Supply risk in hospitality sector | Pakistan Today

Supply risk in hospitality sector

  • With the government emphasizing tourism, its supply chain must be looked at

By: Abdullah Janjua

In recent developments, Pakistan is becoming a hub of the tourism industry, and the government is taking many initiatives to promote it in the country. Tourism is thus a burgeoning industry for our country, and many challenges lay ahead for us, which need to be addressed before this industry can attain its full potential. The hospitality industry is viewed as the core of tourism, be it be for the local or international tourist. To ensure maximum levels of satisfaction in the hospitality industry, its supply chain needs to be optimized and calibrated enough to ensure smooth, uninterrupted services. The supply chain of the hospitality industry faces many challenges and risks which shall be highlight below.

The northern areas of the country are pretty enticing, and people find it very fascinating to visit them. Particular areas located at mountain tops are not well connected by road infrastructure; hence, they use animals as means of transportation of raw materials. Transportation via animals is slow, which leads to longer lead times; also, the ingredients (especially for food) are more prone to getting spoiled if not transported under suitable conditions. Since the tourists require the best quality and services, the industry cannot risk running out of stock. Therefore, large quantities are supplied and stocked, making them incur more expense to accommodate the high demand. Since these are perishable items and due to the harsh conditions if it is not appropriately managed, then you have effectively wasted the investment if they are not demanded. Furthermore, the packaging needs to be biodegradable to preserve the beauty of the land, and a focus on a green supply chain is needed. The lack of cooked food encourages tourists to bring their food and snacks, which results in littering at these areas.

Wherever there is an opportunity there will be risks and challenges. There is a lot of potential in Pakistan hospitality industry and most of it is untapped. With passage of time and induction of newer technology, supply chain will be optimized and risks associated with hospitality will be reduced

Economic instability also impacts the supply chain of the country. Due to price fluctuations of daily consumable items, it becomes difficult to negotiate with the suppliers. Contracts need to be more flexible to cater to price fluctuation as prices cannot be fixed for a more extended period. In case of war threat or tense relations with the neighboring countries, the food items that are being imported are affected. The same is the case in the event of a natural disaster. The agriculture and dairy sector takes a blow which results in lower supply and higher prices.

Global climate change is resulting in a change in weather which ultimately affects the seasonal fruits. Many hospitality industries have seasonal dishes on their menu and to ensure their standards they use high-quality fruit. Due to variation in climate, the quality fruit does not remain longer, as a result organizations are required to exclude the dishes due to non-availability of quality fruit.

Food, and in particular meat, is a very core ingredient which is exposed to many risks if not properly handled. The meat itself is an organic substance, and many microorganisms are already present it in. They can grow inside the carcass if it is not correctly kept. To ensure optimal levels of high quality, temperature freezers are used, which are very expensive. If such a facility is not present for the meat, its quality will deteriorate rapidly and could result in health issues for the consumer. The companies destroy large shipments of meat if the freezers break down or there is a break in electricity suplly due to due to loadshedding. Similarly, the suppliers of meat have to ensure that their transpiration units have the appropriate equipment to meet up with long delivery routes. Furthermore, during the Eid season many suppliers do not provide the demanded meat to the industry as their Tier 1 supplier sells the animals in the markets for Eid. Many times the animals are exported out of the country which results in supply issue for the hospitality sector.

We live in a digital world, where word of mouth travels fast, primarily through the social media platform. Many times the competitors sabotage the market and suppliers. A very famous case would be that in Australia a woman took pictures of a needle which she claimed to have found in the strawberries she purchased. As a result and out of fear from the government, many distributors destroyed their strawberry stock later only to find out that it was just fake news. This resulted in more demand and less supply, hence making way for a few suppliers to take over the market.

Wherever there is an opportunity there will be risks and challenges. There is a lot of potential in Pakistan hospitality industry and most of it is untapped. With passage of time and induction of newer technology, supply chain will be optimized and risks associated with hospitality will be reduced.



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