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For Hospitality Professionals and Food Connoisseurs
Issue #26 June 29, 1998
In This Issue
* Feature Article
What is purchasing? If you ask ten restaurant owners, you'll get ten different answers. Webster's defines purchasing as "to obtain by paying money or its equivalent." I suppose that describes purchasing in a nut shell, but as someone who makes their living purchasing food and supplies that doesn't do it for me.
To me, the definition of purchasing is more intricate. The definition of purchasing needs to include development of product specifications, vendor evaluation and selection, bid solicitation, order computation (determining quantity), comparing prices, order placement, proper receiving, product evaluation, feedback and yes, payment. Now you know why I don't work for Webster's.
Without any one of these elements, the definition of purchasing loses something. It works the same way in real life too. Take away a step and your purchasing program loses something. In many independent operations that I have worked with, the purchasing program consists of a yellow pad, a Rolodex of phone numbers and a chef who spends about half an hour a day calling in orders. This method may have worked years ago, but not in today's competitive environment. You can bet that the chains next door and across the street have a bunch of experts in their headquarters analyzing every item that goes into their operation. They put a lot of thought into the product specification, who brings it, how it is handled, what price they are paying for it and if there is a better or more cost effective product available. Every decision they make is a fully informed one. If you are going to be financially successful today you too need to make informed decisions. You can't afford to make decisions by default.
Designing and implementing a successful purchasing program is not hard. It does however, take time. In future articles, we will take a look at each step along the way, but for now here are a few things you can do today to improve your purchasing program and start saving money:
1. Decide whether you are in business to make friends or money. It's great to have strong professional relationships with your suppliers, but this is not the best place to make friends.
2. Don't take relationships for granted. In the beginning, almost every client tells me, "I have been dealing with Joe/Jane Salesperson for years, he/she takes great care of me." This is usually a telltale phrase that indicates that the buyer is too complacent. We would all like to believe that the people we choose to do business with have our best interests in mind. The truth is, everyone has his or her own best interests in mind. This is not a fault, just human nature.
3. Ask your supplier how much an item will cost before placing an order. You will be surprised how much this will accomplish. You will be sending them the message that you care about cost.
4. Have two acceptable suppliers for each item and request bids from both. Not only will this help you in terms of price, but will also help with availability if supply becomes tight on an item.
5. Make two phone calls to your suppliers. The first call should be for pricing, and the second, a few minutes later, to place an order. This lets your suppliers know that you are checking out your options.
6. Ask for prices on more items than you expect to buy at that time. This will keep your suppliers wondering if they are loosing items to another vendor with a lower price.
7. Know what your supplier or sales associate needs. With a large broadline distributor this is simple, your rep's job is to sell you as much as he or she can for the highest possible price. Most sales reps are paid on commission and his or her income is based on profit not volume. With smaller suppliers, their needs might include product volume or cash flow (read fast payment.) If you can fill the suppliers need, you are in a strong position to have your needs met.
8. Keep your supplier's costs in mind. If you can get two $600 deliveries per week instead of three $400 deliveries, this will save your supplier the cost of a delivery and enable him to charge you less. Don't kid yourself, somewhere along the line you'll pay for that special Friday night delivery!
9. Spot-check your deliveries. If it is sold by count, count it; if it is sold by weight weigh it. Any time you spend negotiating the best deal in town is wasted if you do not receive the right product at the price you agreed to. Even the honest mistakes cost you money.
10. No purchase is complete until it is paid for. "I give them all this business and now they are hassling me for a check!" No one "gives business." You do business together. Vendor financing can be very costly. Understand that the price you pay and the quality and service you receive are effected by your willingness to pay within the terms you have agreed to.
Purchasing takes time but if the time is invested wisely, you will see the dividends. Money you save in purchasing tends to flow directly to the bottom line of your income statement. The biggest obstacle to a successful purchasing program is taking the first step.
James Covart is the President of Hospitality Services Group. HSG, provides purchasing services to member clients and is available for consultation to the industry.
Let's hear your thoughts on the process of purchasing...write to email@example.com.
The Waiter's Revenge
Swine and Dine - Los Angeles
Jack Mauro hit the problem of our restaurant service right on the head. Customer service to the restaurant visitors, which are paying their salary is absolutely almost non existing anymore.
