Thursday, December 13, 2012

Things To Come - Foodservice Purchasing 2013

In the event that the world does not end with the Mayan calendar this month, here is a quick guide to preparing your organization for the coming higher commodity prices, product allocations and forced foodservice job reductions.  

Try to tackle the spend management challenge you need all the puzzle pieces, even if the boss is saying, “we’re already behind on this year’s goals and our infrastructure needs work before we can go ahead with any changes.”

Many times team members also will want to keep doing it the way “we’ve always done it", thinking that no change provides job security!

Is your foodservice structure ready to support new products and  changes in purchasing strategies? Creating the proper attitude concerning these 4 management areas will improve your bottom-line. 
  1. Increase Supplier Performance – make sure your suppliers are meeting your objectives, don’t merely maintain the relationship – build it.
  2. Reduce The Buying Cycle -- most suppliers no longer offer long-term pricing unless you take the risk, so streamline your bid process and focus on quarterly bids that generate even modest savings or cost-avoidance.
  3. Cut Purchasing Costs and Overhead – lower operating costs by outsourcing where you don’t have on-staff staff expertise. If company buying responsibility rests with the multi-tasking executive in the corner office who does many things “adequately”, ask your distributor if your prices are comparable with your competitors’.
  4. Reduce Maverick Purchasing and Increase Control – increases spend management and control purchases - you will need to maximize every purchase dollar. 
While your company may not be ready to more forward with the “risk-reward” buying strategy of buying commodity futures, you can take the first steps to protect prices. Try developing a short-term action plan; we help our foodservice chain clients address the more immediate savings opportunities while outlining the steps to meet long-term goals. 

Determining the right solution for your company requires doing what works for the most profitable brands in foodservice: commodity market price management. Using the markets will catapult your purchasing forward quickly and it’s the only solution that I know of that can satisfy your present and future food cost needs.
With both soybeans and corn at near record low stocks watch the cost-index soar and push protein prices higher even as supply is consolidating.   

While most foodies think 2012 pricing was one for the record books, purchasing pro's know that in the coming year we will see more volatility and wide price swings. 

It you don’t have the buying expertise required to manage the markets, get help. It’s Your Money! 

To Higher Profits!
Fred

Fred Favole is Founder & President of Strategic Purchasing Services (SPS), America's most experienced and trusted purchasing firm specializing the product contracting and post-purchase income recovery. Contact: (912) 634-0030 Email: Fred@StrategicPurchasingServices.com Connect on LinkedIN.