Just-in-Time: Implementation within the Hotel Industry?

: A
case Study
Gerald Lee Barlow
University of Central England
Business School
e-mail gerald.barlow@uce.ac.uk
This Paper sets out to report on the potential value of Just-in-Time (JIT) purchasing and
inventory management within the hotel industry. Specifically, it outlines research carried out
over 1998 and 1999 within two hotel groups, covering three London Hotels. The first an
international hotel organisation and the second a family owned hotel company operating in
England and Kenya. It looks at their current inventory and purchasing policies, how they
manage and maintain their inventory levels and what these policies mean, as far as the hotel
operations.
Key Words: JIT, Inventory management, Hotel industry.
JUST-in-TIME means many things to many people, but to many in the hospitality
industry little more than an expression of gratitude for a much needed drink.
INTRODUCTION.
"Just-in -Time" (JIT) means different things to different people. Some believe
it is an approach to manufacturing production, control and purchasing; to others
it is a methodology to achieve manufacturing excellence (Schonberger 1986);
some businesses even view JIT as a winning strategy in the highly competitive
market place of the 1990's. (Schniederjans 1992). This article sets out to
investigate the possibilities of employing part of the JIT philosophy, within the
hotel industry.
JIT is but a part of the overall philosophy of Total Quality Management, (TQM)
(Oakland 1995) which should perhaps represent the overall mission statement or
strategy of the hotel industry. That is, the customer is King or Queen, quality of
product or service is the ultimate goal, and the philosophy of get it right first
time, every time. This is surely what most of the industry's customers expect, and
what the managers strive for. Within the JIT philosophy, or ideas, is the
management technique of JIT purchasing, it is this technique that the paper sets
out to explore with reference to the hotel industry.
JIT purchasing suggests, the minimisation of the stocks to zero, or as near to
zero as possible, the use of a regular daily deliveries and reliable local suppliers.
This is surely how the 'Grand Hotels' of the last century operated and created
their fame and fortune. They would have had daily deliveries of fresh produce,
there was after all no refrigeration, and many products both food and other items
were perishable,(even beer did not have a long shelf life).
For the purpose of this paper a case study approach is used, based upon
three distinctly different hotels:HOTEL A: A central London 5 star deluxe hotel, comprising 500
luxury bedrooms, banqueting facilities for approximately
1000 people,3 restaurants, and 5 bars.
1

HOTEL B: A central London 4 star hotel, comprising 200 bedrooms,

banqueting and conference facilities for up to
250 people,
a restaurant, coffee shop and cocktail bar.
HOTEL C: A Heathrow Airport Hotel, comprising 400 bedrooms,
conference and banqueting facilities for up to 500 people,
a restaurant, coffee shop and two bars.
The sample hotels are representative of a multinational operator, a small
international hotel group, and a family owned group. They all have similar
purchasing requirements for the material needs, but vastly differing requirements
in respect of quality, delivery frequency and volume. For the purpose of this
paper, the areas investigated are restricted to those of, purchasing and inventory
management within the beverage division, generally the largest stock holding,
within hotels, in terms of volume and financial investment.
Just-in-Time Purchasing requires that goods are supplied in small quantities, in
exact amounts, at frequent intervals and in perfect quality.(Voss1989). This helps
create an environment for the provision of cost effect products or services, in the
right quantity at the right place, in the right time, whilst using a minimum
amount of facilities, equipment, materials and human resources.(Voss 1989) The
Just-in-Time Purchasing philosophy has been defined as maintaining just
enough material in just the right place at just the right time to make just the right
amount of product. Or, more concisely as the exact adjustment of product to
quality and time held.(Lyson 1990)
Just-in-Time Purchasing (JIT) is an important element of Just-in-Time
Management, and it is effective for the following reasons:
1.
2.
3.
4.
5.

Controlling the inventory system.

Reducing buffer inventory.
Reducing space needed or used.
Reducing material handling.
Reducing waste materials.

