LEAD TIMES IN HOSPITALITY FF&E PROCUREMENT
Lead Time Defined
In the hospitality interior design and FF&E procurement industry, lead time is commonly referred to as the amount of time between when a manufacturer commences production and when that same item is delivered to the project site or warehouse. When AKDG discusses lead times with its clients, it is usually conveyed as a number of weeks. For example, the lead time on a hospitality wallcovering product might be four weeks.
Lead Time and “Design Intent”
Our designers use the term “design intent” to describe the way fabrics, finishes, furnishings, and materials are selected to work together as a cohesive whole. Lead-time planning is directly connected to preserving that intent. When delayed decisions or extended production schedules force a series of late re-selections within the same space, the replacement items may not coordinate as seamlessly as the original selections. That is why AK Design Group evaluates lead times across the entire design rather than treating each item in isolation.
“Clients approve a specific vision during the concept and schematic phases of the interior design process,” Andrea Gillespie, Owner and Design Principal describes. “Part of our responsibility as an interior design and procurement company is ensuring a timeline that allows AKDG procurement to deliver that vision as intended. Something can be lost when re-selections become unavoidable, particularly when three or four items in close proximity must be revised. The alternatives may work individually, but they do not always come together with the same harmony as the original selections. Our designers care deeply about protecting that intent because of the thought and effort that goes into creating it.”
Why Lead Times Matter – Renovations & New Construction
Everything begins with the client’s schedule. In most hotel renovation projects, ownership has identified a season or date window to minimize revenue displacement. The goal is to limit the number of rooms, public areas, and operating spaces that are out-of-service, and to minimize the impact of the construction on the guest experience.
With the renovation window identified by the client, several members of the project team must work in close coordination. The general contractor (GC), FF&E installer, hotel operations team, procurement team, and other stakeholders all have responsibilities tied to the same schedule. At that point, the FF&E procurement objective is clear: deliver in the correct sequence and at the right time to support construction, avoid disrupting installation, and keep the renovation moving as planned.
For new construction, the pressures are slightly different but no less significant. Delays can extend construction loan carrying costs, increase warehousing and handling expenses, and push back the date the hotel begins generating revenue. Every additional day before opening is another day of interest, overhead, and operating expense without the cash register ringing. That is why FF&E procurement must stay closely aligned with the construction schedule – with delivery, storage, and installation all managed to support the planned opening date.
The Lead Time Math
Our team builds every lead time estimate as an aggregated total rather than relying on a single number from a manufacturer. David Gillespie, and Owner & Managing Principal with AKDG, said the manufacturing time most people focus on is usually just one variable in the equation. “The primary number most procurement companies quote is how long it would take to manufacture a specific FF&E item. However, added to this is the procurement purchase order process, shop drawing reviews, time in transit, customs considerations, holiday delays, and other factors. If the full lead-time equation is not fully accounted for, a project can fall weeks behind schedule, resulting in lost revenue and costly remobilization by contractors and installers.”
Laid out chronologically, here is what typically goes into that total:
For an item without fabric (case goods, lighting, and similar categories):
- Purchase order placed with the manufacturer
- Invoice received from manufacturer, reviewed, and deposit paid
- Shop drawing review (depending on the degree of customization)
- Manufacturing duration (the manufacturer-quoted production time)
- Ocean freight to port (if necessary)
- Customs clearance (if necessary)
- Domestic/inland freight to the project site
- Consideration is given to holidays
For an item with fabric (upholstered seating and similar categories):
Everything above applies, plus the following:
- A physical fabric sample sent to the design team for approval (because the fabric in a sample book can vary significantly from actual production)
- A fire-resistant and/or stain-resistant finish is often applied to the fabrics by a third-party finisher. Add the time-in-transit from the fabric manufacturer to the finisher should be added. Also add the time to apply the finish.
- Additional time in transit from fabric finisher to the seating manufacturer.
Special Consideration: Carpeting, Window Treatments, & the “Holiday Buffer”
Some FF&E categories carry nuance of their own – the kind of detail that does not show up until you are deep into a lead time analysis.
Flooring is usually one of the first things the General Contractor needs from the FF&E procurement company, because many of the additional furnishings will sit on top of it. As a result, flooring lead times earn quite a bit of scrutiny from our team at the onset of a new FF&E procurement project. Carpeting, specifically, is one category where owners are often surprised by the production time. Many expect 6-8 weeks, but a 12-week production time for custom product is common. Because carpet is manufactured domestically, it does not need to cross an ocean – which skips the ocean freight variable.
Window treatments are an excellent example of how project-specific conditions can affect lead times. Before production can begin, the installer must visit the hotel and field-measure every window opening. On one recent project, the hotel had an unusually large amount of exterior glass, which required a large number of custom-sized window treatments. The greater the quantity and level of customization, the more time must be allowed for field measuring, fabrication, and installation coordination.
Finally, holidays are a factor for every FF&E category, regardless of what is being ordered. A domestic mill closing for a week around the Fourth of July, or freight slowing around Thanksgiving, can shift a delivery date. AKDG will typically build in a week of buffer for delays tied to any given holiday. None of those compare, though, to the scale of the slowdown caused by Lunar New Year, which we will explore in a future post.
Reporting: Making Lead Times TRANSPARENT & ACTIONABLE for AKDG Clients
With this many moving pieces, AK Design Group tracks every FF&E item against a project’s construction and installation milestones. Each category is color-coded based on how much runway is left: green means an item is on track, yellow or orange means the timeline is tightening, and red flags something that needs a real conversation with the client.
AK Design Group provides what we believe to be best-in-class reporting on project timelines, including clear visibility into procurement lead times and critical order dates. We are committed to our clients, and to the employees responsible for leading these procurement projects, and we strive to communicate candidly and clearly about when orders must be placed to achieve the project’s intended outcome.
Hidden Factors That Can Move a Lead Time
Even a well-planned lead time estimate can shift once an order is underway. A few of the most common factors our team watches for:
- Shop drawing revisions. This is one of the most controllable factors in the whole process, which is exactly why we treat it that way. Coordinating efficiently with the manufacturer, setting clear expectations up front, and holding manufacturers to their specified turnaround times all keep this step from adding unnecessary time to a highly customized piece.
- Shipping route changes. An overseas canal closure can turn a four-week ocean transit into six, sometimes with little advance notice.
- Customs and port capacity. Staffing levels at customs and ports affect how quickly containers move once they arrive.
- Labor actions. Rail and port labor actions have added delays to domestic freight in recent years, affecting anything moving cross-country by rail before final truck delivery.
AK Design Group specializes in interior design and FF&E procurement for hospitality projects. Contact us today to start a conversation.