How Foodservice Buyers Reduce "KOPI LUWAK" Costs

In your foodservice business, it is unlikely that you want to enter into spending wars for the worlds most expensive bean to support your civet coffee habit. On the other hand, you want to take advantage of the best prices offered in the supply community by working to create competitive bids and cost savings opportunities. Part of the solution is to reduce  or contain distributor landed costs and preparing for product bids. Start by establishing target  prices for purchases based on commodity market knowledge, purchase history and seasonal markets.  Understand how product specifications impact your final  cost. It can be a challenge for GPO members and emerging chains to identify low-cost suppliers and to determine what price they should be paying for high-volume purchases. Leave your comfort zone and stop making these 4 fatal mistakes:   1.Taking bids from the same distributors or suppliers, "over and over again" 2. Allowing  distributors or brokers to be your sole source for finding products and quoting prices.         (tip: work directly with suppliers on key item purchases)  3. Accepting  rebates instead of negotiating deviated pricing agreements. 4. Failing to understand commodity markets and seasonal price changes. The process of reclaiming spend control for your foodservice business requires the appropriate purchasing skills starting  with an analysis of your descending dollar purchases  and basic spend metrics profile.  Take action to protect your bottom-line by retaining a capable purchasing firm to implement a Supplier Performance Management & Contracting Program or hire an experienced procurement supply-chain manager to accomplish the job. The ROI for your investment to upgrade procurement will be repaid 10 times --- try getting that type of cash return on Wall Street ! Yes you can successfully implement a self-directed purchasing and cost-reduction program and improve your company’s buying process. Challenge yourself by establishing a goal of improving the cost of 20% of the items, representing 80% of spend by 3% over the next 90 days. And, take time each week to develop supply relationships that support your long-term profitable growth. To Higher Profits !  Fred services company specializing in purchasing department outsourcing, bid & commodity price management and distribution program warehouse audits. His contact information: Office 912.634.0030, E-Mail: Favole@Gate.Net     Follow Fred’s Blog at https//purchasinginsights.blogspot.com Fred Favole is Founder & President of Strategic Purchasing Services (SPS) a leading