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RESEARCH IN BRIEF

How do supplier relationships contribute to success in conference and events management?

Susan M. Ogden and Eileen McCorriston
Glasgow Caledonian University, Glasgow, UK
Abstract
Purpose The aim of this paper is to report the ndings from a survey of UK conference and event managers, which highlights the benets that can accrue from supplier management within this sector. Design/methodology/approach A survey of venue managers covering a cross-section of venue types was used. Findings A signicant proportion of venue managers report having long-term supplier relationships, placing considerable value on the non-nancial benets that can accrue from long-term supplier relations featuring mutual trust and good working relationships. These include consistency, responsiveness and exibility in service delivery. Additionally, the familiarity of regular suppliers with the venue and its procedures, can lead to seamless service delivery to the customer and free-up venue managers time. Research limitations/implications The research design provides a one-sided view of supplier relationships. Practical implications Attention is drawn to the performance benets arising from building supplier relationships and offers guidance as to how these can be sustained by avoiding the pitfalls on long-term relationships. In doing so, the ndings legitimise the importance of taking non-nancial considerations into account when awarding or renewing supply contracts. Originality/value This paper applies lessons emerging from research on supplier relationships to a growing, but under-researched, sector of the hospitality industry. Keywords Supplier relations, Quality management, Supply chain management, Conferences, United Kingdom Paper type Research paper

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Introduction The MICE (meetings, incentives, conferences and exhibitions) sector within the UK is experiencing increasing competition due to an expansion in the number and range of facilities operating in the market (see MRU, 2000). This paper argues that supplier management can be a key ingredient in improving the performance within the sector. The sector is supported by a wide range of suppliers providing services such as security, transport, technical support including AV services, crewing and exhibition design, as well as marketing promotion and business support. As is shown in Figure 1, it is the job of venue management to ensure that suppliers, some of whom come into direct contact with customers/conference participants, provide the level of support

International Journal of Contemporary Hospitality Management Vol. 19 No. 4, 2007 pp. 319-327 q Emerald Group Publishing Limited 0959-6119 DOI 10.1108/09596110710747652

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Figure 1. The relationship network in conference and event management

required by clients and venue managers. The aim of this paper is to report on ndings relating to venue managers experiences of supplier management in the industry. Supply chain management, and its close association with total quality management and business excellence models all emphasise the business benets of developing relationships with suppliers and external partners. A study of business-to-business buyer-supplier relationships reports that two of the top three ranked benets are non-nancial, with exibility ranked rst, followed by lower costs and then stability (OToole and Donaldson, 2002). Key to realising non-nancial benets is reported to be the human resource elements of supply relationships (Koulikoff-Souviron and Harrison, 2006). These benets are particularly visible when suppliers are delivering services that involve frequent inter-organisational contact, rather than a single point of contact in the exchange relationship (Koulikoff-Souviron and Harrison, 2006). Supply contracts for services, particularly those which may involve end-customer/supplier contact as in the conference and events industry fall into this category. For example, Hinton and Tracey (2003, p. 18) argue that in the meetings and conventions industry that individual transactions have a cumulative effect on the overall evaluation of service quality. Given that service quality issues have been ranked by industry panel members as of prime importance (Weber et al., 2003), it can be argued that supplier management is an important source of competitive advantage in conference and events management. Much of the literature on the benets of supplier management is based on studies undertaken in the manufacturing industry, indeed several studies have shown that within the service industry supplier relationships are judged to be of less importance (Huq and Stolen, 1996; Silvestro, 1998). An exception to this is a study by Dean and Terziovski (2001) which found that although the extent of supplier partnership is rather low, service organisations involving suppliers in system change and development performed signicantly better in nancial terms that those which do not involve suppliers in quality practices or performance improvement initiatives. Positive benets of supplier management have also been reported in the retail sector (e.g. Sheu et al., 2006). Within the tourism, hospitality and leisure management