For JIT to work, two thing must happen:

a.
all parts, or orders musts arrive when and where , they are
needed, in the exact quantity that is need.
b.
all parts, or orders delivered, must be usable.
Where these conditions are not achieved, Just-in-Time may easily
become Just-too-Late.
In achieving these requirements, purchasing has the following responsibilities:
The emphasis should be on performance rather than design specification.
Less restrictive specifications enables suppliers to be cost effective by being
innovative with regards to the quality/function aspects of supplies. In JIT
purchasing, value analysis is an integral part of the system and should include the
suppliers liaison;
1.

To ensure that they understand completely the necessity of

maintaining a consistent lead time and high
level of quality.
2

2.
3.

To investigate possible or potential suppliers within a reasonable

proximity to the users locality, to help increase the certainty of
delivery lead time and on time delivery.
To establish long-term relationship with a view to meeting the
suppliers expectations in respect of:
a.
continuity of custom,
b.
a fair price and profit margin,
c.
procedures and price adjustments,
d.
minimising order changes,
e.
firm and reasonably stable specifications,
f.
smoothly timed order release
g.
involvement in design specification,
h.
prompt payment.

The benefits of JIT.

The potential benefits of JIT to an organisation, and its purchasing
function in particular, have been summarised by Schonberger and Ansari
(1984) as:
A. Parts Costs
Low scrap costs; low inventory
carrying cost.
B. Quality
Fast detection and correction of
unsatisfactory quality and
ultimate improved quality in purchased
goods,
C. Design
Fast response to engineering/operational
change requirements.
D. Administration
efficiency
Fewer suppliers, minimal expenditure
and order release
work, simplified communication and
receiving activities,
E. Productivity
Reduced re-works, reduced inspections,
reduced parts
related delays,
F. Capital
requirements
Reduced inventories of purchased parts,
raw materials, work-in progress, and
finished goods.
Not all of these benefits will be applicable to all industries or areas where JIT
purchasing is or can be applied.
HOW DOES THIS APPLY TO AND WHAT EFFECT WOULD IT HAVE ON
THE HOTEL INDUSTRY?
JIT purchasing is as stated earlier an important element in Just-in-Time
management, which in turn is accredited as an important element of the Japanese
developed Total Quality Management.(TQM) It is effective because it:1. Reduces Buffer stocks,
2. Controls the inventory system,
3. Reduces space needed,
4. Reduces material handling,
5. Reduces waste materials.
3

So do these apply to the hotel sector?

1. Controlling the inventory system,
and
2. Reducing buffer stocks.
The current systems in the sample units are all similar. The hotels hold a buffer
stock, a stock in the outlets, plus work-in progress.(work-in progress being the
opened items, bottle and beer kegs etc.) see table 1
Table 1
Total Beverage Stock Holding as at 31.10.1998
UNIT
Total stock

as a % of

Stock

beverage

in

holding
Held
days
Total Stock
A.
86
B
99
C.
74
Total Main Bar Stock
A
36
B.
52
C
32

annual sales
%
8.25

248439
18987

10.05

25649

7.25

92665

3.74

8003

4.14

13223

3.08

Employment of JIT purchasing and inventory would result in the hotels no longer
needing the cellar stock. The current levels of stock in both the cellar and the
outlets can be seen in table 1. An example of the possible savings can be seen in
case study 1. This study shows the stocks held by hotel A. on 29.10.98, and a
suggested par or ideal stock level for each outlet, which could result in a
reduction in stock holding of 183,916. a considerable saving (74.44%) (Par
stock is the optimum level of stock held in an outlet, not the minimum level).
3. Reduction in space needed.
The information in Case Study 1. shows the financial savings, available
through JIT inventory management. A cellar stock will no longer be needed, thus
4

resulting in a reduction in the space needed or used. This space saving can also
have possible financial benefits as seen in Case Study 2. within hotel C.

