Posted On July 12, 2021
Hotels, like Rome, aren’t built in a day.
The development and renovation of a hotel can take months or even years, with epic budgets, large teams, and numerous suppliers and shipments to manage. In addition to any construction, the process includes ordering furniture, fixtures and equipment (or FF&E), coordinating supply chain transportation and storage, and overseeing installation. An in-house team at the hotel’s parent company will often manage the project’s logistics, either alone or with help from a procurement company and third-party logistics partner.
Of course, we’re a bit biased, but that last part is important. Working with a 3PL to manage hospitality logistics can streamline the project, making it more cost-effective and freeing up time for in-house teams and the project leader to focus on other issues.
But whether they’re working with a logistics services company or not, hospitality teams can implement several best practices to finish projects under budget and on time. And as the pandemic improves in the United States, that’s never been more important. The hotel industry is seeing a resurgence, and the influx of cash will allow for more construction and renovation in the near future. If you’re looking ahead to renovations or a new development project, our team shared suggestions to get the best results.
Project management tips for the hospitality industry
The project is underway. The design has been finalized and FF&E orders have been submitted—now comes the fun (and sometimes hectic) part. Keep these tips in mind to improve the process and start hotel operations off on the right foot.
Make sure you have visibility into shipping (and don’t rely on the manufacturer to ship).
After you (or the procurement company) submits the purchase order to the manufacturer, there’s typically a long wait before anything gets shipped. Throughout the process, you’ll want to keep tabs on it, and visibility is key. A hospitality logistics partner should take care of this for you, providing timely (and sometimes automatic) updates on order status and where the shipment is in transportation.
For example, if our client orders 500 headboards, we’ll communicate with the manufacturer on estimated lead time, following up monthly and sometimes weekly and sending updates to our client via our logistics project management software. We’ll also coordinate transportation to ensure the client is getting the best rate and optimal shipping time for their project needs.
The alternative, where the supplier coordinates the transportation logistics, might sound easier. But since manufacturers don’t typically have carrier rate tools, it’s usually more expensive. You also risk losing control of timelines, and visibility is often limited.
Plan the supply chain transportation ahead of time to take advantage of slower—and less expensive—options.
Once you have a general idea of when the furniture or fixtures will be ready, start arranging the transportation immediately. Planning upfront allows team members to be more selective with what mode or lane they choose. Ocean freight or certain rail lines can cost a fraction of other options, as long as the project timeline can allow for longer transportation and stay on schedule for hotel openings.
Utilize warehousing to keep costs low, even though it might sound counterintuitive.
This is one of the most common pieces of hotel logistics advice we give to clients, because it works. Often, companies in the hospitality industry will try to avoid storing furniture and fixtures in a warehouse because of the added cost. But when done strategically, it can actually improve the bottom line.
Incorporating warehousing in the hotel logistics supply chain can act as a safety net for construction delays—and there are almost always delays. With materials safely stored in a warehouse ahead of time, hotel owners and the operator don’t need to scramble to find last-minute storage at a higher price, or worse, store the goods at the construction site where they’re more likely to get damaged.
Another common scenario involves hotel logistics teams trying to coordinate delivery directly to the hotel on the exact day it’s need. But too often, transportation is delayed, and the crew of people hired to move and install the materials still has to get paid. Either way, skipping warehousing often leads to wasting money.
When delays happen, make your logistics partner do the legwork.
Any construction or hotel logistics professional knows—delays are a fact of life. When one occurs, you’ll need to notify a lot of people to make sure every involved party can adjust. Working with a logistics solutions company makes this easy, because they manage the communication and coordination for you. Otherwise, you’ll need to let everyone know yourself, potentially making phone calls or emails to dozens of suppliers and developers.
Perform quality assurance at each step in the supply chain.
Furniture and other materials take an impressive journey before they reach the guest rooms and there are a lot of opportunities for damage along the way. (We’ve heard horror stories about everything from couches that are the wrong color to devastating rain damage.) Quality assurance checks at each stopping point can spot issues before it’s too late, so make sure to perform QA throughout the process—or have your 3PL do it for you.
Another benefit of using a 3PL for this? All the liability is on them. If a shipment of beds, for example, gets damaged somewhere between the manufacturer, the warehouse and the hotel site, none of the parties will want to take responsibility, and navigating the claims process without a 3PL will be a nightmare. But when you engage a logistics solutions company to handle all of those aspects, they’re responsible for everything, so they’ll take care of the claim.
Train your general contractor on delivery sign-off processes.
After it’s traveled across the world, there’s nothing worse than equipment or furniture being refused and sent back once it reaches its final location. Typically this happens because a contractor without hotel industry experience doesn’t understand the consequences of not accepting deliveries. (And having to pay for return shipping, and then for the items to be shipped back yet again, is never budget-friendly.)
Make sure your general contractor has a strong understanding of what items should be signed for when, and how to sign for items. (For example, they should never sign for the product with “subject to inspection.”) They should inspect deliveries closely and note any issues on the delivery receipt to avoid any claims headaches later on.
Use a professional FF&E installation team instead of just movers.
We’ve worked with many clients who rely on movers to both unpack and install the furniture and fixtures—and then deeply regret it. A professional installation team with hospitality experience is more skilled and knowledgeable about setting up hotel rooms than general movers. You’ll have fewer issues and ensure the results meet your satisfaction.
Getting help with FF&E and logistics services
Working with a hospitality logistics company will make planning and execution easier. But sometimes finding the right logistics solutions company can be a challenge. Keep these in mind when considering a potential partner:
Look for detailed, a la cart pricing from prospective hospitality logistics partners.
All projects are different, so be wary of any business that provides an estimate for your project without asking for specific details. Giving a lump sum estimate, without breaking down the prices for specific services and solutions, is also a warning. In both situations, read the terms carefully to avoid getting nickel-and-dimed with hidden fees later on.
Avoid using third-party hotel logistics partners with their own procurement companies.
Some third-party logistics services companies might also offer procurement as a service, which can sound appealing. But whether you’re part of an in-house management team or a procurement professional yourself, you should be careful with sharing details to prevent a conflict of interest. Make sure to ask prospective logistics solutions partners whether they have procurement teams of their own to make an educated decision about each project before signing on to work with them.
Look for a hospitality logistics team you can trust and form strong relationships with.
Communication is vital in logistics management. A dedicated customer service or account representative at your 3PL is key. As your main point of contact, they can share expertise and offer the assistance needed to keep the project running smoothly. This will also ensure you have a go-to support person to address a range of issues that might pop up.
A third-party logistics company with experience handling hotel logistics can make construction and renovation much easier. If you have questions about Flat World’s hospitality logistics services, Hive, our project management software, or how your hotel supply chain can be improved, let’s talk! Contact us to get started.