literature, there is little published research on the extent to which relationships with suppliers are perceived as an important element in organisational quality or operations management strategies, except in relation to food supply chain management. Eastham (2001, p. 80) in her study of food supply chain management, found that the potential advantages of partnering relationships with suppliers include: . easier management due to a reduced number of suppliers; . less time spent searching for new suppliers and tendering; . reduced inventory; . more stable prices supply; and . better quality as a result of increased supplier involvement. More recently, however, a study by OConnell et al. (2006) focus on hotel buyer criteria in relation to food suppliers, provides an insight into the broad range of factors important to hotel purchasers, including the quality of the products on arrival, price, on-time deliveries and ability to provide emergency deliveries, but does not report on the extent to which purchasers are interested in developing the relational aspect of the transaction. Other studies in the sector have focused on outsourcing within the hotel guez and industry (Hallam et al., 1996; Hemmington and King, 2000; Espino-Rodr n-Robaina, 2004; Lam, 2005; Lamminmaki, 2005). Padro In order for the business benets discussed above to arise it is suggested that managers should focus on developing factors such as: a common vision; a sense of intimacy based on closeness, sharing and mutual trust; a focus on delivering results (rather than control); and the joint development of processes or procedures in relation to service delivery and monitoring (Rogers, 2005). Thus, a high degree of trust is placed in the supplier, with the client or purchaser (or venue manager) passing an element of discretion for how the task is performed to the supplier. Thus, such relationships are likely to be more egalitarian, emphasising togetherness and sharing of responsibility, consultation and co-operative decision-making between the parties, and well-developed lateral communications. Nevertheless it is acknowledged that a degree of separateness is healthy to ensure that the relationship retains its vitality (Koulikoff-Souviron and Harrison, 2006, p. 90). Notwithstanding these prescriptions, the difculty in avoiding antagonistic relations should not be under-estimated (see Emiliani, 2003). Research design The paper reports on ndings from a survey of venue managers within the UK conference and events sector. Data is presented on venue managers attitudes to supplier management, including contract award criteria, and the perceived barriers and benets to building supplier partnerships. Given the lack of current evidence relating to supplier management practices in the conference and events sector, the survey aims to provide a baseline for further research. A database of 1,000 conference venues throughout the UK was rst constructed, selecting organisations from across the UK using a variety of venue nding internet sites[1]. To ensure geographical spread venues were also taken from national tourist board information on events venues in Scotland, and for Northern Ireland. The database is stratied into sub-sets using four main venue classications: purpose built; multi-purpose; educational,

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mainly universities and colleges; and unusual venues (e.g. football clubs, museums and galleries, theatres, racecourses, heritage buildings/castles, visitor attractions). The high proportion of unusual venues included in the sample is in reection of ndings from the BACD British Conference Venues Survey that in 2002 unusual venues account for around 27 per cent of all conference venues. The self-administered postal questionnaire was piloted to 60 venues from across the specied classications, with full distribution to 940 venues taking place, after some adjustments to the survey instrument, in April 2005. The main survey returned 151 fully-completed questionnaires by the set deadline, giving a 16 per cent response rate, evenly spread across the four categories of venue. For example, unusual (40 per cent), multi-purpose (32 per cent), educational (15 per cent) and purpose built (12 per cent). This response rate compares favourably with that recorded in other surveys on outsourcing (for example, the 8 per cent response rate reported by Beaumont and Sohals (2004) study of outsourcing in 2000 Australian organisations). As a key factor affecting the reliability of the data is the knowledge of the person completing the survey, all survey respondents were asked to provide contact details and job titles, enabling analysis to be made in relation to the status of respondent. Analysis of the contact details provided by 82 per cent of respondents provides assurance that informed views have been accessed: 23 per cent of respondents work at senior management level (e.g. director, general manager, venue manager); 38 per cent at operational management level (e.g. conference and events manager, head of conference and exhibitions); and 21 per cent in sales/marketing/business development roles. The following discussion presents a brief overview of the ndings, before summarising the implications for practicing managers. Key ndings Business activity The survey conrms that the conference and events sector overall is still growing in the UK with 50 per cent of respondents reporting an increase in the number of conferences/events held, and only 10 per cent reporting a decrease in business for the year 2003/2004. Unusual venues report the largest increase and largest decrease in their volumes of business, pointing to the greater volatility in this sector. Educational establishment reported the least growth in their conference and events business. Contract award criteria Respondents rated the importance of nine criteria that may be considered when awarding contracts to suppliers. The top ve factors are: (1) technical expertise; (2) cost; (3) reputation; (4) prior relationship; and (5) nancial stability. Of less relevance appears to be location, quality accreditation and environmental policies. It is not surprising that technical expertise is rated so highly because a key

