Case Study: P&C Morris and the Gleneagles Hotel

This case study covers the following points:

 

      

P&C Morris and the Gleneagles Hotel

Over recent years, the Gleneagles Hotel culinary team has developed a very clear strategy in how it operates it's business.  It identified the need to move forward into new territory where it would atempt to take some of the strain off the kitchen staff, leaving them more time to concentrate on the demanding culinary activities. In order to achieve this, the Hotel culinary management team took the decision to outsource some prepared products directly from committed suppliers. Freshness and quality would be the guiding principles.  They realised that the only way to make this work was to find like-minded individuals and companies who shared the same vision.  Fortunately they already had this attribute in one of their key suppliers, P&C Morris.  Most importantly The Gleneagles Hotel team realised that such suppliers had to be part of the planning exercise if the strategy was going to work effectively.

After all, The Gleneagles Hotel has a reputation to protect as a world-renowned Five Red Star golf resort, set in 850 acres of stunning scenery in Perthshire, Scotland.  It celebrated its 80th anniversary in June 2004 and is a member of The Leading Hotels of the World; one of the Great Golf Resorts of the World; and a founder member of Connoisseurs Scotland, the world class grouping of properties which provide an authentic flavour of Scotland to discerning travellers.  Each of the four restaurants and bars has its own style, but the hallmark of every one is freshness and flavour.   It has an international reputation for the excellence and variety of the dishes prepared in the Hotel's kitchens, which benefit from the finest, freshest produce available from Scotland's larder, and from specialist suppliers around the world.

The Commercial Drivers for Collaboration in the Chain

P&C Morris had been supplying The Gleneagles Hotel for some time, when ten years ago they were asked to source produce from France.  After several attempts to find a suitable product that would remain fresh enough for the exacting standards of one of the world’s top hotels, P&C Morris believed they could produce a better product themselves and what’s more they could involve the Hotel’s culinary team in developing the recipe.  Working closely with the chefs at The Gleneagles Hotel, the new product was a success and ultimately resulted in P&C Morris investing £1m in a new purpose built facility to provide the pate and other high quality products, along with innovative new ideas and first class service to the Hotel.  In total P&C Morris provides Gleneagles with over 1000 different products from its 3,500 product range.

P&C Morris was established in 1975 and is still a family business, with a philosophy to constantly develop and seek out the best products and be recognised as one of Scotland’s leading professional suppliers.  The company develops strategic partnerships throughout Europe and at home supporting many dedicated producers.  This “hands on” approach by an expert team ensures the provision of produce, which is not only of excellent quality but has the taste to match.  Robert Morris, the company’s Managing Director explains, “It is important to us that our products are grown, made, supplied and used by people who share P&C Morris’ passion for fine foods”.

What are the Key Working Relationships and how are they Maintained?

Both enterprises share the same values and commitment to fine foods, recognising the importance of its provenance and sustainability.  The whole supply chain is geared up to deliver on these values.  Colin Bussey, Executive Chef at The Gleneagles Hotel is keen to emphasise that, “It’s not all about price, although it is always important - it’s about quality, seasonality, consistency and focussing on keeping it simple – that’s what makes great food.  Communication, trust and having an understanding of the expectations of each other are vital”.  Colin recognises the benefit in establishing successful collaborative supply chain relationships in achieving these aims and the need to understand the role and the capabilities of every part of the chain.

Robert added, “It’s more than just a buyer/supplier relationship between the businesses.  The partnerships we have developed provides a real opportunity for us to offer so much more to our customers”.  These include:

 

The partnership philosophy is built on trust; mutual respect for what both parties are trying to achieve; an approachable close working relationship; an innovative open book policy to drive costs out of the system; and sharing information where both parties are involved in key decisions on projects.

Colin and Robert agree that none of this could be achieved without a clear end-customer focus and a high commitment to service levels; a desire to constantly strive for improved performance; the commitment of key personnel to take individual responsibility; clear daily communication; a reliable delivery regime and the benefit of sharing fair returns throughout the chain.

What are the Collaborative Business Propositions and Targets Agreed by the Chain?

The need for collaboration is highlighted in The Gleneagles Hotel’s policy of operating on a daily food cost.  Stock is only held one day in the Hotel kitchens and is restocked the next day, thus offering the freshest product possible.  The systems within the supply chain have to work together to minimise waste yet ensure customers are not disappointed if a product is not in stock.  This is achieved through careful forecasting and stock management between the Hotel and P&C Morris.  The reduced supply time dictates that service levels cannot be underestimated, nor can the ability of the supplier to understand the requirements of the Hotel.  Forecasting is planned one month ahead for all foods but a more detailed plan of one week is required for fresh product.  Even within a week this can change dramatically if an unexpected event is added into the mix.

Both businesses encourage the exchange of staff and joint project development activities to encourage innovation and a greater understanding of the challenges each have to address in their day to day responsibilities.  Suppliers are also consulted when menu planning takes place.  When it comes to new product development, members of Gleneagles Hotel Culinary team work with P&C Morris at the facility in Glasgow to perfect the required product.  This environment creates a constant exchange of ideas and creative thinking between the staff of the two employers.

Opportunities to shorten the supply chain are taken at every turn, such as collecting seasonal asparagus from local farmers in Perthshire on the journey north and delivering the product directly to The Gleneagles Hotel.

Examples of the Results of Collaboration

The open book policy normally operates on an agreed margin for P&C Morris on top of costs.  It is supported by a policy of efficient payment throughout the chain.  In order to maintain the sharpness of the open book policy, the staff of The Gleneagles Hotel regularly check prices on the open market and encourage quotes from other suppliers, who must also demonstrate appropriate service levels.  P&C Morris are supportive of this approach, which helps to keep the whole chain market focussed and competitive and provides a platform for discussion and review.  All the partners recognise that there must be limits on the price of product and this depends solely on the demand from the end-customer, which is why Gleneagles places so much importance in listening to its customer base and benchmarking against competitors.

The Gleneagles Hotel are very keen to encourage small, specialist suppliers to provide them with product and they find it is a bonus to be able to use P&C Morris as the conduit route of supply.  P&C Morris can ensure:

 

Long Term Thinking and Mutual Support

Colin Bussey and Robert Morris would agree that the key to making collaborative supply chains work is making sure everyone buys into the vision.  They also need to employ effective forecasting techniques and systems to balance demand and supply; remove hidden costs from the process where possible such as unnecessary packaging; ensure everyone is focussed and understands the market; comply with legislative issues such as food safety matters; minimise bureaucracy and instigate reasonable payment times for suppliers.  Colin emphasised, “You have to respect the need for everyone in the chain to make a fair profit if you are to maintain the necessary quality and service levels.  Success depends on the long term development of the partnerships”.

The future will demand further development and sourcing of sustainable food, reduced food miles and the importance of provenance.  It will provide a great opportunity for small specialist Scottish suppliers with the right credentials and attitude to access a ready-made chain, which is extremely well-placed to support them in exploiting this opportunity.

Conclusion

The key to success has been communication, communication, communication built on a foundation of openness, trust and commitment, ensuring everyone in the chain is clear about the expectations of the customer.  Both Colin and Robert believe that in order to capitalise further on the success achieved to date, it is vital to educate everyone from the producer to the consumer on the values delivered through The Gleneagles Hotel supply chain partners.  The approach has delivered many benefits including innovation, new product development, cost saving efficiencies, joint process improvement and long term thinking and mutual support. It is more than likely that these will continue to go from strength to strength over the next few years.

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