CASE STUDY 1.
HOTEL A.
The effect of JIT purchasing on the stock values at hotel A:
as at 23.10.1998
ACTUAL
CONDITIONS
OUTLETS

Stocks
UNDER J.I.T.

TOTAL STOCK
STOCK
PAR
HELD
DAYS
STOCKS

STOCK

DAYS

Cellar
153324
0
Cocktail bar
2374
18
Roof Top Bar
16789
16
Coffee shop
2355
12
Room service
4663
18
Banqueting
23276
8
Mini-Bars
28198
145
Basement Restaurant 15010
19
TOTAL
245989
22
Formula for calculating stock days:

53

15

2044

22

12214

14

1954

30

2736

27

5122

145

28198

30

9805

86

60273

stock in outlet
average daily cost of sales

CASE STUDY 2.
HOTEL C.
STORAGE SPACE COST.
CURRENT SPACE COSTS.
The hotel has a variety of storage areas connected to each outlet, plus a central cellar,
where the majority of its stock is stored. The cellar stocks as at 03.11.1998 had a total
value of 12425.96 which represented 48.44% of the total liquor stock held in the hotel
at that date.

The square footage, and general shape of the central cellar is similar to that of the
hotel's accounts and control audit department, although sited in different areas of the
hotel.
The area currently occupied by this department is in the ground floor bedroom area,
and could easily be converted into two bedrooms. Similarly the central cellar area,
could easily be converted into a new accounts/audit office. Neither have an outside
view.
The Financial results would be;
The average room rate achieved at Hotel C. since the current owners took over the
property is 57.45, and the average room occupancy over the same period is 62.8%.
The annual benefits to the hotel by this action would be in the region of 26337.37 p.a.
2 rooms X 365 X 62.8% X 57.45
No. of rooms X No. of days X occupancy % X average room rate.
This plus a saving on capital investment in stock could be some of he possible benefits
from JIT purchasing being successfully introduced at this hotel.

4. Reduction in material handling.

Case study 3. indicates the time and staff levels involved in material handling at
Hotel B. and suggests possible savings available by employing JIT purchasing
techniques.
The savings will come from reduced labour costs in the basement porters, the
back doorman, and cellar staff, for example. In case study three, it is possible
that the implementation would eliminate the need for a cellarman, and if JIT were
applied throughout the hotel, then it would remove the need for a
storeman/cellarman, whilst reducing the work of the basement porter and for a
back doorman, goods in or goods receiving clerk.

Case Study 3.

Hotel B.

The Delivery Process.

The hotel places an order for alcohol, say for wine with company A.B. Ltd. which delivers the wine to the
back door, delivery area of the hotel. The delivery is checked by the back doorman/ goods receiving clerk.
The delivery note is signed and the wine is left. The wine is then delivered to the cellar, where it is rechecked, stored and entered into the store's ledger system. The wine is then requisitioned and delivered to
one of the outlets, say the cocktail bar. The bar checks the delivery, and either stores it in its own store, or
possibly put it into the bar stock, i.e. on the shelves. It is then entered it into the bar stock records. The
cellar stock records are also updated. Eventually the cellar stocks will reduce to a level requiring a reordering of the particular wine. There is therefore little direct relationship between the bar or outlet selling
the stock item to a customer, and the cellar staffs' re-ordering process.
The paper work involved in this transaction is:1. order,
2. delivery note,
3. goods received note,
4. invoice,
5. bar requisition note to cellar,
6

The staff involved:1. delivery man company to hotel,

2. back doorman/goods receiving clerk
3. basement porter (goods from back
door to cellar)
4. cellarman/ stores personnel

6. delivery note cellar to bar,

7. cellar stores record,
8. bar stock records.

5. barman.

Alternative under JIT Purchasing:Wine is ordered from a local supplier via fax, and delivered daily to the hotel, directly to the bar. The
bar staff receive and put into stock. They update the EPOS system with the new stock items. At the end of
the evening work the bar personnel re-order, via fax the next days deliveries.
Paperwork involved:A. order faxed,
B. delivery note,
C. weekly invoice,
Staff involved:A. bar personnel,
B. delivery person at suppliers.