reason for outsourcing is to access knowledge or skills that do not exist within the organisation. The high number of respondents coming from unusual venues where conference and event management is not a core part of the business also explains this nding. Four other criteria specied under the other category and ranked as highly important by the respondents adding these factors to the list are: (1) responsive and professional; (2) quality of product; (3) buy-in to our culture; and (4) top-class health and safety. Supplier relationships A very high proportion of respondents, 91 per cent, consider their organisation to have long-term relationships with their suppliers. These venue managers described in their own terms the main benets and drawbacks that accrue from such relationships. Of those answering this question, 90 per cent provided examples of the benets (244 items listed by 130 respondents), while 80 per cent described disadvantages (149 items by 115 respondents) associated with having long-term supplier relationships (see Table I). As shown in Table I, overall managers report non-cost or intangible benets more often than cost or price, which was only mentioned by 18 per cent of respondents. The most frequent advantage described by 46 per cent of respondents relates to benets pertaining from having a positive working relationship. Factors such as inter-personal trust, friendly relations, mutual support, team working and communication/rapport are all included under this category and several respondents clearly stating that such factors led to a seamless operation from the customer perspective. Familiarity, termed here as the they know us factor, was raised by 37 per cent of respondents. The suppliers knowledge of the venue facility and working practices accounts for some of these benets, as does understanding of regular client needs and experience of past events, as these quotes demonstrate:
Suppliers are familiar with standards and working practices and therefore time is saved in explaining requirements each time.
% a respondents Disadvantages (n 130) 46 38 37 21 18 9 6 5 4 1. 2. 3. 4. 5. Supplier complacency Higher cost Purchaser complacency No problems Over-dependency % respondents (n 115) 67 22 18 8 3

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Advantages 1. 2. 3. 4. 5. 6. 7. 8. 9. Good working relationships Consistency Familiarity Responsive and exible Cost benets Re-booking simplicity Security and control Service development and innovation New business benets

Note: aAdds up to more than 100 as some respondents listed more than one factor

Table I. Advantages and disadvantages of supplier relationships in conference and events management

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Over one-third of respondents (38 per cent) described consistency or reliability of the suppliers performance (the we know them factor or we know what were getting factor) as a key benet arising from long-term supplier relationships. In particular, there is a perception that long-term suppliers bring a lower level of risk in relation to the level of service quality that is received. Increased responsiveness and exibility are also frequently given as a benet (21 per cent of respondents). The speed with which suppliers can respond to requests at short notice is felt to be important in this sector because, as one respondent commented, in the conference industry requirements are often last minute. Regular suppliers are also felt likely to be more exible or adaptable and willing to compromise or do favours for the venue managers. Other factors described by respondents include: booking convenience (9 per cent), and security and control (6 per cent); service development and innovation (5 per cent); and new business referrals (4 per cent). Only a very small number of respondents (5 per cent) listed service innovation (e.g. coming up with new ideas, learning from previous events and marking improvements in the next) as a factor. Clearly then, the non-cost benets of long-term supplier relationships are clearly highly valued by many managers. However, while these benets are more intangible in that they cannot easily be measured or reported on, they are likely to improve the efciency and effectiveness of a business operation by freeing up management time and improving service delivery quality. Fewer respondents, only 80 per cent, provided a response about disadvantages arising from long-term supplier relationship and a narrower range of views on the nature of the disadvantages were expressed. The most frequently described problem has been termed supplier complacency, with 67 per cent of those providing a response to this question worrying that standards can slip due to over-familiarity, abuse of trust, or lack of new ideas. Typical respondent comments in this category include:
[. . .] sometimes the supplier feels they can let you down easier than a new client. [. . .] no great effort is made as the contract appears to be secure.

