Purchasing is one of the most important part in
the restaurant operations. It directly related to the operating cost and
customer expectation of the restaurant. If the restaurant staff fails purchase
the right quantity for different ingredients, the restaurant will face a
shortage of ingredients and wastage of excess ingredients. With insufficient ingredient, the restaurant will
not be able to provide dishes stated on menu which disappoints their customers.
For purchasing excess ingredients which are perishable, it leads to food
wastage and increase in operating cost which lowers the restaurant’s profit.
Just like what
have mentioned in class, several staff should be assigned with different roles
in purchasing and standard should be set to make procurement process an
efficient one. However, what are the concrete steps for starting the purchasing
procedure? Here are they:
Step 1: Determine a
purchasing person or department
The purchasing person or department is
responsible for requesting quotation, making order, receiving, storing and
issuing. There may be several people for buying all ingredients needed for a
restaurant, but there should only be one person, the buyer who is responsible for
doing the actual purchasing for ingredients. The buyer should have balanced
communication skills (find out the need of different stakeholders in restaurant),
good with math skills, computers skill (use software like SAP for recording
every details in purchasing process) and product knowledge (choose the best
ingredients and equipment for restaurant). Larger restaurant or organization
will usually include a purchasing agent or team for handling the procurement
issue while manager or chef will take this responsibility in a small restaurant.
Step 2: Determine the
product specifications
For the buyer to check whether the things
they purchased match with what is needed by the restaurant, the product specification
should be determined. As what have been mentioned in the lecture, product specification
is about establishing standard for each product and also the method for payment
and delivery which is very important for both the food supplier and the buyer
to communicate the buyers’ purchase requirement. The buyers should consider different
food characteristics such as grade, size, colour, origin, preservation method,
intended use, etc. when they purchase various ingredients in order to produce
up-to-standard dishes on menus. There is one specification called acceptable
substitutions, which allows to vendor to provide alternative ingredients if the
supplier do not have enough in stock. This allows the restaurant to have less
risk even if the required food is not able to be provided. For clearly stating
how to deliver food and how payment is done, the restaurant can better manage
their supply chain and work with the food suppliers. Therefore, product
specifications acts as a control in the purchasing and delivery process to make
sure the ingredients with required and consistent quality are delivered in the
right time.
Step 3: Estimate the
quantity and frequency for each replenishment
To
understand which food suppliers provided with the best price, a restaurant usually
send out request for proposal for suppliers to do bidding. It is just the same
as the bidding what we have done in normal, the one provided the items with the
best price will be chosen as supplier of the restaurant. However, the role of
restaurant and suppliers may switch in a bidding process if the food supplier
is hold some ingredients which is very special or rare (like the king tuna fish
sold in Japan as what have mentioned in class).
With the
selected food supplier, the restaurant has to estimate the quantity and frequency
for each replenishment by considering the demand, different ingredients perishability,
the storage cost. With more shipments, the food freshness could be guaranteed and
the cost for storing ingredients will be lowered. However, the transportation
cost also increase. With less shipment, the situation will be vice versa. For
ingredients which are non-perishable like sauces, oil, seasoning, etc., the
purchase will be less frequent then fresh ingredients which are usually
consumed each day.
The restaurant always keep safety stock as
replenishment needs time. Restaurant usually calculate the order amount by
adding 5% to the additional required amount for a certain ingredient. Par stock
level method is usually adopted to determine the replenishment quantity for the
nonperishables. It is an effective method
for restaurant which has a cyclical menu to manage their purchasing. Par level
means the stock level must be on hand at all times before the next order is delivered.
As inventory are store outside the kitchen working area in the restaurant, there
is an internal process call requisition for issuing ingredients to restaurant from
store room. A par sheet is considered by storeroom manager to determine the
amount of purchase for each item according to current stock level (original
inventory-requisitioned amount) and par level. The staff may subtract the
inventory in hand from the par level to check how much they should order. This is called perpetual inventory generally.
The
above is an example of par sheet. The column ‘Do’ is the amount for
replenishment. Take portioned fries as an example, there are 9 units of them in
the inventory but the par level for that item is 25 unites. Therefore, 18 more
units should be purchased in order to fulfill the operating need of the
restaurant. However, as par level is only an estimation, the store manager usually
adjust the purchase amount calculated from par sheet by considering the actual
demand for particular items.
If the
ingredients are too much that it may be complicated and easy to make mistake if
it is manually managed. Therefore, large restaurant usually make use of
software like point-of-sales (POS) system to assist purchasing staff or department
to check the amount of item used and stock level in the storeroom. The software
may even automatically generate a purchase order for replenishment if they find
out the inventory amount is lower than the safety stock level set in the
software. Nevertheless, if alternatives replace part of the ingredient in the
original dishes, or some ingredient is added and removed from the original recipe
due to customization, the staff has to state the special changes in the POS
system. If not, there will be a wrong calculation for inventory level of
different items. Below is a sample interface for the POS system.
Step 4: Select the suitable method for purchasing based on needs
Three needs of the restaurant has to be
clarified, which are level of service needs, quality specifications needs and
prime vendor relationship needs, before method for purchasing is determined. There
are several types of common methods used by different restaurants in practicing
their purchasing.
1.
Competitive
quotes: the restaurant pick the food supplier who provide them with
qualified input with lowest price under detailed specifications. It is usually
adopted by small and independent restaurants.
2.
Standard
order: there is regular replenishment for different item according to the
use of par sheet. Restaurant use this method for bakery, coffee and diary
product.
3.
Prime
vendor: this method refers to use a single food supplier to support
majority of the restaurant input, which is mostly adopted by restaurants.
4.
Cost-plus:
the restaurant source particular type of ingredients from a specific food
supplier. Chain operations often use this practice.
5.
Sealed
bids: The restaurant sign contract with a food supplier that the supplier
has to provide ingredients at its price stated in contract even if the market
price of ingredients fluctuate.
6.
Commissary:
Consolidated quantity is purchased from a chosen food supplier. Chained and franchised restaurant always use this method.
Step 5: Find and
select a vendor
Finally, we come to the step of finding and
selecting a vendor. The restaurant should list the potential vendor which can provide
the required ingredients with different specified product characteristic and meet
organization needs. Restaurant can evaluate different aspects (like Consistency
in quality, delivery time, and labeling) of the food suppliers and rank them
according to the priority that the restaurant would purchase ingredients from. One
very special and important consideration is that managers should consider using
Hazard Analysis Critical Control Point (HACCP) which is a system used to
control risks and hazards when choosing food supplier. Only HACCP-approved food
suppliers can share liability when the customers are sick or poisoned after
consuming dishes produce from the ingredients supplied. After choosing the
vendor, it is also very important to maintain good relationship with the selected
supplier as well as monitoring the quality of ingredients supplied consistently.
If the restaurant is able to choose a good partners in supplying food, the costs
would probably be reduced, quality would be maintained customer expectation
would be met.
Evaluation:
The key point of purchasing is covered in the lecture and here is just some more explanation and examples on what are the preparation and starting steps for doing the purchasing. After doing the research, I found that details that have to be determined and considered for purchasing is far more than I have expected. Through doing this research, I have more in-depth understanding on the purchasing of the restaurant operations.
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