Can you please detail a brief history of Hilton Supply Management (HSM), including any notable milestones?
HSM was founded in 1967, and we are proud to be the world’s largest hospitality-focused supply chain services provider representing all categories of spend.
Our reach extends from Food & Beverage (F&B), Operating Supplies and Equipment (OS&E), energy, property operations, and Furniture, Fixtures & Equipment (FF&E) project procurement services to corporate spend categories such as technology, marketing, brand activation, professional services, and beyond. Our strong pipeline of 3000-plus suppliers, coupled with a built-in owner/operator community, helps us maintain close connections between our customers and our global supply chain, strengthening our ability to mitigate risk and navigate disruptions.
When we launched our HSM 2.0 transformation well before the pandemic started, we began a journey to ease the complexities of supply chain dynamics and invest in the reinvention of our function. We improved our infrastructure, expanded our proficiency, and doubled down on analytics. Our organization was ahead of the curve in this respect, investing in the future proofing of our supply chain at the right time, which means that when things got really tough at the pandemic’s onset, HSM was better positioned to weather the storm than anyone else in the industry.
Because of this, we have seen demand for HSM rise over the last few years. Unequivocally, we have seen that in times of scarcity, size matters. Scale matters.
Our number one product at HSM is our expertise, and in recent years, supply chain expertise has become an extremely valuable commodity. Thanks to our forward thinking and upward momentum, HSM is experiencing another period of accelerated growth. In the last three years alone, our non-Hilton customer base has increased by over 90 percent, which is an exponential growth rate that is truly unparalleled in our organization’s history.
Recently, we signed our 15,000th property – that’s 1.9 million rooms – and we believe we’ve only just scratched the surface in terms of HSM’s growth potential. For properties who have not had the experience of partnering with a procurement provider solely focused on hospitality, I encourage them to give us a call so we can demonstrate the tangible value of teaming up with a truly dynamic and powerful group purchasing organization.
Tell us about some of the other brands that you serve and engage within your operations?
We represent more than 130 unique hospitality brands. First and foremost, we proudly support and engage with the 22 incredible brands in the Hilton enterprise, from Waldorf Astoria to Hampton by Hilton to the two newest brands in the Hilton family, Spark by Hilton and Project H3 by Hilton (working title). HSM has been tapped to serve as the dedicated procurement provider for both new brands, and our team played an integral role in value engineering prototypes, design packages and product selections that will enable owners to move from groundbreaking to grand opening with optimal efficiency and operational ease. We are incredibly excited to have a hand in bringing Hilton’s first premium economy (Spark by Hilton) and residential extended stay (Project H3) brands to life in markets across the country.
Beyond Hilton, HSM maintains a robust portfolio of independent and third-party hospitality brands. More than half of our properties today fly under flags other than Hilton, which is a testament, I think, to the caliber of industry expertise HSM brings to the table. One of our key differentiators is the ability to drive value and leverage our supplier relationships at scale, while simultaneously paying attention to the myriad details and nuances that accompany the highly specific needs of each individual brand. HSM’s storied history in hospitality and decades-long partnerships with brand management teams significantly enhances our ability to tailor products, services, and solutions to the needs of each brand.
At the end of the day, our team is friendly, we’re flexible, and we pay close attention to detail. HSM’s global size and scale is intrinsic to our success, of course, but it’s these factors – particularly our unique ability to flex and meet owners, operators and suppliers where they are – that I think of as our ‘secret sauce.’ While we have standard operating procedures in place, we don’t engage with any of our customers in exactly the same way. Instead, we hone in on their specific needs, capabilities and opportunities for growth, working in tandem to create strategic supply chain solutions that will help our partners maximize their revenue.
What does your geographical footprint look like and how does it aid your capabilities?
Our geographical footprint has grown significantly in recent years to help us better serve a rapidly growing global customer base.
In our conversation with Supply Chain World in 2018, HSM was supporting about 7000 properties in 94 countries and leveraging a nearly $5 billion spend.
Just five years later, we are proudly serving over 15,000 properties in 140 countries and territories, backed by $11 billion in purchasing power – and our physical growth and infrastructure certainly tells that story!
Today, HSM operates nine regional offices around the world. Stateside, we have teams in Chicago; Los Angeles; Memphis, Tennessee; and McLean, Virginia (in concert with Hilton’s global HQ), and our international offices are located in Frankfurt, Germany; Watford, England; Dubai, UAE; Shanghai, China; and Singapore.
