The Modern Hotelier #112: Procurement & Supply Chain Management for Hotels | with Walt Sheffler
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Steve Carran: Welcome to another episode of The Modern Hotelier, coming to you up from the trade show floor at the Avendra booth. We are joined by the CEO, Walt Sheffler. Walt, how are you doing today?

Walt Sheffler: I'm doing fantastic. We have a great show, lots of people, and surrounded by my Avendra crew.

David Millili: Great, that's good. So give us a little background. How did you get started? What are some of the first jobs you've had?

Walt Sheffler: Sure. So I attended Penn State University and was majoring in accounting, and lo and behold, there were few accounting jobs available at the time. And I knew I needed to get a job right out of school, and I migrated over to the hotel school and became a manager trainee with Marriott right out of university.

Steve Carran: Wow. What are some of your favorite things about working in the hospitality industry? I know you probably have quite a few of them, but what are some of your favorites?

Walt Sheffler: You know, being around people and the fact that the vast majority of the time, people enjoy being in hotels, they enjoy being in hospitality. It's an upbeat environment, and it's really fun to have fun in the hospitality industry, and it's an industry where associates can have fun.

David Millili: That's great. And tell us more about Avendra International and what is a hospitality GPO?

Walt Sheffler: I would like to describe Avendra, and most often do, as a professional procurement services company. So what we do is we work with our clients, and we help them set specifications. They set the specifications, but what we provide them is all the options and alternatives that are available based on the essence of their brand and what they're trying to accomplish with their products and services.

Steve Carran: So we have procurement, and then we have hospitality procurement. So how does hospitality procurement differ from traditional procurement?

Walt Sheffler: I think, again, what we're working with our clients on is, what are they trying to accomplish with those products or services? So there's an area of our business that I would describe as just pure commodity. And then there's another area of our business which really provides products and/or services that are going to help our hotel clients accomplish their goals and objectives. Depending on the segment that they're operating in, whether it's uber-luxury or luxury down to economy, we offer various products and services that are going to be appropriate for that segment of the business.

Steve Carran: Is there any segment along those that Avendra really works well with, like luxury, limited service, or do you work well with all different types?

Walt Sheffler: I think, again, we have products and services across all price points. What really differentiates us is our service. We employ hotel people that are servicing hotel people, that are there to take care of their guests. And we're very familiar in the luxury segment. We're fortunate to be aligned with a large number of hotel brands that utilize our services, and we work closely with them. We provide what I believe is a unique service where I describe it as at-property and above-property. So we've got a group of individuals that call on the leadership, the corporate headquarters, and they really get to understand the goals and objectives of that brand. Then we've got field-based people that are located throughout the country in various communities. They call on those specific properties in their geography. What happens is we've got the ability to communicate the priorities of those hotel brands via the corporate people to our field-based people, and in turn, when they're going into that particular brand, they know what that hotel's priorities are. So, for example, if food safety is really important to them, when they visit that hotel, they want to make sure they've got all the right products to make sure food safety is a priority. If sustainability is a priority, they want to make sure that they’re aware that paper straws or metal straws exist and we have them available, so they don't need to be utilizing plastic straws that, you know, today are bad.

David Millili: What are some of the biggest challenges right now that hospitality procurement is facing, and how do you guys solve them?

Walt Sheffler: Sure, I would suggest the number one challenge within the entire hospitality industry is really around labor. There's labor shortages, there's a significant number of vacant positions, and being able to have the right amount of labor. One of the ways we do that is we work on evaluating the entire supply chain. Sometimes, for example, we may recommend that they move the labor throughout that supply chain. So a good example could be, say you have a hotel that is cutting steaks at the property level. We may be able to work with our supplier partner, who then in turn has pre-cut steaks available for that hotel. So you're moving the labor throughout the supply chain to help make it most effective for that hotel operator.

David Millili: That's great.

Steve Carran: It's great. So, how does Avendra help your clients achieve their business goals, and also their sustainability goals, especially with the growing importance of ESG and CSR in the hospitality industry?

Walt Sheffler: Sure, I would talk about that in two phases. One is having the products available. So, for example, alternatives to plastic bottles, right? Unfortunately, there's a tremendous amount of plastic that's used, and having that plastic not available and having alternatives for that. So in the bottled water area, there may be metal bottles available. The other area that's really key is the measuring. In order to ensure you're doing what you profess to do, it's important that you have that measuring. We utilize a lot of different tools and techniques, including AI and labeling of purchases and products that are sustainable, so we're able to provide our clients with a dashboard that enables them to understand where they are on their sustainability journey.

David Millili: And what sets Avendra's international approach to customer care apart from the rest of the industry?

Walt Sheffler: Again, I really believe that unique at-property and above-property service that we offer. The folks that we have calling on hotels, the vast majority have come out of hotel operations, so they understand the day in the life of an executive chef or a front desk clerk, and they understand how important it is that they have the products and services they need to be able to take care of their guests.

David Millili: That's awesome.

Steve Carran: 2024 is almost wrapping up here. What do we see in the near future for Avendra? I'd love to hear what you think.

Walt Sheffler: Sure, so we just recently launched our international geography, and our parent company, Aramark, which is a global entity, has procurement for their traditional businesses throughout the globe and various parts of the world. And what we've been fortunate enough to have is for them to make the investment in Avendra and to overlay Avendra throughout the globe. We're in the process of developing those various cities and countries that we're going to be operating in. It provides tremendous career advancement opportunities for our associates as the business gets bigger, their careers advance, and enables us to hire more people and really continue to develop the expertise we have.

David Millili: So let the folks watching know how they can get in touch either with you or the company. What's the best way?

Walt Sheffler: Sure, the best way is to go to our website, and they can contact us. We'd love to work closely with them.

David Millili: Great.

Steve Carran: That's the end of The Modern Hotelier. Thanks for watching and listening. Appreciate you letting us stop by, Walt.

Walt Sheffler: Thank you.

Steve Carran: Thank you.