5. Reducing waste materials.

In theory liquor stocks are unlikely to have any waste, or any chance of
waste, which ever purchasing system is employed. However, if JIT purchasing
was employed it would make the central stores, back door storage areas, and the
need to store stock obsolete thus reducing the amount of people involved in
handling stock. This would also reduce the risk of either damage, breakage or
pilferage, and indirectly result in a possible reduction in waste materials, which
has been as high as 4% within the sample group in specific periods.
The rational behind carrying Inventory.
Material inventories are those which support the company's processes, be it
manufacturing or a service based company, as in the case of the hotel cocktail
bar. In the case of the hotel bar, the material inventories are the liquor stocks,
either in the bar, its own store or the central hotel cellar. Coyle Bardi &
Langley(1992) identify six reasons for carrying inventory:1.
2.
3.
4.
5.
6.

Purchasing Economies
Transportation Savings
Safety Stock
Speculative Purchases
Seasonal Supply
Maintenance of the supply source.

1. Purchasing Economies
One reason put forward for accumulating a material inventory is that the
company may be able to achieve purchasing economies of scale. This was a
major reason given by one of the sample units in the study. Either the hotel or its
head office purchasing department felt that there were economies of scale to be
gained by the hotel / organisation from buying in bulk or larger lot sizes. For
example hotel A. in August planned and ordered 75% of their next banqueting
seasons wines, for delivery in September 19928. This was duly placed, and the
stock delivery, thus resulted in a huge volume of stock of wine in the hotels
7

central cellars. (Wine in the central cellar at the stock take on 23rd. October 1998
was valued at, 108,157 and was equivalent to 69 days stock to the whole hotel,
whilst almost 30% of the original 75% was still to be delivered.)
2. Transportation Costs.
A company supplying the goods, may pass the transport costs on to the
purchaser. Thus the costs per unit purchased are likely to be greater for low
volumes of traffic. This is seldom noticed in the hotel industry as most or all
purchase prices include transportation cost. However one sector of the supply
chain is effected, that is where the supplier stipulates the number of deliveries he
is prepared to make per period. (be it a week or a month.) This is most
commonly in two particular areas on the liquor supply chain, a. soft drinks,
notably Schweppes, and b. the beer delivery, notably the larger breweries.
E.g.Whitbreads, Courage etc. This type of problem leads to an increase of actual
stock needed, and also an overstocking as explained below.
3. Safety stock.
Stock is held in case of emergencies. For example, in case of a strike, or bad
weather conditions, or in case we don't get our weekly delivery. When
interviewing the hotels bar staff, and food and beverage management, this was
the widest used reason for hold stocks. Just-in-case someone orders it. Just-incase we have a sudden rush. Just-in-case we run out. Just-in-case the
company fails to deliver, Just-in-case there is a national shortage etc.
Perhaps the expression that best explained the approach to inventory
management as experienced in each of the units, is Just-in-Case purchasing
management.
4. Speculative Purchasing.
Speculative purchasing or hedging against future price increases, strikes and
changes in political policies, taxes, rises in inflation, fluctuation in foreign
currency and interest rates, were once common, and in areas of high inflation
(Turkey for example in Europe) are understandable. But, in the hotel industry in
London in 1998, or 1999? It was surprising to find two out of the three hotels in
the sample group employing or maintaining this as a justification for high stocks
levels. In one case, short-term measures caused by potential delivery problems,
and a price rise if the action took place and became long term action. The dispute
was settled and there was no industrial action. In the other case the situation
developed because of rumoured possible tax changes in the 1997 budget, which
never materialised, and which even if they had, would have simply been passed
on to the customer and blamed on the tax increase. Therefore making a windfall
profit!
5. Seasonal supply.
This seems to be of very low priority in the beverage sector, with possible
exceptions of long hot periods, which cause major increases in the sales of soft
drinks, coca cola etc. If such climatic influences were predicted, the possibility
of increasing stocks to cover could be argued, but equally, if the forecasting was
accurate in advance, the manufacturer would increase production to cover, and
8

