It’s possible to develop and implement a spend management solution for an emerging chain in less than 18 months, with contributions to the bottom-line of 5% or more. If the organization operates in multiple markets and has never developed a high-performance procurement process, the savings will be even greater.
Focus on defining the areas you want to hand to a qualified consultant and really don’t do well in-house. Here are the top 5 functions that should be assigned to procurement that are typically assigned to (busy) multi-tasking executives:
- Vendor Qualification & Strategic Sourcing (Chef/Culinary/Owner)
- Distribution Warehouse Audits / Price-Compliance (VP Finance)
- Freight / Logistics (COO or not assigned)
- Bid Management / Commodity Contracting (Owner/ VP Ops / Chef)
- Increase “spend-under-management” (COO or not assigned)
During the initial clean-up process, the outsourcing firm will uncover hidden savings and look at tactics to create power-buying opportunities for your organization where there is none at the moment.
Effective and successful procurement needs to be positioned at the heart of your foodservice business, as part of your senior executive team or with their full support - otherwise you run the risk of developing a purchasing mess with prices controlled by the local market and initiatives based only on broker, distributor and supplier relationships.
As top-line growth is hard to come by in the current economic climate, the opportunity to hold the line or reduce food acquisition cost through outsourcing is simply too good to ignore.
To Higher Profits!
Fred Favole is President of Strategic Purchasing Services (SPS), an industry leading consulting firm specializing in purchasing outsourcing, interim management and cost-reduction services. His contact information;e-mail: SPS@Gate.net Office:912.634.0030. Fred's Blog: https//purchasinginsights.blogspot.com