Are Business Travel And Meetings Commodity Purchases?

Putting the term "commodity" in the same sentence as travel and meetings is like adding Lady Gaga as an inductee to the Rock 'n Roll Hall of Fame; you either agree or disagree with the parallelism but there is no denying that it is the big elephant in the room. Do you believe that business travel, meetings and events are commodities? The term caused us to stir in our seats while participating in an NBTA/StarCite-sponsored meeting yesterday.

"It is the right term. A commodity is something that we purchase. And, we purchase services from meeting suppliers," one industry leader said.

"But, the word is used in manufacturing and in commodity markets," another industry leader chimed in. Are travel and meeting services considered commodities?"

"We will ruffle feathers if we use the word 'commodity' and do we really want to stir up controversy?" one industry leader said with a guarded perspective.

"OK, let's find a different word," and it was settled.

With impeccable timing, yesterday came a report that states Air France's boss says travel is not a commodity based on the quality of product and services it provides. Is there a rule that states commodities cannot be purchased using quality ratings?

Another much older article about industry commoditization claims, "It [travel] is sometimes not a commodity because it will need a collaborative process across various departments to set it up." If key stakeholders collaborate and develop criteria that will be used to purchase travel and meeting services, does this restrict us from using the word commodity?

According to Merriam-Webster, one of the meanings of Commodity is "an economic good or service." Call me a geek who loves business books, but in "The Procurement and Supply Manager's Desk Reference," on page 355, it states, "Commodity Strategies: Categorizing purchases by their respective commodities often helps develop a uniform strategy to manage multiple products that have closely related commodity attributes. This can enable the Procurement Department to employ an individual with specific expertise in the commodity (also known as a subject matter expert [SME]) who can focus primarily on managing a strategy for that specific group of suppliers. The added value of this approach is that the organization•s management is given the opportunity to recognize the discipline required to establish specific commodity excellence."

Don't we want uniform strategies and individuals with expertise managing travel and meeting services?

As the job description below validates, it appears that one company is hiring a "Commodity Manager" to develop and execute the Mobility Services (Travel/Events/Meetings) commodity strategy.

What is your opinion? May we use the word "commodity" when referring to travel and meeting procurement?


Commodity Management Specialist, Mobility Services (Travel/Events/Meetings) Job Details Job Description

In this position, the Commodity Management Specialist will be part of a 20 person team and report to the Director of Mobility Services. The mission for the Commodity Management Specialist is to successfully develop/execute the Mobility Services (Travel/Events/Meetings) commodity strategy and fostering a proactive environment that promotes cross-functional support with respective business units while driving cost productivity across the company.


Commodity Management:
-Accurately communicates strategies to ensure proper implementation with the sectors, divisions and locations by collaborating with regional hubs.
-Performs the functions of international market analysis, demand analysis, global demand pooling, supplier selection, and negotiation of price, terms and conditions, to maximize contribution to operating profit and business objectives.
- Completes supplier analysis in order to acquire the best suppliers and to guarantee an optimum supply chain; assists in the coordination of the annual supplier evaluation process and executes formal supplier development plans.
- Maintains regular contact with internal/external interface partners to recognize developments and exert influence accordingly.
- Completes complex reports of defined information and figures to make results transparent and controls purchasing activities on a results-oriented basis.
- Identifies and resolves complex challenges and applies problem-solving skills in order to deal with most situations.

This blog post is syndicated with permission from Debi's T&E Plus blog.