Resource Management in Hospitality
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- Drusilla Day
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1 Unit 11: Resource Management in Hospitality Unit code: D/601/1794 QCF level: 4 Credit value: 15 Aim This unit will enable learners to gain understanding of the principles and application of resource management to a commercial operation, including the contribution of procurement strategies. Unit abstract Procurement is about the input of goods and services and the interface between the supplier and the client. This unit gives learners an understanding of procurement strategies as well as the techniques of financial accounting, and establishes their importance in the sector. The unit shows how procurement contributes to profit and how it helps to maintain a competitive edge. Learners will carry out a review and evaluation of procurement strategies within a named organisation. Learning outcomes On successful completion of this unit a learner will: 1 Understand the principles and application of resource management to commercial 2 Understand the suitability of various forms of finance and taxation available to UK business in general and the hospitality sector in particular 3 Understand how procurement issues and strategies contribute to the achievement of commercial objectives through purchasing power 4 Be able to carry out a review and evaluation of procurement strategies and business performance within named organisations. 59
2 Unit content 1 Understand the principles and application of resource management to commercial Methods: selection; acquisition; maintenance; replacement criteria Principles: procurement strategy; specification; supplier identification; selection criteria; working with specialist suppliers; stock control 2 Understand the suitability of various forms of finance and taxation available to UK business in general and the hospitality sector in particular Internal: managing the elements of working capital to free resources; internally generated funds; retained profits External: short-, medium- and long term; caring; risk and reward Cost of capital: equity and loan capital costs; weighted average cost computations Systems: the main features of income and corporation tax; schedules; rates; personal and capital allowances; tax credits and debits 60 BH Edexcel BTEC Levels 4 and 5 Higher Nationals specification in Hospitality Management
3 3 Understand how procurement issues and strategies contribute to the achievement of commercial objectives through purchasing power Systems and processes: standard specification; tendering; estimating/quoting; methods of procurement eg centralised, contract, lease; Pareto analysis; just in time (JIT); equipment; materials; services; terms and conditions Procurement officer: role; assessing operational needs; selecting suppliers; quality and quantity control; timing; discounts; receipt and control of purchases; wastage factors; company policies; budgetary restrictions Risks: financial; physical; task duplication; direct and indirect costs; effect on the internal and external customer; quality issues; legal implications; effect on process and outcome activities of organisations Managing procurement: profit opportunities; direct and indirect cost-saving opportunities; minimising risk; maximising profit; approved supplier lists; evaluating the best deal ; performance indicators and benchmarking Contract: definition; different forms; parties; essentials for a valid contract; rules of offer and acceptance; terms eg express/implied, conditions/warranties; vitiating factors eg misrepresentation, fundamental mistake; breaches; fraud Sourcing issues: method of supply eg buying products/services, tendering, subcontracting/outsourcing; value for money; hygiene factors; range; choice; service guarantee; legal and contractual compliance; trace origin data; yield; methods of payment; credit and price; negotiating skills Evaluation: communication; finance; delivery; compliance with specified requirements; packaging; industrial relations; attitude to customers; sample testing and defect elimination Pricing management: techniques; negotiating price reductions; controlling or resisting price increases; quantity discounts; prompt payment discounts Management strategies: competition between suppliers; developing profit margins to increase financial returns; releasing cash and capital by minimising stock; negotiating extended credit; determining the right quality for the right application; negotiating and developing delivery schedules 4 Be able to carry out a review and evaluation of procurement strategies and business performance within named organisations Review: standard specifications; terms and conditions; monitoring; redeveloping strategy; contemporary developments; comparing and contrasting purchasing options Evaluate: cost models eg return on investment (ROI), productivity gain, human resource benefits 61
4 Learning outcomes and assessment criteria Learning outcomes On successful completion of this unit a learner will: LO1 Understand the principles and application of resource management to commercial LO2 Understand the suitability of various forms of finance and taxation available to UK business in general and the hospitality sector in particular Assessment criteria for pass The learner can: 1.1 discuss the methods available for managing materials, devising specifications of requirements and the selection criteria to be applied 1.2 discuss the principles involved when procuring equipment and the ongoing requirements over the life of that equipment 2.1 analyse appropriate strategies for the efficient management of working capital to meet a range of financial needs 2.2 evaluate the main sources of finance currently available to UK businesses in relation to their suitability in meeting long-, medium- and short-term needs 2.3 compute personal and business tax liability for sole traders, partners and limited companies LO3 Understand how procurement issues and strategies contribute to the achievement of commercial objectives through purchasing power 3.1 establish a process to manage the procurement function, outlining management strategies in relation to pricing techniques for a given commercial situation 3.2 assess the role of the procurement officer, explaining the importance of the essential components, terms and conditions of a specimen contract 3.3 evaluate the sourcing issues for a given procurement situation, analysing the management techniques used to appraise and evaluate suppliers LO4 Be able to carry out a review and evaluation of procurement strategies and business performance within named organisations 4.1 demonstrate how review and evaluation can be used to assess procurement strategies, for a given commercial situation 62 BH Edexcel BTEC Levels 4 and 5 Higher Nationals specification in Hospitality Management
5 Guidance Links This unit can be linked to the following units: Unit 18: Facilities Operations and Management Unit 19: External Business Environment. This unit links to the following Management NVQ units: B8: Ensure compliance with legal, regulatory, ethical and social requirements D2: Develop productive working relationships with colleagues and stakeholders E1: Manage a budget E2: Manage finance for your area of responsibility E3: Obtain additional finance for the organisation F3: Manage business processes. Essential requirements Purchasing and procurement textbooks must be supported by case studies. Access to procurement sections of local organisations, if possible, provides a useful information source. Part-time learners working in procurement can be used as a resource by sharing their experiences of different business approaches to procurement. Employer engagement and vocational contexts A visiting speaker in resource management, from the hospitality sector, will enhance delivery of this unit. 63
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