From the goods at your grocery store to the parts for your car, there’s very little in life that isn’t dependent on a fully functional supply chain.
The fragility of a supply chain becomes front and center when you’re the one making sure it’s up and running. Supply chain management is full of the unknowns -- be it product delays, material-sourcing issues, or even a global pandemic.
Like other industries in 2020 and 2021, hospitality supply chain management was pushed to its limits thanks to the global implications of the COVID-19 pandemic. While restrictions are slowly lifting and entire economies are back up and running, the hospitality supply chain is poised to face many of the same issues in 2022.
Unfortunately, there’s no silver bullet to eliminate all the post-COVID “new normalcies” of supply chain management. There are, however, ways to limit their impact on your hotel FF&E (fixtures, furniture, & equipment) procurement.
And that starts with your planning efforts today and having the right level of expectation for the next year.
FF&E Hospitality Supply Chain Management Issues to Plan for in 2022
Supply chain management is a challenge in any industry. Add in the ongoing impacts of the COVID-19 pandemic, and the hotel furniture supply chain management process becomes even more complicated.
When developing your hotel supply chain strategy for 2022, there are few key factors to include in your hotel casegoods purchasing plans:
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Budgeting
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Production lead times
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Delivery schedules
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Safe materials standards
1. Budgeting
While financial planning isn’t typically part of supply chain management, your FF&E budget is likely going to be pushed to its limits in the next year, just as it was this year. Whether you’re building a brand-new hotel or renovating your lobby’s coat closet, budgetary considerations should absolutely be a part of your 2022 hotel supply chain strategy.
Why?
Things just cost more now -- hotel FF&E included.
Price increases are being driven by two key factors:
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Materials: Supply chains of all types came to a near-standstill during the pandemic. (Most are still operating at reduced capacity.) With a limited flow of materials and goods, the laws of supply and demand came into play, pushing end-product prices up.
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Labor: Decreased availability of manufacturing materials coupled with workplace occupancy regulations to slow production across a host of industries. Many manufacturers have a deep backlog of orders they’re still working to fill. Labor shortages only compound production rates more. The laws of supply and demand again come into play, but in a different way. When there are fewer workers to fill orders, consumer prices go up.
The best way to limit supply chain management’s impact on your 2022 financial plans is to budget more, twice. Not only should your FF&E budget be increased by at least 15%, but your FF&E reserve should go up by the same amount, too.
2. Production Lead Times
During the next year, expect order fulfillment to be much longer.
Why?
The same reasons why your FF&E budget needs to be higher.
With raw materials in shorter supply and fewer people to build your order, producing your FF&E is going to take longer.
As we’re seeing, lead times for hotel casegoods orders of all types are the longest they’ve ever been. What used to take weeks now takes at least 2 months.
In hotel construction and renovation projects, timing is everything. One delay in any link of your supply chain can translate to a costly project setback. To create a realistic production timeline, work with an experienced hospitality contract furniture manufacturer.
3. Delivery Schedules
Another major element of hotel FF&E procurement is receiving your order.
As with production, you should anticipate it taking longer to transport your order from the factory to your doorstep.
Why?
Just like on the manufacturing side, there’s a labor shortage. Shipping companies, courier services, and even manufacturers with in-house delivery services are having a hard time finding drivers. This supply chain challenge probably won’t improve anytime soon -- industry experts anticipate driver shortages for at least the next 5 years.
When discussing your hotel FF&E order with your hospitality furniture vendor, ask about shipping. Making delivery arrangements before your casegoods are made can make all the difference in keeping your project within budget and on schedule.
4. Domestic Vs. International FF&E Sourcing
While international trade is getting back on its feet, it’ll likely be some time before it’s back to normal. Many of the classic pitfalls of international outsourcing are now amplified:
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Long lead times
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Slow communication
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Tariffs
Partnering with an FF&E or hotel furniture manufacturer in the USA eliminates the supply chain management headaches of working with a foreign company.
Why?
A domestic FF&E vendor isn’t located overseas or in a far-off time zone. It’s also not subject to the various inspections, taxes, and fees of international trade.
What’s more, a domestic manufacturer is subject to the same public health and safety rules and regulations as your hotel is -- something guests are very conscious of now. In other words, there are no competing standards to overcome.
Meeting 2022’s Hospitality Supply Chain Management Issues Head-on
Though the upcoming challenges for hospitality furniture supply chains are looking like a facsimile of the last 2 years, you can limit their impact on your project.
The best time to prepare for post-COVID supply chain management is now. Through proper planning and selecting the right FF&E partner, hospitality logistics can go smoothly, even today.
Set the Stage for a Successful Hotel Casegood Project
To keep your project on track, download the Custom Hospitality Furniture Production Timeline for Scheduling, Planning, and Tracking:
