Supply Chain Management

6

Service Purchasing at the S u nny H otel 1

Company Background

The Sunny Hotel/Spa & Wellness Resort is well known in Izmir, Turkey. Founded in 1995, it started as a family-owned business and has dramatically expanded especially during the recent five-year period. It has grown at the rate of 200% during the period of 2000-2006. Mr. and Mrs. Gunes, owners of the hotel, stated during an interview in 2006 that the secret of their success is: We believe that we have a different point of view than that of our competitors. Our focus is on our core competency in providing hotel management services. Although it can be difficult to determine one’s core competencies and boundaries of a company in the tourism sector, success of the business enterprise depends on this point. Functions that are not in one’s core competencies should be examined for outsourcing to other firms. Recently the Sunny Hotel’s owners have thought about outsourcing critical services. The tourism sector has been rapidly expanding the flow of hotel management services; this flow has become more significant than the materials flow management for us. Mr. Gunes has remarked that purchasing has turned into more of a strategic function for the organization, especially in recent years. Although traditionally materials flow is accepted as the core flow that should be managed effectively along the supply chain, the reverse—i.e., that of the management services flow—has become a more logical benchmark for many service companies in the current environment. Services firms that are being managed as members of services-oriented supply chains are ones that are successful. Therefore, the services flow is treated as a focal point, i.e., the main flow that should be properly managed by service companies, whereas the flow of materials supports service management for the tourism services sector. Such an aspect and point of view has been embraced by the company since the arrival of the new purchasing manager, Mr....