The Challenge

Starwood Hotels is a leading global hotel group.  Procure4 were asked to look at an annual contracted spend of $40 million across center of plate food categories.

The company had issues around inconsistent formula pricing across comparable items. There was variation regarding the following criteria; local and national market, contract and term expiration, poor compliance through preferred vendors and significant off-contract spend.

The Approach

The first step was to establish spend levels across the national business. Procure4 also conducted property ownership mapping.

We recommended the creation of streamlined formula pricing through national suppliers of core items with clear specifications by market.

The Results

By using competitive bid techniques and negotiation, new contracts were awarded and implemented.

Overall aggregate cost reduction was 10% and compliance increased through contract pricing. The property mapping exercise gave far better visibility of activity and specification utilization.

Overall, thanks to the significant savings, the rationalized supply base and product range, the streamlined formula pricing and improved compliance, increases in efficiency and profitability have been made.