the need to stock pile would not exist. However, one of the sample hotels did see
a need to increase stock levels for this reason. Hotel A, the largest of the units,
and the hotel with the largest Banqueting business arranged in August 1997 to
purchase 75% of its expected wine consumption for the next banqueting season 9
months, and to have 75% of delivered in September and October, and the balance
by early December. The hotel achieved a 7.5% average increase in their discount
for this order, and a 60 day deferred payment. This does not give much, if any,
savings on simple financial grounds, if the cost of borrowing or the potential loss
in interest is taken into account. The probable increased rate charged in
November 1997 was 9-11%, and the potential interest rate available for
investment 4-8%. This ignores any other problems or costs, such as increased
insurance cover, extra storage space, extra staff to deal with the initial volume on
delivery etc.
6. Maintenance of Supply Source.
This is the final reason given for holding inventory, and is often applied where
large manufacturers use small suppliers to manufacture a small but important part
of an entire assembly. Companies may find it necessary to take stock in order to
maintain the supply chain with these small suppliers. This didn't feature as a
reason with the hotel in this case, or any others I have contacted. Table 2. and 3.
indicate the total stocks held by each hotel , and the level of stock held by each
hotel in its main cellar, (the main buffer stocks).
The question of why inventory is needed may seem trivial, but it is perhaps a
necessary starting point. In many organisations inventory is kept to protect the
supply-production-distribution chain from demand fluctuations. Adequate
inventory insulates one part of the supply-production-distribution from the next,
thus allowing each to work independently. JIT has in many ways started to break
down this approach, and created a more integrated process, thereby eliminating
much of the long held reasoning behind the argument for holding stock. A
traditional reason given for holding stock as set out by Farsad and LeBruto
(1993) in "A Measured Approach to Food-Inventory Management. In which they
state "a correct inventory helps meet the expected customer demand (distribution)
establishes a smoother production process (production), and occasionally acts as
a hedge against unexpected price increases or product shortages (supply)." In
discussions with managers and staff in the sample hotels, this was one of the
major arguments against JIT purchasing, and in support of the old system. In that,
inventory is needed Just-in-case a customer requests that brand, Just-in-case the
supplier fails to deliver, Just-in-case the supplier has a strike or goes out of
business. Just-in-case we have a rush of customers and so....... It is this approach
that has resulted in the three hotels having stock levels ranging from 69 Days at
Hotel C to 98 days at Hotel B, which is in reality Just-Too-Much.
Table 2.
Total stock holding
ITEMS
Hotel

Hotel

Hotel

A.

B
9

Spirits

57188

6385

Fortified wines

13260

427

Wines

157269

8311

Beers

5330

1500

15392

1464

248439

18087

8531
329
9612
3467
Minerals
3710
Total Stock
25649

Total stock held in stock days:ITEMS

Hotel
Hotel
A.

Hotel
B

C
Spirits
144
Fortified wines

80

n/a

138

n/a

Wines

96

n/a

Beers

30

n/a

Minerals

35

n/a

Total Stock

86

98

FORMULA USED:-

STOCK
AVERAGE DAILY COST of SALES

80
58
55
54
69

n/a hotels sales data not available in a suitable format.

Table 3.
Stock holding in the hotel central cellars.
ITEMS
Hotel
Hotel
A.
C

Spirits
27149
2040
Fortified wines
9908
205
10

Buffer Stocks.
Hotel
B

3050
176

Wines
7393
Beers
1987
Minerals

108157

4624

2511

1170

5599

1064

248439

10084

796
Total Stock
12425
Total stock held in stock days:ITEMS
Hotel

Hotel

Hotel

A.

