RC Hotel (Rogers Comfort Hotel) began with a 10-room boutique hotel in a small Ontario town
in 1925. Today, RC Hotel is throughout North America and is known for its luxury all suite units
at competitive rates. They are now found in nations capitals, rural roadsides, trade centers,
vacation destinations, and everywhere in between. There are over 150 locations.
Their target market is business people who travel for more than one night and wish to have the
comforts of a suite – even better than “home”. The amenities in the suites are luxurious. Big
towels, 400 thread linens, brand name shampoos and lotions, writing paper, solid pens, leather
chairs, mahogany desks and glass reading lamps. The kitchenette is stocked with coffee and tea
and basic condiments like creamers and sugar, salt and pepper.
RC Hotels currently source their amenities on an individual basis. Each hotel has an employee
responsible for purchasing, and as long as the products meet a detailed quality control check list,
the hotels are free to purchase from whatever supplier they would like. For example the hotels
are mandated to provide 3 ply tissue paper in each suite, but the brand is not specified. Another
example, all soap must be hypoallergenic but again the brand of soap is the choice of the hotel
buyer. Each individual hotel currently purchases from on average 35 vendors. Very few vendors
are shared amongst the hotels. Some of the hotel managers have complained that they can’t
purchase in bulk since they have limited storage facilities at each site, and those that are able to
purchase in bulk have expressed concern about the inability to track product expire dates on the
dated kitchenette supplies (Food products) . In general the hotels like to order their own
amenities, but another concern they have mentioned is that once they find an approved vendor
and place the first order, there is no guarantee that the second order will be of the same quality,
leading to additional waste.
The vendors are located all over the world. For example, the exceptional furnishings come from
vendors in Italy – who ship the pieces to each hotel directly via air freight. The plush linens and
drapery arrive from Ireland and Egypt via ocean freight, again directly to each hotel. Many of the
other North American vendors take advantage of couriers and LTL trucking services. The
Managers are very well equipped to operate hotels, but very few of them have any working
knowledge of dealing with carriers. They have expressed a concern that they are unaware of how
their staff should be dealing with any shipments that arrive damaged. They do not know how to
process a claim or address any overage, shortage or damage (OS&D) issues. Also, many of the
vendors send the shipments on a collect basis, so the hotels have to manage numerous carrier
payable accounts.
The hotel chain is doing extremely well and the family run operation is planning a large
expansion over the next decade. They wish to double the locations worldwide. But they know
before they move forward they have to fix what is broken. You have been hired as Director of
Logistics, to assist and oversee the expansion process. You have been given “carte blanche”, an
open slate, free reign… you are empowered to fix these issues. Your direction is to implement
one or more distribution centers.
Create and describe a supply chain for the inbound freight from the vendors (Average 35 vendors
for 150 hotels) to the North American DC’s that you have established. Your redesign of the
supply chain must specifically describe:
1- The distribution channels
2- Distribution center locations
3- Formal inventory systems available and the reasons for choosing one of them.
4- Where you would locate quality control points
Attachments:
Business-Case….pdf
