Swissôtel Finds Solution to Inventory Control

hotel cuts costs with inventory management system

When Eric Wylie came aboard as Engineering Director at Swissôtel in Chicago, he immediately recognized the need for a better inventory management system. The 800,000 square-foot facility with its 661 luxury guest rooms is in constant motion, with employees and guests coming and going 24/7. It’s critical to have the items his engineers need to immediately fix anything that breaks.

In addition to hundreds of guest rooms, Eric’s Chief Engineer and team of 14 is also responsible for maintaining the rest of this four-diamond hotel, which includes two restaurants and a lounge, lobby areas, meeting rooms, reception halls, gift shops, a fitness center and spa, and a pool.

 

Hotel guests are paying for these amenities as part of their stay, and everything must be fully operational and in excellent working order at all times. For this reason, it’s critical for hotels and other hospitality businesses to have the repair tools and supplies they need immediately available in inventory so they can keep their guests happy and their business thriving.

What Happens if Something Breaks?

The most common repair at Swissôtel is replacing a burned-out lamp. So let’s say, for example, that a specialty lamp or night light in a guest room goes out and cannot be located in inventory. Here are a few common ways to address the situation:

  • Find an unoccupied guest room and borrow the same lamp to replace the burned-out lamp in the occupied room (You still need to replace the lamp in the unoccupied room.)
  • Ask someone on the engineering team to go online or start calling around to find that specialty lamp. Once a supplier is located, someone runs out to get it (This can take hours, and there’s a good chance you still won’t find the right lamp.)
  • You opt not to fix the lamp until your order for replacements arrives. This guest will just have to go without (This is a bad experience for the guest and possibly damaging to the hotel’s reputation.)

What Are You Really Spending for Your Inventory Management System?

“We’re not paying our engineers to hunt through catalogs to track down tools and drill bits,” Eric says. “We’re paying them to fix things. Any idle time spent looking for stuff is wasted time that adds to our labor costs. One-off purchases are expensive and inefficient, which also drives up inventory costs. The worst part is, when my guys aren’t on the job, there are unresolved problems in the hotel that affect our guests.”

The best solution, it seems, is to always have exactly what you need on hand the moment you need it–all the time. And that’s not easy.

“At any given time,” Eric tells us, “we weren’t really managing our inventory and we didn’t always know how much (if any) of a particular item we had on hand. We also didn’t know exactly how much we had invested in inventory. When we needed something, we would just order it, so our costs were extremely high.”

Cutting Costs with Inventory Outsourcing

To cut the costs associated with managing inventory for large facilities such as Swissôtel, many facility managers outsource maintenance and repair services to building management firms. This can be a workable solution if your building operates during the day. For the hospitality industry, however, it’s not really feasible. Hotels operate 24/7, so you need the people and resources available immediately if something isn’t working.

One possible solution is a vendor-managed inventory program. Vendor-managed inventory is the practice of outsourcing the stocking of your inventory to a specialized service provider. Typically the vendor sends a sales representative to your facility to install their own onsite inventory management system that tracks how much inventory you use in a given time period. They then set up a regular maintenance schedule to replenish your inventory, and can also provide reporting to help you budget and forecast your needs.

The ultimate goal for installing an inventory management program is to ensure you always have the items you need when you need them and to know exactly how much you are spending. Unfortunately, not all vendor managed inventory programs help accomplish this goal.

Prior to working at Swissôtel, Eric had some experience dealing with inventory management issues. At his previous job, a vendor-managed inventory program seemed like the perfect solution to help control costs and figure out just how much inventory was needed. He had also hoped it would help with budgeting.

“The problem I ran into,” he says, “is that many of these operations specialize in a narrow category of items, like fasteners, for example.” But what about everything else a facility needs to operate day-to-day? The other problem he noted was that “a lot of these programs are managed by sales guys who are commissioned, so you end up having to order stuff you really don’t need, which doesn’t save any money.”

What’s the Right Inventory Management System for Your Needs?

After going through some trial and error, Eric found KeepStock®, a suite of Grainger inventory management solutions that helps him address his specific needs for Swissôtel.

“It’s completely tailored to the hotel, so we only stock what we actually use.” I can also see what we’re spending, and there aren’t any upfront installation costs. Some of the more common items Swissôtel uses in their KeepStock Inventory Management program include specialty lighting, batteries, drill bits, filters, belts and other consumable products. Over the past few years since they have installed the program, Eric says his Chief Engineer has cut his time managing inventory by 50%. “Now he can focus more on keeping the rooms in [excellent shape] and the guests happy.”

Where Should You Begin?

When looking for your inventory management solution, consider the following:

  • Inventory management systems should save you time, money and space.
  • Don’t consider any service that requires you to purchase supplies you don’t need.
  • Consider a program that’s customizable to products you specify.
  • Make sure your inventory management system tracks spending.
  • Have an adoption plan. Seasoned professionals develop a systematic way of getting their jobs done over the years and changing habits can be a challenge. Make sure you have a plan for getting everyone on board.
  • Don’t consider any program that requires a big investment upfront. It shouldn’t cost you anything more than the inventory you are buying to invest in an inventory management service.
  • Your inventory management system should be flexible to your changing needs.

Every facility has its unique set of circumstances that impact inventory management. If you’re having a hard time getting a handle on your inventory, rest assured, you’re not alone. Inventory management is an ongoing challenge–no matter what type of business you’re in.

Learn more about Keepstock® – A Managed Inventory Solution.

Source: The content in this article is based on an interview with Eric Wylie, a Grainger customer.