GLOBAL SUPPLY DURING COVID-19

Procurement of FF&E and OS&E will become more challenging post COVID as we face challenges with supplier stability, increased cost of logistics, and restrictions in availability of material. We need to be prepared to tackle these issues:

Know your supplier's strengths. Give them the right scope of work and know if they are outsourcing any part of your order. Have disclosure on what is being outsourced and to whom.

Spread requirements amongst several suppliers to minimize the risk of financially overburdening any one of your suppliers.

Set payment terms which allow suppliers to be compensated in a way that helps them manage their cash-flows and while keeping your supplies being delivered. Ask your suppliers for transparency on their onward payments to their supply chain.

Allow more than enough time. With all suppliers and manufacturers controlling their costs, we can expect their inventory levels to reduce and lead time for deliveries to increase. Hospitality logistics are a challenge with less frequent movement of sea cargo and increased costs for air freight. The longer you allow for production, freight and delivery, the less risk you expose yourself to delays in material. Add in a provision for warehousing as it is better your material is waiting for you instead of the building waiting for your material.

Investigate new supply sources. There are countries which have in-country access to raw materials, strong workforce, and excellent manufacturing capabilities. We will see governments introducing incentives such as duty waivers when sourcing and importing from particular countries. Look locally for manufacturers and help support the local economy.