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Food Purchasing Control

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Budgeted food cost goal. Labor and type of service ... Purveyors / Food Shows / Specialized training. Use of SPS and other Standards ... – PowerPoint PPT presentation

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Title: Food Purchasing Control


1
Food Purchasing Control
  • HRT 276 Chapter 4
  • Part II Food Control

2
Thanks to
  • The information in this presentation comes from
    Chapter 4
  • Principles of Food, Beverage, and Labor Cost
    Controls
  • By Paul R. Dittmer
  • 7th Edition. 2003. New York John Wiley Sons

3
Introduction to Part II
  • Purchase
  • Receive
  • Store
  • Issue
  • Produce
  • Sell Serve

4
Introduction
  • Purchasing decisions are driven by these key
    components
  • Menu
  • Product specifications
  • Purchase method
  • Product forecasting
  • Other factors
  • Budgeted food cost goal
  • Labor and type of service
  • Equipment, storage space, and layout of facilities

5
Purchasing The key factors
  • Menudetermines needs
  • Product specificationsdetermines quality
  • Purchase methoddetermines price and supplier
  • Product forecastingdetermines quantity

6
Responsibility for Purchasing
  • Manager, Chef, Steward
  • The book uses the steward
  • The primary issue in this step is to limit
    purchasing to one person if possible

7
The Control Process (from Ch. 2)
  • Establish standards and procedures
  • Train
  • Monitor performance
  • Take appropriate action
  • With people
  • With products

8
Definitions
  • Perishables
  • Comparatively short shelf life or useful life
  • Think fresh purchased for immediate use
  • Its a quality thing in most cases
  • Can be more costly and more wasteful
  • Non-perishables
  • Comparatively longer shelf life
  • Do no deteriorate as rapidly if stored closed and
    at proper temperatures

9
Standards Developing Standards
  • The primary purpose of establishing control over
    purchasing is to ensure a continuing supply of
    products
  • In sufficient quantities
  • At the appropriate quality for its intended use
  • Purchased at the most favorable price
  • Standards dictate
  • Quality
  • Quantity
  • Price

10
Standards Establishing Quality
  • Before the first purchase, one must determine
  • Type of food (menu-based decision)
  • Quality of food (market-based decision)
  • Brand
  • Size
  • Packaging
  • Grade
  • Degree of freshness
  • Other

11
Standards Establishing Quality
  • To produce meals of desired and consistent
    quality, then the raw products must be of desired
    and consistent quality
  • STANDARD PURCHASING SPECIFICATION
  • Commonly abbreviated SPS
  • These specifications dictate quality

12
Standards Establishing Quality
  • SPS
  • Establishes exact requirements in advance
  • Useful in menu preparation and development
  • Help eliminate misunderstandings between steward
    and purveyors (vendors)
  • When distributed to more than one purveyor,
    competitive bidding is possible
  • Limit or eliminate verbal descriptions each order
  • Aid in proper receiving

13
Standards Establishing Quantity
  • Principles are based primarily on useful life of
    the product
  • Perishable
  • Non-perishable
  • Other considerations
  • Projected business volume
  • Storage
  • Financial desires (cash-on-hand vs. on-shelf)
  • Purveyor minimums (quantity or value)

14
Standards Terms and considerations
  • Storage locations
  • Permanent locations / Limited Locations
  • Shelf tags and labels
  • FIFO
  • Bin Cards
  • Computerized assistance

15
Standards Establishing Quantity
  • Perishables
  • Par or Par Stock
  • Minimum vs. maximum vs. always on-hand
  • Defined for our use as the quantity of any
    item required to meet anticipated demand in some
    specific upcoming period of time
  • The par level is established using historical
    information (remember the assumptions!)
  • Volume projections may dictate that more than
    normal is needed.

