Foodservice Chains Build On Performance Conclusions

Your cost improvement strategy is on solid ground if based upon restaurant profits and brand positioning relative to the competition. 

The purchasing supply-chain contribution to your business should be driven by activities that contribute to the cost positioning of your chain. 

Ideally, the involvement of purchasing and R&D, working with marketing and operations in part of your performance management process.  This interactive dynamic sets the stage for overall spend and menu success. 

If you don't have the resources on staff, consider outsourcing as a tremendous and affordable solution to drive your business to the next level of efficiency. 

The really great restaurant chains excel at the Value Improvement Process and you can too!  

Start with these 4 basic steps:                                             

1. Identifying key areas of investigation    
2. Set appropriate cost targets                                    
3. analyze options in each area                                                 
4. secure resources to complete the work

The process we use with emerging chains or franchising organizations is to form small groups knowledgeable about specific areas of the business. Then, during monthly meetings or via online webinars, ideas are discussed and the best are presented to senior management.

If you would like to discuss the challenges facing your foodservice business or would like to learn about our Free spend analysis, give us a call today....It's Your Money!

To Higher Profits!  Fred                                                                                                                                                                                                                                                                 

Fred M. Favole, is Founder  & CEO of Strategic Purchasing Services (SPS) the industries most experienced consulting firm specializing in "outsourced" purchasing management. Office: (912) 634-0030, ffavole@hotmail.com   

Things To Come - Foodservice 2015

Supply Chain Matters

Welcome to 2015, the year that moderate energy prices increased consumer spending; even as the millennial generations' craving for junk food gives way to better food choices.  Keep in mind, they just learned via Twitter that testosterone replacement therapy has been perfected and life expectancy is now 87.45 years!  

Depending on your industry segment, your competitor’s changes in menu or service style to gain the profit or competitive advantage can be subtle; like fast food restaurants hiding the condiments, your favorite pub downsizing the personal size pizza or that national bar and grill chain adding a take-out charge to your take-out order. Expect more of the same in the New Year.

As industry consultants we are lucky enough to work several "hot" emerging chains with unique menus and trend setting concepts.  We work with them to source new items, develop contracts and manage the supply-chain process. Future restaurant chain leaders will find 3 basic ways to reach the teen to twenty something age group; social media, healthy offering and olfactory sensations.  This kicker this year these basics have found there was into the QSR and Fast Casual segments.

Gone are the days where double size-it promotions, $2.00 off coupons, and 36 oz sugar cola's can draw new customers, especially for the "Homeland" generation.

Segment Movers for 2015

·                     Fast Casual concepts with continue to fight each other for market share. And, innovators like Anthony Pigliacampo at Modmarket Farm Fresh Eateries (Denver) and Ron Siegel of Chickpea International (NYC) will continue to focus on fresh, healthy and tasty fare, while offering real dining value. 

·                     Casual Dining giants that serve up more of the same seafood and Italian dishes year after year will continue to struggle, closing stores faster than they can remodel. Real growth in this segment does not come easily, primarily because the competition is keen and emerging chains can move faster and offer more exciting menu dishes. 

·                     QSR restaurants may outpace all segments in increased profits, partly because they are starting to think "green and healthy" and mostly because the Affordable Healthcare Act in 2015 will force them to reduce non-management staff working sub-30 hour weeks.  This unfortunate (ha ha) situation does offer many operators an opportunity to pocket this political cash gift since they don't have to pay insurance. 

Distributors Are No Longer Price Friendly 

Not even the Wall Street Journal knows why Sysco’s purchase of U.S. Foods has been delayed. Let’s accept the fact that it's hard to turn the Queen Mary even in calm waters, as Super-Cube downsizes sales and support staff.  

What operators really need to watch out for is Machiavellian category management programs from some distributors that restrict open market purchases and distort the true cost of goods.  If you are not controlling 80% of what you spend through direct manufacturer contracting, you need to retain a professional purchasing support service. If you have a home-grown management mentality, then at least consider using an outside audit service to manage price-compliance within your supply chain.      

Your Foodservice Career

2015 will be the best year since 2005 for you to break into management, get promoted, change companies or retire from you day job and open your own foodservice business.

This year the “hot chain” concepts will add culinary to develop or refine new taste experiences and there is always a need for experienced restaurant operations managers willing to work long-hours and relocate to new growth markets. 

If you have the what it takes, make your move between March and May, the best months in the year to land that new career opportunity!

Why not make your New Year's resolution to stay current with your industry by attending a trade show,  taking a professional improvement course, work smarter-not harder, then “pay it forward" by sharing your knowledge, experience and passion for this great industry with the next generation of foodservice professionals.

