Foodservice purchasing experts focus on creating a competitive advantage by sourcing products “outside
of the box” typically created by standard supply-chain models. Ask any executive in major chain procurement what
separates their performance from emerging chains, buying groups or distributor buyers and the answer may
surprise you.
Their reply is likely to
place saving money lower on the list. After
all distributors, suppliers and brokers always offer the best overall product solutions for the business, right? On the other hand, we must consider that distributor account representative must maintain company earned income, brokers earn commissions selling products in the distributor' warehouse, staff buyers have limited sourcing and culinary experience,
and GPO's (group purchasing organizations) partner with lead suppliers to earn money and offer members a limited number of brand alternatives.
For foodservice sourcing
to be truly strategic, it must go outside of the supply-box created by these restrictions. A world-class process brings value to the organization in many ways including saving money; the foremost of which is establishing a direct
relationship with suppliers that are committed and capable of
contributing to profitable growth.
Here are 5 strategic sourcing goals used by SPS in managing chain
purchasing and providing chef services:
Goal #1: To reduce risk. The brave new foodservice world requires that buyers understand how to compete in the international marketplace for proteins and grains once available and affordable in the U.S.A.
Goal #1: To reduce risk. The brave new foodservice world requires that buyers understand how to compete in the international marketplace for proteins and grains once available and affordable in the U.S.A.
Building your menu based on being able to consistently buy certain imported seafood species and beef sub-primal cuts or chicken wings at affordable prices can be risky business. Strategic sourcing enables your company to
sustain a continuity of supply, quality and price, even in the face of the unexpected markets and supply disruptions.
Goal #2: To improve supplier performance. Reducing the delivered to distributor unit price on your order guide is nice, but meaningless if you don’t hold suppliers to formal product, specifications, and distributors to on-time and complete deliveries. Not to mention quality defects or changes in product yield that affect your business.. Strategic sourcing is only truly successful when you can achieve a true cost reduction and improve distributor and supplier performance.
Goal #2: To improve supplier performance. Reducing the delivered to distributor unit price on your order guide is nice, but meaningless if you don’t hold suppliers to formal product, specifications, and distributors to on-time and complete deliveries. Not to mention quality defects or changes in product yield that affect your business.. Strategic sourcing is only truly successful when you can achieve a true cost reduction and improve distributor and supplier performance.
Goal #3: To drive
profits to the bottom-line. Managing
cost by controlling the landed cost of goods to your distributor the first step
in the process. Transition from distributor or GPO controlled
center-of-the-plate purchases and you can avoid the projected 3.5% food price
increases through the end of the year.
Then, hire a professional to contract directly with strategically selected
suppliers; then maintain high-performance standards by levering total purchases
and managing future commodity costs.
Goal #4: To bring in innovations from the food supplier base. In today's competitive restaurant and hotel business you need a constant flow of new sources of supply and options to release the full capabilities of your culinary and purchasing team. Suppliers can be a great resource only if you are selecting qualified partners world-wide from “outside” the box build by many links in your supply-chain. Start to recover your potential through sourcing and watch your Culinary-Purchasing team ROCK.
Goal #5: To support the organization's social responsibility goals. Today’s operators must support green, healthy, diversity and other social responsibilities; these principles can be incorporated in your strategic sourcing plan and services like SPS can help move your organization towards those goals.
Discover the principles of the strategic purchasing process and start seeing immediate benefits. Empower your organization to exceed expectations by out-SOURCING and out-SELLING the competition.
To Higher Profits! Fred
Fred Favole is President of Strategic Purchasing Services (SPS) and Founder, Chef Support Services, a foodservice consulting firm specializing in outsourcing, culinary support, and spend management services. Fred at (912) 634-0030, email: Fred@Strategic Purchasing Services.com