16
Standards Establishing Quantity
  • Ordering Perishables
  • The par (standard for quantity) is established
    and used in calculating the needed purchase
    amount
  • Steward conducts a daily physical inventory (or
    at least a physical observation)
  • Par is sometimes called a build-to value
  • So, par is what we need
  • Inventory is what we actually have
  • Order is the difference between par and actual
  • More may be ordered as par can be considered a
    minimum

17
Standards Establishing Quantity
  • Ordering Perishables (continued)
  • Stewards Market Quotation List (figure 4.2)
  • For all purveyors holding the SPS for
    perishables, daily quoting is possible (price
    issue)

18
Standards Establishing Quantity
  • Non-Perishables
  • Par methods can be used
  • The par level is established using historical
    information
  • Storage is a greater issue as the time period
    between orders may be longer
  • Issues
  • Storage / Permanent Location
  • Theft
  • Waste FIFO
  • Labor for maintenance

19
Standards Establishing Quantity
  • Ordering Non-Perishables
  • Periodic Order Method
  • Amount required for upcoming period 40
  • - Amount presently on hand - 12
  • Amount wanted on hand at the end of the 15
  • period to cover needs until the next delivery
  • Amount to order 43
  • Ideally, physical inventory is used to determine
    on-hand amounts

20
Standards Establishing Quantity
  • Ordering Non-Perishables
  • Perpetual Order Method
  • It is like a check book (In, Out, Balance)
  • Requires some type of tracking
  • Perpetual Inventory Cards (not bin cards)
  • Paper or Computer
  • Reorder Point - the amount at which a new order
    is placed
  • Reorder Quantity the amount ordered regularly
    once stock reaches the reorder point

21
Standards Establishing Quantity
  • Ordering Non-Perishables (continued)
  • Perpetual Order Method
  • Par stock 32
  • - Reorder Point - 15
  • Subtotal 17
  • Normal usage until delivery 10
  • Reorder quantity (minimum needed) 27
  • Note that the standardized Reorder Quantity is
    24, so a determination of number of cases is
    needed (case may be 6, 12, 24 of each item)

22
Standards Establishing Price
  • Quality what to buy
  • Quantity how much to buy
  • Price how much to spend
  • Factors
  • Quality / Market segment
  • Quantity / Economies of Scale
  • Seasonality of product
  • Location
  • Availability of more than one purveyor

23
Standards Establishing Price
  • Price Quote
  • Daily
  • Longer (bulk buying, commitments, etc.)
  • Methods
  • Phone
  • Fax
  • Email / Web / Direct On-line Links with Purveyor
  • Salesperson
  • Mail

24
Standards Establishing Price
  • Perishable
  • Daily
  • Weekly
  • More than one purveyor is likely
  • Non-Perishable
  • More likely one primary purveyor and one back-up
  • Individual items may vary between purveyors, but
    keep the big picture in mind

25
Training for Purchasing
  • Training of the Purchaser
  • Formal education
  • On-the-job training
  • Owner / Manager
  • Purveyors / Food Shows / Specialized training
  • Use of SPS and other Standards
  • Use of general policies and procedures regarding
    the operation that relate to purchasing
  • Knowing the other steps in the flow of food

26
Monitoring Purchasing
  • Purchasing
  • Standard Purchase Specifications (SPS)
  • Monitor purveyor performance
  • Monitor purchaser performance
  • Who does what?
  • Owner / Manager works with purchaser (steward)
  • Both Owner or Manager and Steward monitor SPS and
    purveyors
  • Steward must have two-way communication with the
    receiver

27
Taking Corrective Action
  • With Purchaser
  • Further training and development
  • Re-training
  • Discipline
  • By Purchaser
  • Contact with salesperson
  • Contact with purveyor directly
  • Any variation from standards must be
    investigated people or product

28
Purchasing Centralized Purchasing
  • Needs of individual operations (units) are
    consolidated to a central location
  • Total needs are purchased
  • Purchased items be distributed to individual
    operations by the purveyor or by the company
    (central location)

29
Purchasing Centralized Purchasing
  • Advantages
  • Volume pricing
  • More choice of purveyors may lead to better
    quality
  • SPS more likely to be met
  • Larger inventories can lead to more reliable
    supply
  • The possibilities for dishonest purchasing in
    individual units are reduced

30
Purchasing Centralized Purchasing
  • Disadvantages
  • Restricts individual unit operators freedom
  • Selection (variety)
  • Needs (timing)
  • Individual unit operators can not take advantage
    of local specials
  • Limits individual menu variations

31
Purchasing Standing Orders
  • Delivery without order
  • Specific quantity on a set day
  • Building an item up to a specified level
  • Convenient
  • Possible waste or excessive cost

32
Purchasing Computer Applications
  • Simple
  • Excel
  • Database
  • HOH only
  • More complex
  • HOH and FOH communication
  • May include
  • Recipes
  • Labor
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