Our expansive geographical footprint aids HSM in our capabilities because having boots on the ground really matters. It helped us, for instance, to have a local team in place in Shanghai during Covid. And as the EMEA region continues to navigate challenges ranging from geopolitical conflict to natural disasters, having teams on hand to glean insights and offer support in real time makes a marked difference in our operational agility. Because we are a truly global company, we are better positioned to identify trends, show up for our customers and stay ahead of the curve – and we hear this first and foremost from the customers we serve, who feel the HSM difference and thank us for getting them the timely insights and information they need to successfully grow their business.
Even now, with supply chain pressures gradually easing at last, managing the procurement and distribution of products is complex, complicated work. It’s our job at HSM to take on those complications and make life easier for our customers, negotiating the best possible pricing, service solutions and partnership opportunities for our properties around the globe.
Can you speak further regarding your new journey, where you have brought your core team and vendors closer to your supply chain and began to seek more sustainable and responsible avenues?
As a starting point, while we align our teams regionally, we have adapted our globally oriented category management teams to more easily engage local suppliers and better support responsible sourcing initiatives. By consolidating our spend, aligning around global suppliers, tapping into local resources, and fostering an atmosphere of collaboration and creativity among our key stakeholders, HSM has successfully taken several steps to fireproof our supply chain while embedding sustainable practices along the way.
A few recent examples include transitioning to on-screen/in-room digital signage and eliminating printed menus and directories, providing our hotels with a more hygienic, cost-effective, and sustainable response to North America’s dwindling paper supply.
We also re-engineered our brand menu offerings to incorporate (and spotlight!) local flavors and ingredients, delivered straight from the source. This shift simultaneously served to address ingredient shortages, enhance the guest experience, reduce transportation costs, and lessen our environmental impact, all while increasing our social impact in the communities where our partnering properties are owned and operated.
We developed new partnerships with suppliers of plant-based proteins as a reflection of our guests’ evolving tastes and the imperative to reduce our collective carbon footprint.
Moving forward, we believe we are better positioned than anyone else in the hospitality supply chain industry to effectively introduce changes of this nature. That’s because HSM has perpetually held an obsession with cost, quality, and logistics. Our experts consistently see, and seek out, new opportunities to take a deeper dive, expand our network, and rise to the next occasion by introducing new levels of efficiency and added value for our global customer base.
How do Hilton’s practices reflect its environmental responsibilities?
Integral to Hilton’s environmental, social and governance (EGS) strategic framework, Travel with Purpose, is a commitment to drive responsible travel and tourism globally while enhancing the long-term value of our company. Across our global portfolio, Hilton has set ambitious goals that are continually re-evaluated to align with the latest developments in climate science. Our 2030 goals are paving the way to net-zero operations through climate action and destination stewardship. From goals to reduce waste and water usage by 50 percent to cutting our carbon emissions among our managed portfolio by 75 percent, robust governance will assure we are making progress toward our goals – and measuring said progress with integrity and transparency.
Our Travel with Purpose strategy is integrated throughout our operations and across our value chain. And, within HSM, we have a dedicated team that focuses on how we can integrate sustainability into our procurement and responsible sourcing efforts. In partnership with our suppliers, HSM’s OS&E category managers led the sourcing of elevated bath products for all Hilton brands and negotiated the companywide shift to non-refillable bulk dispensers – but our team also ensured an end-of-lifecycle recycling solution was in place at time of launch. This means Hilton guests at the time are getting the product integrity they’re asking for, Hilton hotels are improving operational efficiencies, and Hilton as a company is reducing our single-use plastics by more than 50 percent and implementing a zero-waste-to-landfill program. That’s the kind of soup-to-nuts sustainable program development that makes me incredibly proud to be part of this organization.
Other examples of sustainability in action include proactive solutions to pending ESG-related regulations, such as California’s ban last year on single-use plastic food ware. In anticipation of this new legislation, we introduced new supplier relationships to our partnering properties to help them effectively prepare for a timely transition. We are also updating our internal tools to reflect a centralized focus on ESG initiatives. For instance, we have realigned our Request for Proposal (RFP) tools to be more inclusive and ESG-focused, providing built-in guidance around sustainability and responsible sourcing that our category managers can leverage in RFPs.
We recognize, too, that our capacity to make a sustained impact is largely a reflection of the degree to which our supplier partners are embracing their own conservation, sourcing, and waste reduction imperatives. HSM strives to be an active partner in this process, catalyzing the journey for those suppliers at the beginning of their ESG path.
Last year, Hilton earned its first EcoVadis Gold medal for sustainability, placing in the top five percent of over 100,000 companies assessed. And through our partnership with EcoVadis, many of our suppliers – particularly those identified as high-volume or high-risk – are now receiving assessments of their business model and operations to help identify areas of improvement.
This means HSM is creating an ecosystem designed around sustainable process improvements and informed change. A growing number of our suppliers are making the transition to a sustainable infrastructure for myriad reasons, and we’re leveraging our global reach and network to facilitate the process of establishing and achieving our partners’ ESG goals.
What kind of new technological advances have you been implementing?
Technology has been integral to our supply chain stabilization efforts, both during the pandemic recovery process and, more recently, in the wake of the travel industry’s booming resurgence.
Our simplified, scalable eProcurement solutions are one of the key differentiators customers experience when partnering with us – particularly as everything we do is done through the lens of hospitality. Our digital procurement platform enables efficient, easy online ordering for our customers, coupled with the ability to search a vast array of quality products from our global pipeline of over 3000 suppliers.
Customers today are looking for greater flexibility, choice, and control, which is why we partner with a number of technology vendors to ensure we provide a wide range of options to meet our customers’ individual procurement needs. We also understand that our customers want direct access to market-specific information and analytics, which is why we provide real-time inflation and pricing analyses, as well as program adoption reporting to help maximize savings. By leveraging machine learning and AI to analyze spend data on both the micro and macro levels, we are becoming increasingly well positioned to help our customers optimize their savings through program spend analytics.
Additionally, we are now working with a group of our customers to implement ‘touchless invoicing,’ which allows them to procure, receive and pay suppliers without any manual processing. The touchless invoicing process makes on-property accounts payable efforts far more efficient, resulting in more timely payments to suppliers and easier spend tracking at the property level.
For our partnering suppliers and distributors, we engage industry-leading platforms that offer full visibility over HSM transactions to aid in savings calculations and spend forecasting. And, we leverage our entire technology platform to push out timely, relevant communications to customers and suppliers, ensuring that our partners have the right information in hand to drive data-based decision-making.
How do you manage your external relationships? To what extent does Hilton’s success rely on them?
At HSM and Hilton, we understand that the supply chain doesn’t run without suppliers. Our suppliers and distributors are an integral part of our operations and really serve as an extension of our organization, which means we are extremely invested in helping these partners succeed. We are also fortunate to have relationships with suppliers and distributors who are equally invested in our customers’ success, operating as true partners to stakeholders across the HSM value chain.
HSM has been in business for more than 55 years, and believe it or not, some of our supplier partnerships actually date back that far. Longevity like that is really incredible in this day and age – and it brings the stability, the expertise and the camaraderie that our customers recognize as the HSM difference. Beyond a doubt, our ability to navigate the complexities of the past few years is a testament to the strength of our supplier relationships and their investment in our partnership.
And, that’s a dynamic that we seek to ‘pay forward’ with our suppliers, connecting them with all the access and benefits afforded by our scale and global reach. Working with HSM means that your programs are relevant around the globe. Where we exist, you exist. So as a supplier, we try to make it a no-brainer to team up with a global procurement house like HSM, whether that’s partnering on sustainable initiatives, anticipating new solutions to comply with public policies or keeping a close finger on the pulse of evolving consumer trends so we can adapt our products and services accordingly.
HSM is also leading the industry with its award-winning Supplier Diversity program, which led Hilton to spend more than $334 million with small and diverse suppliers in 2022. Earlier this year, HSM ranked number three on DiversityInc’s ‘Top Companies for Supplier Diversity’ list – the only hospitality company represented – and this is a space where we are continuing to heavily invest the resources, energy and infrastructure to create a more level playing field for small and diverse businesses across the globe.
Ultimately, we work to maintain awareness of our interconnectedness with the suppliers, manufacturers and distributors who keep the supply chain moving, and we strive to serve as trusted advisors to every partner within our global network. Almost daily, we receive a note of appreciation from one of our suppliers emphasizing their regard for our partnership, and to me, these affirmations of shared value illustrate more about our culture here than any metric or measurement possibly could.
What’s your working culture like?
HSM today looks and feels quite different from the HSM of several years ago, and I love to talk about our team’s internal contributions to the company’s growth and evolution. Ours is a lean, nimble and truly diverse team – and I don’t just mean diversity in terms of our geography or background. I mean that our range of experience across HSM is truly unique.
We have traditional procurement talent on our team, certainly, but we also have colleagues who have joined us from various brands, from HR, from marketing and from other industries. We have folks that grew up in hospitality and know hotel operations working alongside folks that came from retail, or logistics, or management consulting. Our intentional focus on talent diversification has created this collaborative, problem-solving mindset that I have not encountered anywhere else that I’ve worked.
Our team-driven, solutions-oriented approach makes a significant difference in how we show up to our customers, and every time I speak with a customer, they tell me that they feel the ‘HSM difference.’ These are the intangibles you get when working with HSM – this combination of our industry expertise, our hospitality heritage, and the incredible diversity of perspectives and problem-solving skills – and that’s what keeps our customers coming back.
I also think this culture of collaboration and outside-the-box thinking is what keeps our team members engaged and invested with the organization. We’re very intentional about fostering a culture of appreciation and shared recognition, from the shoutout section in HSM’s bi-monthly newsletter to the group excursions and celebrations we take part in, such as our team’s recent participation in the Washington, DC Pride Parade. Supply chain business is challenging, thought-provoking work, and we recognize the vital importance of having fun together. Our commitment to employee engagement is reflected in our designation as number two on Fortune’s list of Great Places to Work in the US Hilton has also achieved top workplace honors in more than a dozen other countries around the world, which serves as a testament, I think, to our organization’s tangible investment in the cultivation of an affirming, inclusive and engaging workforce culture.
You’ve been with Hilton for a long time now. How does the business today differ from when you initially joined and how have you grown alongside it?
For me, it doesn’t feel like it’s been a long time at Hilton – every day feels fresh and new – although I recognize that quite a few years have passed since I came on board. What’s the old adage? Time flies when you’re having fun and shoring up a global enterprise?
All joking aside, I have had the good fortune to wear many hats in my tenure at Hilton and HSM, and I’ve also had the distinct privilege of working with incredible people and industry partners every step of the way. One of the best draws for me, both professionally and personally, is the atmosphere of innovation, collaboration, and agility we are able to cultivate as a team. Collectively, we embody a truly entrepreneurial spirit throughout HSM – our nimble nature and ability to implement new ideas quickly is one of the things I value most about working here.
I’m also incredibly grateful to be part of the HSM growth story. When we initiated HSM’s 2.0 transformation, it was a watershed moment. We started with a plan and it’s amazing to witness the evolution and to see our team continue to exceed performance expectations. Watching our strategy come to fruition has been, hands down, one of the brightest experiences of my career.
Regarding my own professional (and personal) growth, thanks to an incredible community of mentors, leaders, and team members, I’ve grown to be a better leader and am always seeking out new growth and development opportunities – just as we are continuously looking for new avenues to enhance our service model and improve performance at HSM.
Every day, even after 12 years, I learn something new here. I feel very fortunate to have the space, the team and the industry partners that afford me this continued opportunity to learn, innovate and grow.
Where would you like to see the company in five years’ time?
I love this question – although the events of recent years have also given us all some renewed perspective on holding predictions lightly, as we know nothing is certain.
That said, in five years I would like to see HSM as five times bigger! We anticipated the continued growth of our global customer base, including in Europe, Middle East, Africa (EMEA) and Asia-Pacific (APAC) regions, and look to achieve a five times growth rate of our current customer base. While we may consider expanding HSM into other verticals in future years, our focus remains on hospitality at the present time.
Overall, in five years’ time, I’m excited to see HSM realizing the same level of growth and success we can measure from our last conversation with Supply Chain World five years ago. And perhaps five is the magic number, across the board. I’d like to see us five times bigger across the globe.
Is there anything else you would like to add?
I’d like to personally send a shoutout to every supply chain professional and organization around the globe. We, as a community, have made it through some of the worst years our industry has ever seen, and while these past few years have been incredibly challenging, it is also incredibly gratifying to see the supply chain world get the newfound recognition and awareness we have all so rightfully received.
I also want to applaud the inspiring team members that make HSM such a powerhouse. Everything we have been able to accomplish is a testament to their persistence, camaraderie, and brilliant problem-solving skills.
We at HSM believe that an agile, innovative supply chain is integral to the strategic success of our enterprise, our brands, and our owners. It’s truly great to see so many other industries realizing the vital importance of supply chain to their business development and to the world at large. So, here’s to our fellow supply chain professionals everywhere, and may the coming seasons bring us shared success and sustainable growth.