisis either, and they may become a target of large management companies with the cash and

resources to navigate the crisis more successfully. Hotels will carefully evaluate any redundancy in

their operations and will take this opportunity to make opportunistic changes. hotel companies

would be more aware of pandemic risks, and they may try to get a better handle on fixed costs.
 CONCLUSION

Coordinated Supply Chain Management is a Big Help to the Hotel Industry here in Ormoc

City. It provides a great opportunity not only to the owner of the hotel but also to the employee of

the hotel. It can also help the economy of the country and contribute to such development. It allows

to decrease the inherent risk when buying materials and selling product services. It also help the

hotel industry give individual hotel companies a sustainable competitive advantage. The use of a

Coordinated Supply Chain Management helps not only to the quality and service of the hotel

company but also drive down cost or expenses of the hotel industry here in Ormoc City.

Hotel Industry were the main industry that was affected by the pandemic but the best side is it

is now operating with the help of the local government and the guidelines issued by the IATF. In

the near future Hotel Industries will be one of the booming businesses in the market considering its

competitive advantage and demand for services. As what Rebecca Gallagher from Historic

Smithton Inn said “Even though this terrible thing happened, (pertaining to the pandemic) there’s a

sense of hope that 20 years from now, something good will have come of it”
 RECOMMENDATION

The hotel Industries in Ormoc City:

1. Find better alternative ways to improve the hotel services depite the challenge of the current

pandemic.

2. Ensure cleanliness and safety health measures and ptotocols issued by the IATF.

3. Give the Customer the satisfaction for the products and serbices that they offer

4. Create a proper system to motivate people towards the hospitality industry like create a

department to consult for trained staff.

5.Create the entrepreneurship concept and the going concern assumption for the Hotel Industry.

To the Hotel Employees

1. Be aware and build the knowledge about Hospitality Industry.

2. Create awareness and socialize with Hospitability.

3. Improve the self capabilities.

4. Manage your time wisely

5. Commitment to the job and career in the Hotel Industry.

To Hospitality Students

1. Build the foundation of Hospitality Industry through learning and training.

2. Know the institues offering Industry Related Courses.

3. Manage your time and Understand the significance of the career in Hospitality Industry.

4. Be aware of your self capabilities and improve them so to be your strength in the near future.

5. Apply the knowledge learned and be passionate about your career in Hospitality Management.




 REFERENCES

 Bechtel, C., & Jayaram, J. (1997). Supply chain management: A strategic perspective. The
International Journal of Logistics Management, 8, 15-34.
 Brown, S., & Bessant, J. (2003). The manufacturing strategy-capabilities links in mass
customisation and agile manufacturing–An exploratory study. International
Journal of Operations & Production Management, 23(7), 707-730.
 Chopra, S. & Peter M. (2004). Supply Chain Management. 2 ed. Upper Saddle River:
Pearson Prentice Hall
 Clemmer, J. (1990). The Three Rings of Perceived Value. The Canadian Manager,
15(2), 12-15.
 Cooper, M. C., Douglas M., L. & Janus, D. P. (1997). Supply Chain Management : More than a
New Name for Logistics. The International Journal of Logistic Management, 8(1),
1-14.
 Fisher, M. L. (1997). What is the right supply chain for your product? Harvard
Business Review, 75(2), 105-116.
 Ketchen G & Hult, M. (2006). Bridging organization theory and supply chain
management: The case of best value supply chains. Journal of Operations
Management, 25(2) Pages 573-580.
 Lee, H. L. (2002). Aligning supply chain strategies with product uncertainties.
California Management Review, 44(3), 105-119.

 Key 7 Advantages and Benefits of Supply Chain Management | AIMS UK

 www.sbsandco.com
 The Future Of The Hotel Industry After COVID-19 | Seeking Alpha
 COVID-19 hit the hotel industry hard. Here’s how hotels are pivoting in the
new reality - MarketWatch