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| Question: How does HW Supply Management select suppliers? |
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| Answer: |
| Supply Management acts as a facilitator in the supplier selection process, working with cross-functional
teams at the corporate, regional, and hotel levels. We are committed to selecting the very best suppliers
during a competitive sourcing and bid process designed to obtain the optimum in quality, service, and
value. We negotiate and work with national, regional, and local suppliers to deliver the best products
to our hotels that meet or exceed each brand’s specific standards. Suppliers are evaluated based on
criteria including financial stability, delivery performance, product performance, industry wide
reputation, responsiveness in solving problems, and other salient points. Every Hilton supplier must
commit to provide its products and services at contracted prices, maintain sufficient inventory levels,
deliver the products at scheduled times, provide monthly pricing reports, and many other services to help
our hotels perform at only the highest levels, HW Supply Management negotiates purchasing programs using
a two-pronged approach. First, product prices are negotiated with the manufacturer to ensure that HW
Supply Management is getting the absolute best price on the manufacturer’s products into the distributor. In
most cases for high volume items, HW Supply Management’s price is lower than the price that the distributor
could pay for the same item. This approach is commonly referred to as deviated pricing. The second prong of
the approach involves the distribution element – HW Supply Management bids out the distribution of these
products on a cost-plus basis, thus establishing a primary supplier distribution program with fixed
markups. This approach is the only way to guarantee that the deviated prices of the various products
are passed on to the hotels. |
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| Question: Does HW Supply Management always have the lowest prices? |
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| Answer: |
| On a market basket grouping of items, the answer is yes; however, any supplier can beat another supplier’s
pricing on any given item, especially if they know what price they have to beat. In many cases a supplier
uses a loss leader item to get their foot in the door. Ultimately, they will look to charge higher prices
at a later date or on other items where price is not scrutinized so keenly. HW Supply Management’s
programs are structured to consistently maintain the best overall savings when weighing both the total
volume and the cost of the all of the products purchased from a particular supplier. This has been confirmed
each time that HW Supply Management converts a hotel to a Hilton Worldwide brand. When converting a hotel,
HW Supply Management has the ability to run a cost effect comparison on what the previous company was
paying as compared to its programs. In every instance, HW Supply Management has realized at least 8% in
program savings. |
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| Question: Do all hotels within the Hilton
Worldwide portfolio of brands pay the same price for products and services? |
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| Answer: |
| Yes. Regardless of whether you’re owned, managed, or franchised, all hotels pay the same price for
products and services through HW Supply Management’s programs. |
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| Question: My hotel uses a diversity
supplier that is not on HW Supply Management’s list of approved suppliers. Can this supplier become
an approved supplier with HW Supplier Management? If so, what is the process for approval? |
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| Answer: |
| Yes. Supply Management is constantly looking for new ideas and new suppliers, especially diversity
suppliers. Typically, suppliers go through a “bid” process when either there is a new product needed
or the existing suppliers’ contracts are up for renewal. For more information, see Doing Business With
Hilton Worldwide. |
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