The Lalit Ashok,

Bangalore

Mayank Kapoor (501)

Saumya Agarwal (504)

Lokesh Lochav (505)

 Introduction
The LaLiT Ashok Bangalore is centrally
located in Bengaluru city, adjacent to an
18 hole golf course.

It operates 184 rooms and suites and

offers over 59,000 square feet of
conference and banqueting space for
both indoor and outdoor events.

The LaLiT Ashok Bangalore operates four

restaurants, namely, 24/7, KittyOKO,
Baluchi and Sutra The Lounge which
offer various cuisines and a bakery, The
Lalit Boulangerie. The LaLiT Ashok
Bangalore won the best convention
hotel, India award in 2013 at the
International Hotel Awards for Asia
Pacific hotels.
 Supply Chain in Hospitality Industry
The nature of the tourism
product is perishable and must
A smooth running supply First step in SCM must
be consumed when it’s ready
chain can help be breakdown each and
to be served, thus hotels have
organizations to acquire a every activity which
to provide services
sustainable competitive comes across the whole
simultaneously with demand. supply chain.
advantage.

Supply chain analysis

Services are considered promotes reducing non-core
to be most perishable processes and synchronization
items. of the supplier and logistics
network.

This industry is primarily From a financial point of

service oriented; other view, improvement in supply
product involving activities chain has potential to
are supportive activities reduce costs with the help of
of the primary. greater operating efficiency

Focus of supply chain should shift from functional and independent to general and integrative.
 Role of Supply Chain Management

Strategic Level Operational Level

1 The Lean Paradigm 1 Cost of Transaction

2 The Agile Paradigm 2 Cost of Product Procurement

3 The Resilient Paradigm 3 Cost of Inventory

4 The Green Paradigm

 • Vegetables and fruits or some of the kitchen items have
a short shelf life and require repeat purchases
• Low Value and High Volume Products.
Operational Level

• These products increase the Transaction Costs.

`
Cost of Transaction

The cost of quality control is minimal when an organization deals

with a small number of suppliers. The cost of quality control goes
down even further when the supplier relationships are strategic in
nature. The hotel industry is characterized by large number of non-
strategic suppliers, thereby increasing the cost of quality control.

The LaLiT group has an ARA (Annual Rate Agreement) with

the suppliers which ensures same rate of the products
throughout the year. This agreement keeps a check on all the
transaction costs.
 Operational Level
Cost of Purchase

Cost of purchase in a hotel can be up to one fourth of total sales,

depending on the type of hotel. Hotels have a tendency to
purchase too many Stock-Keeping Units (SKUs) for the same
purpose. This includes alternate brands, pack sizes or
substitutes. This has a direct negative impact on consolidation
benefit, increase in supplier base, and a consequent increase in
overall cost structure of the supply chain

The LaLit group orders standard SKU’s for all its hotels and
buys in bulk, thus getting a better price. Also, agreement
with suppliers state exact specifications and price which
reduces the cost of purchase and increase supply chain
efficiency.
 Forecasting the material consumption based on forecasted
occupancy of rooms is usually not very well managed. The lack
of an interface with the sales and purchasing system is the
Operational Level

major reason for poor forecasting.

Cost of Inventory

However this issue can be addressed most effectively by

using IT and thus providing an interface where sales people
can share the sales made on real time bases so that
purchase department know how much to procure

The LaLiT has certain standards for keeping inventory. There is

almost zero inventory for the kitchen items. Stock of 15 days for
other grocery items and stock of one month for stationary items
and other items like soaps, shampoos etc.