Supply Chain Trend – Can this happen in near future?

The other day when I was travelling back from office to home, I saw a van belonging to a famous hotel chain carrying huge bunch of vegetables, fruits and milk and a thought came into my mind. Can this be an automated process driven by the historical as well as current demand pattern and managed by a system itself? I started thinking if an IT driven process can be deployed at hotels that not only tells them what material to procure, when to procure and how much to procure but also place orders directly with the vendors. Looks like an ideal supply chain in an manufacturing company but the days are not far, when hotels start using this as their chief methodology for procurement management.

 

Let me do a dissection of what exactly will they need to fulfill this:

• To start with, they will need multi bin refrigerators or deep freezers depending on their needs
  
• The bins needs to have a capability to store vegetables with level sensors so that an alert can be sent to the IT system in case of level of vegetables, fruits or milk changes
  
• An IT system that can be integrated with the refrigerator and have the ability to name the bins as well as define minimum and maximum required levels of eatables
  
• The IT system should also store the minimum and maximum shelf life of eatables which will help in calculating the size of batch of eatables that is going to be procured
  
• This IT system will store the contracts between the hotel and its vendors and will also be able to decide on prices base don historical patterns and logic defined in it
  
• The vendor either needs to have an IT system or a fax or a mail box or phone that can receive the automatic orders from the hotel system and have the capability to communicate the orders internally
  
• Finally a home delivery and logistics ability at the vendor’s end that can ensure delivery of the eatables as per need by date of hotel
  

Did I complicate this completely? Well, not completely but yes, it does not seem to be a simple way as lot of initial infrastructure and systems need to be in place for this to work. Now, let us go through the process taking milk as an example:

1. As soon as the level of milk goes down from the minimum level defined in the refrigerator, an alert will be triggered and will be sent to the IT system
   
2. Another validation of milk level will be done in the system and after this, an purchase release will be sent to the milk vendor with the pre-decided order quantity fed in the system
   
3. The prices will be decided by following options:
   
• Looking at the pre-identified websites and finding out milk prices on that day
  
• Using the contracted rates with the vendor
  
• Initiating an quick e-auction between couple of qualified vendors (too futuristic)
  
• Ordering at mean price for pre-decided period
  
4. This purchase release will go to the vendor(s) system of receiving orders and it will be processed at their end
   
5. In case vendor can not meet the need by date, their IT system will communicate back to the hotel IT system and a mail will be sent to the procurement in-charge for alternate planning
   
6. When vendor send milk to the hotel, it will be received at hotel’s end and the refrigerator milk bin is replenished
   

Multiple controls can be built in to make the above simple looking process foolproof and exceptions can be handled automatically with few logics defined in the system. So, what do you think now? Can this happen in near future or we will keep on doing manual buying of eatable for hotels for sometime to come?