1. Should Starwood maintain a cooperative orientation or a competitive orientation with its suppliers for the kind of items described here?
2. What types of information should Starwood exchange with its bed linens and terrycloth supplier? What does Starwood risk by sharing too much information?
3. How would you approach the sourcing of bed linens and terrycloth items? That is, would you use a reverse auction or request for proposal? Under what circumstances would you change suppliers?
4. In addition to performing value analysis on the services its properties offer, Starwood evaluates the performance of its suppliers against contract metrics. Using the bed linens and terrycloth supplier as an example, describe some of the metrics Starwood should use.

Bath towels. Televisions. Fresh produce. Uniforms. On the surface, these items may not appear to have any relationship to each other. Sure, they exist in most households, even though they were probably bought independently of one another. Yet to the supply chain manager employed in the hospitality industry, they not only have a relationship, but their purchase can be critical to gaining a competitive advantage.
Just ask Paul Davis, vice president of strategic sourcing for Starwood’s North American operations. With hundreds of hotels and resorts in the United States, Canada, and the Caribbean, Davis’s goal is to create the hospitality industry’s best supply chain organization. The items procured within his organization not only include replenishable goods such as fresh produce and food items but also extend to the sourcing of national contracts for nonperishable goods such as bath towels, electronics, staff apparel, energy, and contract services.
It is easy to confuse supply chain processes with the routine procurement of goods and services. Starwood’s supply chain certainly does include contracting, but it is much more: It consists of the customer relationship, order fulfillment, and supplier relationship processes. Strong linkages exist among the company’s upstream suppliers of services, materials, and information and the customers of Starwood’s hotels and resorts. If the upstream relationships are not carefully managed, downstream delivery of consistency, quality, and value to Starwood’s guests may suffer. As a result, significant effort is placed on the nested processes within the supplier relationship process such as design collaboration, sourcing, negotiation, contracting, and information exchange. Any number of events will trigger the involvement of Paul Davis’s supply chain team:

• Existing contracts expire.
• Individual hotel brands seek new products.
• Hotel property design teams generate ideas.
• New categories of products emerge and need evaluation.
• A particular hotel needs help with a local service contract.

When a product or service needs to be sourced, the specifications are driven by internal customers such as restaurant chefs, housekeeping, and maintenance. If the product or service does not already exist, domestic and international suppliers that might be able to create the item are researched, as are regional and local vendors. Sometimes, sourcing an existing item simply means renewing an agreement with a current supplier. Still other situations demand creating a new category that has not been sourced before or using a third party to help locate sources.