To preserve our past, sometimes we must recreate it. In June 2015, in the Dominican Republic, an important cultural icon of the 1940s was restored to former glory.
The Renaissance Jaragua Hotel & Casino, Santo Domingo, opened its doors again after an extensive hotel transformation.
This major refurbishment, valued at US$ 40 million, now provides 300 guest rooms, 10 new meeting rooms, and the La Fiesta Ballroom, accommodating up to 1,200 guests. Additional features include a sunlit resort-style pool, tennis club, casino, tropical gardens, and extensive sports and fitness facilities.
Challenges and solutions
Complex procurement: using regional consolidation hub to coordinate multiple suppliers
Like all major hotel developments, procurement for the Renaissance Jaragua project was highly dispersed, requiring the coordination of more than 100 suppliers in the US, as well as several in Europe and Asia. Kuehne + Nagel set up a consolidation hub in Miami to receive and process inward cargo, as well as to unpack, check and repack to service the complex needs of the customer. The hotel required staged deliveries to match the gradual progress of the building work.
Further complexity was added by incomplete packing lists and non-standard packaging, especially from some smaller suppliers in Mexico and France. The guidance we provided helped not just this project but will serve these small businesses well in the future.
Disruptions to project plan: local knowledge absorbs extra pressure
When the original delivery schedule was disrupted by delays to the building work, alternative arrangements had to be made at short notice to deal with potential over-stocking. As the planned 3-month order-delivery cycle stretched to 12 months, Kuehne + Nagel was able to use its local contacts to acquire additional third-party storage space. The non-availability of an integrated data management system could have increased the risk of stock losses, but to reassure the customer that every item was accounted for, the local Kuehne + Nagel Hotel Logistics team introduced a parallel manual checklist to verify stock levels and movements.
The logistics operation came under extra pressure when we were asked to extend the project scope from FF&E to include OS&E -- but the same arrangements coped well with the extra shipments.
Customs brokerage complications: import experience brings financial efficiencies
Our extensive logistics portfolio includes the services of qualified, in-house, customs brokerage agents whose local and industry knowledge ensures customs delays are kept to a minimum. On this occasion, third-party consultants were engaged to handle customs clearance in the Dominican Republic which led to confusion over paperwork and delays to consignments awaiting final site delivery. The customer was in danger of being charged excessive demurrage fees as well as having to cope with further disruption to the project schedule -- until our local customs specialists were able to step in to supply complete shipment data to help identify containers being held at the port, to calculate tax exemptions and demurrage.
As well as assisting our customer with customs and import charges, Kuehne + Nagel was able to bring in financial efficiency at other points in the supply chain. For instance, high value goods imported from China ahead of their required date were diverted for storage in a bonded warehouse to delay (and so reduce) tax liability.
Revised schedule means revised accounting: detailed data records streamline the task
At the end of the engagement, the extensive modifications to the original schedule left the customer with the difficult task of revising its financial summary. Using our rigorous data records that showed the movement of every item under our control, we were able to bring clarity to this task, and provide a detailed breakdown of all charges and fees along their supply chain. The customer was able to use this information to create the analysis and reconciliation it needed.
Success. Kuehne + Nagel’s Hotel Logistics team accomplished its aims, efficiently handling the consolidation and export of the FF&E and OS&E cargo for this magnificent hotel. We provided:
- Inventory management at PO level (FF&E) and item level (OS&E)
- Additional storage when required by schedule changes
- Tracking and tracing of containers to the island
- Visibility on transit times, destination demurrage control etc.
In addition, if vendors could not arrange shipments, or faced production delays, Kuehne-Nagel, as the appointed forwarder, was able to quickly step in to ensure rapid, efficient transport coordination and on-time delivery. In total, more than 180 tons of cargo was received in our warehouse, and shipped to the island in stages, as and when needed, in approximately 80 full container loads.
- Peace of mind: able to rely on dedicated hotel logistics provider to find the best solutions
- Specialist procurement and storage meant customer could focus on managing core business
- Financial benefits through knowledge of customs administration and tax regulations
- Clarity in post-project accounting from rigorous freight and storage data
- No stock losses due to additional, manual record keeping