Statements relating to higher costs and lack of competitiveness in prices received the second highest frequency (22 per cent). The third most frequent issue raised as a disadvantage relates to purchaser complacency reported by 18 per cent of respondents. These comments suggest that managers accept that some of the blame for higher cost or deteriorating performance had to be laid at their door for failing to monitor suppliers sufciently or take time to look for more competitive quotes. As one respondent admitted You take them for granted and let things slip. This was a separate concern from over-dependency (either of the supplier or purchaser), where it became difcult to withdraw from a contract when a relationship sours this was only mentioned by a small proportion (3 per cent) of respondents. Implications for practioners The conference and events industry provides an interesting context within which to study supplier management because of the mix of venue type, the challenges of

capacity management in a very competitive sector, and the range of specialist services that can be required by clients. This study suggests that managers operating in this sector, like those in the study by OToole and Donaldson (2002), have a well-developed level of awareness of the nancial and non-nancial costs and benets associated with developing long-term supplier relationships. In particular, they understand that good working relationships with suppliers built up over a number of years is likely to deliver improvements in consistency and reliability of service delivery as a result of an increase in the knowledge, responsiveness and exibility of suppliers. Furthermore, benets relating to quality of service delivery are all cited more frequently than more nancial or cost benets. Not only are advantages reported that enhance quality of the customer (participant)/supplier interface, but also in relation to the freeing up of management time due to a reduction in the need to monitor supplier performance. Nevertheless, many managers recognise that these managerial benets may come at the cost of paying a higher price for supplier services. This higher cost may not be a problem if also accompanied by higher quality, however, the low number of respondents reporting service innovation as a benet suggests that the full nancial performance benets that Dean and Terziovski (2001) report can arise from involving of suppliers in system changes and process improvements, are not yet being realised within this sector. Furthermore, to ensure benets are sustained managers should be aware that, as Emiliani (2003) argues, a degree of separateness is healthy to avoid supplier/purchaser complacency and maintain vitality in the relationship. Given these ndings it follows that managers in this and in other sector of the hospitality and tourism industry should consider the following pointers for successful supplier management: . Management time can be freed up and service quality improved by having suppliers who know your set up, your customers, your staff and your operating systems. . Be aware that suppliers can become complacent if they feel that management are not monitoring their performance. . Set up systems to regularly review supplier performance against internal and external customer satisfaction. . Give suppliers performance improvement goals to work towards. . Involve suppliers in a 360 degree performance appraisal of the organisations systems and procedures, allowing them the opportunity to feedback to the organisation their views about any performance gaps. Help them to help you innovate. . Involve suppliers in any in-house quality assurance activities or frameworks, and, where appropriate, encourage them to adopt quality standards themselves. . Ensure suppliers know that their price competitiveness although reviewed in relation to other contractors, will also be balanced against their performance in relation to internal business perspectives, particularly service quality. In conclusion, it is likely that the specialist nature of many suppliers in the MICE sector makes long-term ties mutually benecial for the supplier and venue manager. This co-dependency provides an incentive for a high level of trust in the relationship to be fostered. Short-term or arms-length contracting modes may simply not be seen as a

