Do you think about the MONEY first as Key To Better Buying?
Every food service buyer has their own “formula” for achieving the optimum from suppliers and improving end-to-end total product costs.
However, few emerging chain organizations are able to perform a proficient analysis to benchmark costs or project long term pricing success.
For the most part, the alignment of distributor/supplier/buyer distorts true product cost and plagues chains that work hard to leverage purchasing power. When a product selection is made from the distributor’s stock inventory and the prices are controlled by the distributor, the failure of the chain to obtain the lowest available price is usually attributable to not being involved in the negotiation process.
How can chains expect to compete with industry leaders without an understanding of the basic “farm to plate” cost of ownership process. What’s trending today is the use of third party group services offering volume discounts and rebate recovery.
However, these services were not intended to replace centralized procurement. Too many organizations sign-up because they want "free money" or to relieve the over-worked (multi-tasking) executive handling the purchasing responsibilities part-time. These services can actual add to the acquisition cost of goods because they prevent the chain from developing direct supply relationships.
Does it make sense to trade $100,000. In salary and benefits, plus 30 food basis points, when a professional outsourcing firm like SPS or experienced purchasing staff can generate, on average, 7% savings contribution year after year?
Additionally, the structure of the relationship between the rebate service and end-user chain does not foster the highly flexible buying processes with fast reactions to commodity market changes and seasonal buying opportunities..the proven hallmark of world-class procurement.
Additionally, the structure of the relationship between the rebate service and end-user chain does not foster the highly flexible buying processes with fast reactions to commodity market changes and seasonal buying opportunities..the proven hallmark of world-class procurement.
It is not the mission of BuyersEdge, Entegra, Foodbuy, and VGM Client Rewards to develop your current or future supply partnerships, plan sourcing initiatives or manage high-volume commodity contracts.
It is, however, the responsibility of your purchasing executive and specialized firms like Strategic Purchasing (SPS) to develop current and future suppliers and position them to provide the highest performance at the optimum cost levels for your business.
You can start by thinking about the money last not first. Start by following proven industry best-practices in building and managing your purchasing supply-chain.
To Higher Profits!
You can start by thinking about the money last not first. Start by following proven industry best-practices in building and managing your purchasing supply-chain.
To Higher Profits!
Fred
Fred Favole is President of America’s most experienced purchasing firm for operators who have no internal procurement department and chains wishing to outsource the function for greater savings and overhead reduction. Contact Information:
Email: Fred@StrategicPurchasingServices.com Office: (912) 634-0030
Email: Fred@StrategicPurchasingServices.com Office: (912) 634-0030