To Your Success in the New Year!

Fred

Fred Favole, is Founder & President of Strategic Purchasing Services (SPS), America’s most experienced consulting firm specializing in foodservice purchasing management. Ask Fred about a solution for your business; P: 912-634-0030, e-mail: ffavole@hotmail.com

  

Who's Really Managing Your Foodservice Purchasing?

Of all the non-operational activities that produce success in foodservice,  purchasing provides management with the greatest challenge.

The old school buying philosophy was to select the lowest bidder and make sure the restaurants received the right product on time. Because the buying function was undervalued, there was no chair for the purchasing guy at the board-room table. More often than not, buyers were isolated and had little interaction with the chain's culinary, operations and marketing departments. 

Then, progressive companies like; Marriott, T.G.I. Friday's and Howard Johnson's, driven by the force of strong purchasing executive personalities helped to change the balance of pricing power between the chain customer, program distributor and manufacturer. 

Today, for the most part, this approach has given way to “team” decisions regarding vendor selections and forward buying strategies, in what I call the era of soft purchasing.  Who really manages your foodservice purchasing depends on your supply-system and ability to identify true cost.  In recent years the balance of buying power has shifted back to the distributor, aided by willing manufacturers.  The exceptions are emerging chains like Modmarket Fresh Eateries (CO) PDQ (FL) and Chickpea International (NY), who focus on executing unique menus, while fighting to maximize of every dollar of spend.

Next Level Buying  - Vendor Selection

Often overlooked in the overall buying process is the importance of vendor selection. The selection of new suppliers is often restricted in "One-Stop" delivery programs. Strategic Purchasing (SPS) specializes in supporting emerging chains by building cost-effective purchasing supply-chain systems. Our innovative category buying and specialized re-distribution system is changing the vendor selection process.  

Food Cost Thieves
The challenges of developing and maintaining an efficient supply-chain are many, especially when true costs are not transparent to the operator and hidden profit centers (distributor) prevail. The avenue of dishonesty (transparency is a more politically correct term) in foodservice distribution and manufacturer programs is a winding road paved with temptation.  

There is no excuse for distributor or suppliers to raise prices counter to changes in commodity markets or overhead costs but that happens every day.  This practice, along with participation in earned-income programs often add 7-9% to the operators' true delivered costs.   The operators response is to private label products and forward contract prices.

Our great industry is faced with an ethical challenge of continuing under the economically false assumption that a $1.65 distributor fee or 6.5 % blended delivery margin can actually generate the $185. gross profit per delivery most distributor require to be profitable. 

Are restaurant operators willing to continue buying national brands that offer deep discounts and long-term pricing to the major chains or buying third party buying groups, while loyal but smaller chain customers pay more for the same products? There are numerous, more subtle forms of food cost theft, but you get the picture. 

Show Me the Money!

Every proactive procurement program starts a buying strategy, a long-range plan, and a systematic approach that advances menu profit objectives. If your process has a disconnect anywhere in the supply-chain, you are losing money. 

For now, think again about who is really managing your purchasing process. Is delegating spend management to a non-professional within your organization the best way to assure high-performance and profitable growth? 

To Higher Profits! 
Fred

Fred Favole is Founder / CEO of Strategic Purchasing Services (SPS), America's most experienced foodservice consulting firm specializing department outsourcing and COP cost reduction. Ask us about a free consultation or spend assessment today! Contact (912) 634-0030, e-mail: ffavole@hotmail.com 

Proactive Procurement in the New Supply-Chain

Today’s discussion tackles the question of whether a food service organization can change the new supply-chain enough to reduce food costs and thereby increase profits.

The answer depends on whether or not you can distinguish between a “distributor managed pricing program” from a true-cost of goods model which correlates production costs, commodity markets with finished goods pricing.

Most emerging restaurant chains pay less attention to true costs than they do pressing the distributor for lower delivery margins and suppliers for rebates.  From my 20 years consulting with more than 60 restaurant and hotel chains, I guarantee that any direct cost associated retaining a purchasing professional is an extremely sound investment.

What’s wrong with the new food service supply chain?

Traditionally, chains worked hard to move away from distributor managed purchases; managed product sourcing and structured pricing agreements with limited outside influences, and developed manufacturer sales advocates. 

Pre-2000, the transport of contracted products was handled by the supplier directly with the foodservice chain or co-managed with freight carriers.  While there was never was "true" pricing transparency; in past years supply partners discussed freight, production costs, overhead, sales overages, and distributor discussed financials.  

