Starwood
Starwood Hotels is a leading global hotel group with locations across the US.
The Challenge:
Starwood had issues around inconsistent formula pricing, contract expiration, and significant off-contract spend. Procure4 were asked to look at an annual contracted spend of $40 million across center-of-plate food categories to address the challenges.
The Solution:
The first step was to establish spend levels across the national business and the analysis allowed Procure4 to recommend the creation of streamlined formula pricing through national suppliers of core items with clear specifications by market, following negotiation.
The Results:
Overall aggregate cost reduction was 10% and compliance increased through contract pricing.
“Thank you for your support over the last 3 years. From those early conversations we have delivered lasting change and savings in Europe and the US and on the whole you have brought our very challenging operators with you on the journey.”
- Paul Davis, SVP Supply Chain Starwood Hotels & Resorts Worldwide
Starwood
Preview
Starwood Hotels is a leading global hotel group with locations across the US.
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.
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.
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.
Testimonial from Starwood
Thank you for your support over the last 3 years. From those early conversations we have delivered lasting change and savings in Europe and the US and on the whole you have brought our very challenging operators with you on the journey.
Paul Davis, SVP Supply Chain Starwood Hotels & Resorts Worldwide
Tagged as: Case Study
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