C
Spirits
35
Fortified wines
50
Wines
46
Beers
22
Minerals
13
Total Stock
33
FORMULA USED:-

37

n/a

99

n/a

69

n/a

14

n/a

17

n/a

53

71

STOCK
AVERAGE DAILY COST of SALES
n/a hotels sales data not available in a suitable format.
Table 4.
A comparison of Traditional Hotel Purchasing and JIT policies.
Purchasing Activities
Purchasing

Traditional Hotel

JIT

Purchasing
FULL RESPONSIBILITY
Establishing lot size
is in mall

Purchasing in large batches

Purchasing

to obtain economies of

batches

purchase scale.(Maxi Disc.)

Multiple source of supply for

regular
A single

each item usually 3-4 for

supply for

each, short term or

in

no contract

term

Product, price, quality

Product,

and very
Selection of Suppliers
source of
each item
local

area, long
contracts.
Evaluating suppliers
quality,

11

and performance are

delivery

emphasised with approx.

and

performance
price

are
5% delivery error
emphasised: 0% error
Negotiation with
objective is
Suppliers
product

Primary objective is to

Primary

achieve the lowest

to achieve

possible price.

quality

price

price

Hotel responsibility for

Counting

receiving and checking

of

all incoming items.

reduced

This is dealt with by supplier

This

Hotels responsibility.

supplier
Supplier to

Buyer relies on hotel dept

Buyer

and management for specific

working

specification

between

and a fair
long term
contract.
PARTIAL RESPONSIBILITIES.
Inspection on incoming
& inspecting
goods
incoming goods is
and finally
eliminated.
Determining mode of
dealt with by
transport.
Internal Goods Delivery
outlet.
Setting product
relies on
Specification.
relationship

Via

is

supplierbuyer
dept. and
Source: adopted
from Ansari and Modarress (1990)
management.
WHAT BENEFITS ARE AVAILABLE TO THE HOTELS FROM JIT
PURCHASING?
The major advantage recognised by Ansari and Modarress (1990)are:1. Improvement in product quality
2. Ease of communications
3. Reduction in lead time, storage levels, stock/inventory, space and
materials handling.
Will the hotel also benefit in these areas?
1. Improvement in product quality, the incoming inventory is, in most
cases not going to change, since most of the beverage items are of a set quality,
e.g. a Bottle of Gordon's gin, or a pint of Courage Beer is the same which ever
system is used to buy it. But the aim is to ensure the standard and quality of
product and service, thereby improving the quality of the overall service. The
major principles being: treating suppliers as partners, not adversaries, and
trusting the supplier, giving the staff authority to do the job. By this method you
12

give the staff authority to do their job, and complete ownership of the job and its
problems. Giving the worker authority to share in the control of product quality,
making quality everybody's responsibility and maintaining a 100% quality
product policy.
Ansari suggests nine points for quality control and customer services. Ansari and
Modarress (1990)
1.
Controlling initial flow of new products, or new information and
feedback for product perfection.
2.
Determining the adequacy of instruction booklets and manuals,
e.g. cocktail recipes, EPOS manuals
3.
Visiting users, and answering technological questions.
4.
Checking the efficiency of the system to perform immediately
service or parts are delivered.
5.
Checking the efficiency of periodic product inspection.
6.
Monitoring the degree of customer satisfaction.
7.
Determining and or predicting areas of basic consumer
discontent.
8.
Collecting and analysing information about defective or returned
items.
9.
Utilizing customer information for future product design and
quality.
Not all these points can be applied to the hotel industry, but they can be adapted
to the specific requirements of the service nature of the industry.
2. Ease of communications, a single source of supply will help create
less or fewer communication problems. For example the current system involves
the outlet ordering from the cellar, and receiving a daily delivery. The cellar
orders weekly (approx.) after receiving managerial approval, the goods are then
received by the backdoor/goods-in, and then re-delivered to the cellar.
3. Reduction in lead time, storage levels, stock/inventory, space and
material handling.
Through out this paper I have indicated potential savings in these areas, which
are shown in Case Studies 1.2. and 3. Table 5. highlights the potential savings
from inventory carrying cost, in each of the sample hotels if JIT purchasing was
implemented.
Table 5
Potential savings available from JIT purchasing.
Hotel A.
Outlets
Cellar
Outlets
TOTAL
Hotel B.
Outlets
Cellar
Outlets
TOTAL
Hotel C.
Outlets

