Industry Update
Opinion Article29 May 2012

Automating Inventory & Procurement – It’s a ‘No-Brainer’

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Trevor Roberts

When times are hard, it seems counter-intuitive to spend money in order to save money, but that’s what many hospitality businesses are doing. They’re finding a good way to conserve resources and cut costs is to automate inventory & procurement, and they’re getting savings of 5% - 15% through increased efficiencies and reduced spend.

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If you remain unconvinced, consider our ‘top five’ reasons why automating inventory & procurement is a smart idea.

Save money

Automated solutions deliver big savings over manual systems, from reduced admin costs to shortened procurement and fulfillment cycles. An automated bid system drives down the cost of supplies by allowing procurement staff to increase the number of potential vendors and identify preferred suppliers. In large properties, where purchasing responsibilities are spread over several departments or locations, automating inventory & procurement maximises buying power by consolidating orders, which typically lowers the transaction cost and increases volume discounts.

Save time

Automating inventory & procurement saves time by streamlining purchasing and inventory control. Tasks that once took hours or even days can be performed with a few clicks of a mouse. Staff no longer waste time matching receipts with deliveries, figuring out complex invoices and keying in redundant information. Vendor management admin tasks such as creating contracts and soliciting bids also take less time. Likewise, purchasing managers spend less time on admin and more on analysing spend patterns and negotiating favourable supplier terms.

Increase accuracy

An automated solution increases accuracy. With data no longer re-entered from paper documents, there are fewer clerical errors and ordering mistakes. Automated solutions link usage to demand, enabling properties to maintain up-to-the-minute inventory counts, obtain accurate operating costs, track the cost of sales and identify the best and worst performing cost centres.

Improve negotiating power

For effective supplier negotiation, managers need to understand what they are purchasing, in what volumes and at what price. An automated solution provides this information, giving staff greater leverage to negotiate price breaks, volume discounts and better payment terms. Armed with details about spending patterns, purchasing staff can see the ‘big picture’ and make fact-based decisions that result in cost savings and more accurate inventory counts.

Increase compliance

It makes sense to standardise processes and ensure employees at all levels are using pre-negotiated pricing. For procurement managers, an automated solution ensures a single standard for buying a certain kind of product is enforced across the board. An automated system also helps limit ‘maverick’ buying (the practice of purchasing items outside of the preferred system) through approved vendor lists, pre-sourced catalogues and standard ordering and approval processes. Centralised tracking allows managers to monitor off-contract buying and ensures compliance with established contracts.

In an industry where margins are tight and multiple departments requisition items several times a day, it makes sense to automate inventory & procurement. An automated system not only optimises existing resources and prevents unnecessary costs, but also positions the property to grow successfully.

Do you agree, and what is your experience of automating inventory & procurement? We’d welcome your feedback, questions and comments. Please email Trevor Roberts at [email protected]

Information about Agilysys Eatec® inventory & procurement solution suite can be found at

About Agilysys

Agilysys has been a leader in hospitality software for more than 40 years, delivering innovative guest-centric technology solutions for gaming, hotels, resorts and cruise, corporate foodservice management, restaurants, universities, stadia and healthcare. Agilysys offers the most comprehensive software solutions in the industry, including point-of-sale (POS), property management (PMS), inventory and procurement, payments, and related applications, to manage the entire guest journey. Agilysys is known for its leadership in hospitality, its broad product offerings and its customer-centric service. Some of the largest hospitality companies around the world use Agilysys solutions to help improve guest loyalty, drive revenue growth and increase operational efficiencies. Agilysys operates across North America, Europe, Asia-Pacific, and India with headquarters located in Alpharetta, GA. For more information visit Agilysys.com.

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