It's sometimes easy to forget how much success in hospitality depends on inventory management. But in this diverse and fiercely competitive industry, you need to carefully track and control everything. From the spoons and forks at the continental breakfast to all those little bars of soap. From this week's delivery of prime rib to all those little packets of ketchup. And then there are all those rooms. But with the right technology, you can manage every type of inventory, save time, and cut waste.
Hotels and inventory management software
Let's narrow down our topic a bit and look specifically at inventory at hotels, which is actually a big topic all on its own. The right software solution makes everything run more smoothly.
Stopping loss and theft
More smoothly? Well, not for everyone. Efficient inventory tracking makes life harder for people with sticky fingers, and sadly, there are a lot of them. The American Hotel and Lodging Association back in 2000 suggested US hotels lost upwards of $100 million a year to theft. And in a 2004 study, Orbitz found 18% of around 2,700 respondents admitted to taking towels, 14% admitted to taking ashtrays, and around 2% took bathrobes. But how can software fight loss and theft? With accurate, real-time tracking. Once you know what you have and where you have it, it's a lot easier to notice when something is missing. And traditionally, hotel bandits are banking on the fact that they'll be long gone before you figure out they've liberated some of your towels. In cases where the culprits are your own staff, it's the same mentality: by the time you notice a ton of shampoo bottles have disappeared, the trail's gone cold.
Because they have so many different types of inventory, hotels end up working with a lot of different vendors. There's a different one for everything from the classic little bars of soap to the fruit for the continental breakfasts.
When you have a lot of different vendors, each with multiple types of inventory and timelines, inventory management software takes all those moving parts and builds a well-oiled machine.
One way it does this is by taking the guesswork out of ordering. The software tells you when it's time to restock, and then helps you place an order. Remember, one of the software's core features is real-time inventory tracking, which means you always know exactly how much you have of something. Once something hits a customizable minimum level, the software alerts you and helps you set up an order.
Another way is by letting you leverage historical data inside the software to choose the best vendors. There's more than one company that stocks instant coffee pods, but the challenge is finding the best one. By looking at historical lead times and prices, you can make data-backed decisions about which vendors to stay with and which ones to leave.
For hotels, inventory also covers the rooms they have available to rent, with a whole art and science behind getting the best yield out of your available space. Inventory management software helps here, too.
Understanding behavior and sharing insights
With a general trend toward shorter and shorter lead times for bookings, having a better understanding of customer behavior helps you with yield management. You can look at not only when people are booking but also through which channels. And understanding distribution tells you where to utilize spare rooms for promotions. Because your inventory management software is backed with historical data, it's easy to go back and see where bookings are coming from and how much each channel is producing.
Centralized demand management
The trend now is for integration, where software platforms share information, transforming data into insights and insights into action. Let's say your inventory management software knows you're going to be hitting close to 100% occupancy this coming Friday. On Monday, it shares that information with all your other software platforms, which check the levels in the lobby cafe coffee machine. Based on past data, the software knows (because you have already set up min and max levels based on occupancy rates) that you're going to run out of instant coffee pods, and send you an email alert.
Choosing the right inventory management system
It’s important to look at the size and scale of your organization when choosing an inventory management system. Here are some questions you'll need to answer:
Can the software be customized to meet your specific needs?
Can it track spending?
Is it scalable? Can it grow alongside your organization?
Using the right technology to help manage inventory in the hospitality industry boosts overall productivity and revenue. Once you've got the system up and running, you're on your way to a permanent holiday from hassles.
You can further explore this topic with 5 Steps to find the right Inventory Management Software for your Business.