Current
Stock
153324
92665
245989

Stock
days
53
115
86

Current
Stock
10084
7877
17961

Stock
days
71
126
98

Proposed
stock
0
6550
6550

Stock
days
0
36
36

Stock
days

Proposed
stock

Stock
days

Current
Stock

13

Proposed
stock
0
60273
60273

Stock
days
0
22
22

Cellar
12426
84
0
0
Outlets
13223
61
11903
34
TOTAL
25649
74
11903
34
The potential overall savings of hotels C. is indicated in table 6.
These involve savings on inventory, space, stock losses etc. but do not include
savings available from financial saving interest etc. or saving available from a
reduction in labour costs.
Table 6.
Area of Potential savings at Hotel C:
Areas
Potential Savings
Inventory
Reduction in capital costs
Space
saving available from
better use of this area
Time
Time spent buy purchasing
department in duplicated
work.
Stock losses
Breakage, pilferage taken at
1.5% per. month. of total stock.
Price
Bought about by better working
Improvements
Relationship with suppliers
Administration
Reduction in admin. costs
Cost
as telephone cost, by use of
off peak time, and fax.
Less additional costs
Price increases
Caused by increases due
to delivery frequency
Minimum potential annual saving

13746
26337
?
1571
?
?

?
41,654

All these benefits can be measured objectively, but in addition to these there are
benefits far more difficult to put an exact measure or value on. Ansari and
Modarress describe in Just-in-time purchasing these as intangible benefits. The
following are the areas I feel could be applicable and suit the hotel industry:Improving product quality
Improved productivity
Improved relationship with suppliers
More opportunities for contact with the customers
Reduced need for inspection of incoming deliveries.
Improved competitive position.
Reduction in purchasing paperwork.

It is not possible to quantify all the potential savings available from adoption of
JIT purchasing practices. There are so many areas of purchasing, so many
different items to be acquired, and in most cases hotels hold stocks ranging from
beverages, and food, to silverware, and toilet paper, from drinks coasters and
hotel brochures, to guests soaps, and detergents. However through this paper I
have tried by using just one product, beverages to indicate ways in which JIT
purchasing could possibly start to make a contribution to better management.
Is JIT purchasing worth the potential trouble? With the potential savings seen in
table 6. for Hotel C: approximately 41,654 from only one product, there seems
to be little doubt that it is a system worthy of further investigation, or trial, YES
14

with such Positive potential results in such an important area, any hotel should
seriously consider adopting Just-In-Time Purchasing.
REFERENCES:
Ansari,A., and Modarress B (1990) Just-in-Time Purchasing, Free Press, New
York.
Coyle, J.J.,Bardi,E.J., & Langley,C.J.Jr., (1992) The Management of Business
Logistics. Wset Publiching CO., St.Pauls,MN.
Farsad,B.,&LeBruto,S.,(1993) A Measured Approach to Food Industry Inventory
Management. The Cornell H.R.A.Quarterley Review. June 1993 pp.90-95
Lyson,C.K., (1990) Purchasing 2nd. Edition. M&E Handbooks London.
Oakland, J.S., (1995) Total Quality Management Text and Cases. Butterworth
Heinemann Oxford
Schniederjans, M.J. (1992) Just-In-Time Management. Allyn & Bacon Mass
Schonberger,R.J., (1986) World Class Manufacturing. Free Press New York
Schonberger,R.J., & Ansari, A.,(1984) Just-in-Time can Improve your Quality. Journal of
Purchasing and Materials Management Spring 94

15