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viable or efcient mode of contracting for specialist services where alternative suppliers in the geographic area may be limited. The large number of smaller venues in the study possibly also contributes to the greater emphasis on informality and close-knit relationships. Supplier management practices are also an important feature of an organisations journey to achieving business excellence, which can itself bring useful competitive accolades. For example, in the UK the success of the EICC (Edinburgh International Conference Centre) in receiving the EFQM (European Foundation for Quality Management) award for Business Excellence in 2003, partly stemmed from encouraging suppliers to pursue quality accreditation. Its external supplier of security services was the rst member of the British Security Industry Association (BSIA) achieve ISO9001:2000 accreditation. The ndings presented in this paper suggest that many of the managers in the industry are aware of the benets of working closely with suppliers, despite the fact that they may not formally involve them in quality initiatives. Limitations of the study A key limitation of the ndings is that unlike the research by Koulikoff-Souviron and Harrison (2006), this paper is based on a research design that presents a one-sided perspective on supplier management as only the venue management perspective is researched. It would be interesting to investigate the nature and characteristics of the suppliers in this sector given that company size in the supply market or the level of fragmentation in the supply market would affect the ease or difculty in sourcing alternative suppliers. This would allow observations to be made about the direction and strength of dependency between supplier and purchaser. Clearly, it would be advisable to adopt a case study approach to investigate these issues further.
Note 1. The Association of Exhibition Organisers www.tsnn.co.uk; conference venue nder sites used include: www.venues.org.uk and www.ndmeaconference.com References Beaumont, N. and Sohal, A. (2004), Outsourcing in Australia, International Journal of Operations & Production Management, Vol. 24 No. 7, pp. 688-700. Dean, A. and Terziovski, M. (2001), Quality practices and customer/supplier management in Australian service organisations, Total Quality Management, Vol. 12 No. 5, pp. 611-21. Easthamn, J.F., Sharples, L. and Ball, S.D. (2001), Food Supply Chain Management: Issues for the Hospitality and Retail Sectors, Butterworth-Heinemann, Oxford. Emiliani, M.L. (2003), The inevitability of conict between buyers and sellers, Supply Chain Management, Vol. 8 No. 2, pp. 107-15. guez, T. and Padro n-Robaina, V. (2004), Outsourcing and its impact on operational Espino-Rodr objectives and performance: a study of hotels in the Canary Islands, International Journal of Hospitality Management, Vol. 23 No. 3, pp. 287-306. Hallam, G. and Baum, T. (1996), Contracting out food and beverage operations in hotels: a comparative study of practice in North America and the United Kingdom, International Journal of Hospitality Management, Vol. 15 No. 1, pp. 41-50.

Hemmington, N. and King, C. (2000), Key dimensions of outsourcing hotel food and beverage services, International Journal of Contemporary Hospitality Management, Vol. 12 No. 4, pp. 256-61. Hinton, T.R. and Tracey, J.B. (2003), The service imperative: factors driving meeting effectiveness, Cornell Hotel and Restaurant Administration Quarterly, October-December, pp. 17-26. Huq, Z. and Stolen, J.D. (1996), Total quality management contrasts in manufacturing and service industries, International Journal of Quality & Reliability Management, Vol. 15 No. 2, pp. 138-61. Koulikoff-Souviron, M. and Harrison, A. (2006), Buyer-supplier relationships in inter- and intra-organisational supply contexts: the unobtrusive yet pervasive human resource picture, International Journal of Logistics, Vol. 9 No. 1, pp. 75-94. Lam, T. and Han, M. (2005), A study of outsourcing strategy: a case involving the hotel industry in Shanghai, China, International Journal of Hospitality Management, Vol. 24, pp. 41-56. Lamminmaki, D. (2005), Why do hotels outsource? An investigation using asset specicity, International Journal of Contemporary Hospitality Management, Vol. 16 No. 6, pp. 516-28. MRU (MICE Research Unit) (2000), The Growth and Trends of Conference Centres: A Case Study of the UK, University of Bournemouth, available http://icthr.bournemouth.ac.uk/mice/. OConnell, S., Henchion, M. and Collins, A. (2006), Optimising the service mix for Irish hoteliers: the challenge for small food suppliers, International Journal of Contemporary Hospitality Management, Vol. 18 No. 3, pp. 219-30. OToole, T. and Donaldson, B. (2002), Relationship performance of buyer-supplier exchanges, European Journal of Purchasing & Supply Management, Vol. 8, pp. 197-207. Rogers, P.A. (2005), Optimising supplier management and why co-dependency equals mutual success, Journal of Facilities Management, Vol. 4 No. 1, pp. 40-50. Sheu, C., Yen, H.R. and Chae, B. (2006), Determinants of supplier-retailer collaboration: evidence from an international study, International Journal of Operations & Production Management, Vol. 26 No. 1, pp. 24-49. Silvestro, R. (1998), The manufacturing TQM and service quality literature: synergistic or conicting, International Journal of Quality & Reliability Management, Vol. 15 No. 3, pp. 303-28. Weber, K. and Ladkin, A. (2003), The convention industry in Australia and the United Kingdom: key issues and competitive forces, Journal of Travel Research, Vol. 42, November, pp. 125-32. Corresponding author Susan M. Ogden is the corresponding author and can be contacted at: s.ogden@gcal.ac.uk

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