Restaurant Owners are not taking the time to hire the right people for their establishment, and not spending the time to train those people accordingly.
Sure it is important that their has to be a turnover on tables in a restaurant so they will make a profit, but not for the sake of good service and good food, which the customer came for.
Service is an art form and with today's people which perform this service it is a sales form. The mentality is the more people I serve fast, the more tips I'll get. Well, wake up - more and more customers are looking for good service. When they are not receiving that service they will not give good tips and they will probably not come back to your establishment.
Good service and good customer service will make a Restaurant or a Hotel successful today. There are no other alternatives - try to be the best at what you do and provide what the customer is looking for.
I read with interest the article "Brave New Order" by Jack Mauro. I am sending a copy to my three managers. Service is the area that our restaurants are always trying to improve, along with labor and food costs, service management takes alot of our working time. Today's guest is more intelligent and experienced. Dining out in restaurants is a common activity for everyone living in metropolitan areas which allows everyone a very broad basis for comparing service of many different restaurant experiences. Today's guest KNOWS exactly what is pleasing, acceptable, appreciated and expected for SERVICE and quality service is defined by their expectations. Experiences such as visiting Disney World where the streets are cleaned constantly and everything is planned around SERVICE, or dining at an expensive restaurant where the car door is opened and the chair is pulled out for the guest while the napkin is draped over their lap by the mitered help to define Service. These experiences in visiting places that provide SERVICE (address:just about everywhere) are recorded (saved) in the brain (file) and are used to compare (view) other new experiences related to SERVICE where they decide (edit) just how well the service was given. They will then decide whether they will return (go back) or not return (delete). Of course there will be some input related to food quality and atmosphere in the decision making but the most important factor will be the SERVICE.
"Brave New Order" redirects the blame to the owners of restaurants for allowing the poor servers to continue to remain employed. Alas, most of the blame should be directed to poor management for retaining these servers but there is much more complex theory I would like to address and have the experts examine - Family Life in America - facing a new direction in the year 2000. Just who do you think is "training" the new generation for the workforce before they even answer the request to "bring a folder or a sheet of meaningless paper over to the bar?" It's the Family and believe me - it does not look good. Respect, one of the biggest character developments in human nature is in a very serious state with the children of today. I have a "feeling" that new parents today are satisfying too many unnecessary wants and desires of their offspring because of their own "guilty" feelings of not being there in the home (work, play, divorce - living elsewhere etc.) Let's just look into the family and the "training from birth" of the next generation of servers. I would love to have a better pool of applicants to provide the quality service I know people have come to expect. Until then I must work to "change behavior" on O.K. servers who really do need the tip income to survive.
Congratulations on putting together a useful and interesting site. Absolutely the best in the industry...
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I have a few questions of the hospitality industry. What do you like (and dislike) about the products offered you by your meat and poultry suppliers? Are they offering you what you need? Is the service and innovation there? What do you need that you're not getting? Quick, snappy answers as well as long philosophical tomes are needed. Answers may be published. Let me know if you want to be anonymous.
Chuck Jolley, Publisher
Four star, prestigious Relais and Chateaux resort in the Colorado Rockies has immediate opening for one experienced Sous Chef and on Head Pastry Chef for our summer season (now - October 6, 1998). Our kitchen, staffed by 6 chefs, is famous for itís International cuisine and has been featured in Bon Apetit, Gourmet, Town and Country, and Travel and Leisure.
Applicants must be very talented, creative, and posses excellent people skills. Salary, room and board included. Possible year round position for the right person after a one season trial.
For more information, email Claudia at email@example.com or call 970-879-1780
I am a classically trained Chef interested in locating a company that would offer me the opportunity to visit their restaurants as a secret shopper. I am not sure this is the correct title, but I understand restaurant chains employ people that visit their sites and report on quality of food, service, etc. I have averaged eating out eight times a week for the past 10 years. The range type has been from fast food to the top rated in the country. Can you help me to locate the chains they may use someone in this capacity. Your help will be appreciated.
Please send e mail to AAndr67896@aol.com
Has anyone ever mentioned the fact that the North American Caviar (paddlefish) taken from the big rivers may be and in most cases have been documented to contain levels of PCB's and Chlordane dangerous to humans? Is this information being put on the shipping label? The public should be made aware of this.
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