Today's new food service supply model or should I say, the“multi-income stream approach” that is taken by many distributors. This splits costing areas into watertight distributor profit centers.  All this is happening even as chains rush to reduce their purchasing staff  or delegate responsibility to non-procurement managers. You can bet the tremendous growth of group purchasing organizations (GPO's) can be traced to staff reduction.  However, this comes at considerable bottom line cost to the food service operator.   

Where the essence of procurement supply chain management has been transparency, and management of the cost components to the purchase there are two drivers changing this model, the are;  manufacturer segment specialization (ie: designated as a local chain, regional, national or broker /distributor managed program) and distributor category management. 

Both systems limit the chains ability to source the best product available at the best price. Making the task harder is direct collaboration between the manufacturer and distributor operating the single source system. 

Consider the 100-unit chain buying 15,000 lbs. per month of a standard breaded chicken tender under the distributors private label, for $2.55 per pound.  The chain opens a restaurant 500 miles away and discovers the same product under the manufacturer label sells for $2.40 per pound.  At the NRA show the buyer meets with the supplier directly and they reach an agreement for a private label program for only $2.25 per pound!  

Lets look at this example from the product sourcing perspective.  The distributor’s single-source buying system offers chicken tender for $2.55 lb. and they do not inventory a competitive product. The chain buyer asks the supplier for a special price based a volume purchase commitment, and the supplier refuses, stating "this is not allowable under the agreement we have with your distributor".

Every seasoned buyers reading this blog is shouting "foul" and will be quick to point our there are laws against price-fixing, The “Robinson-Patman Act”  or Interstate Commerce regulations; ...inside the ropes, however, they lament about how earned income,  single sourcing, and greed have distorted  the "true" cost of goods in the new age supply-chain.  

Is our buyer daunted by these obstacles?  Never!

Not wanting the chains' purchasing power to go down the drain and wishing to use his strategic buying plan for 2015, a lower cost supplier is sourced from outside the controlled supply system.  The new price is only $2.30 per pound and the supplier offers firm pricing.  Now the bad news!  The potential program is derailed because the new supplier does not have a financial relationship with the distributor resulting in higher inbound freight

Purchasing managers must develop missionary zeal in making the right distributor and vendor selections, and implement proactive procurement programs that allow the chain to take back the management of their supply-chain. It's the key to improved purchasing, higher profits, future cost-controls, and culinary independence.

To Higher Profits,   Fred                                                                                                   

Fred Favole is Founder/CEO of Strategic Purchasing Services (SPS), America's most experience foodservice consulting firm specializing in staff outsourcing and cost reduction management. Contact SPS for a free spend assessment or purchasing consultation: Office: (912) 634-0030, Email: ffavole@hotmail.com

Lessons from The Olympics

Is your foodservice organization ready to annihilate the competition leading to the total destruction of their most profitable menu offerings?  

Creating the proper “supersport” attitude with advanced culinary-purchasing-operations teamwork the rocket science blackboard schematics of the New England Patriots.  

However, it does require the shot-out guts of USA Hockey star TJ Oshie and attention to 4 management areas that impact cost. 

Foreplay To Success    

Increase Supplier Performance – make sure your suppliers are meeting your objectives, don’t merely maintain the relationship – build it.

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.

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’.

Reduce Maverick Purchasing and Increase Control – increases spend management and control purchases - you will need to maximize every purchase dollar. 

Whose chain menu will reign supreme?

From the Sochi Olympic Stadium to Kitchen Stadium - Iron Chef, the lesson is the same...challenge your Gastronutritional and creative Team to gain the People's ovation and make your culinary-purchasing ROCK.  

Here are artistic creations spotted on slopes on the way to Russia!                                      

PRETZEL EVERYTHING	Breads, twists, wraps, nuggets
MIS-MASH	Haute Jewish Deli (amped up chicken liver, peppered pastrami; other - Beef potato chips, marshmallows & macadamia nuts, Asian-American comfort food (hand held)
The NEW COBB SALAD	Trendy ingredients (jerk, ABF chicken, Italian ham, fried avocados
More BROCCOLI	Frittata, broccoli slaw, roasted, as pizza topping, and Pizza oven-roasted cauliflower with whipped goat feta
Wraps With an Attitude   TO-GO "car cups"	Street food in a great wrap, taking it to the Food Court competition Actually fits both Yugo & Mercedes cup holders, how about that:  holds finger foods from fried fish to whiskey butterscotch parfaits.

To Higher Profits!

Fred

Fred Favole is the Founder/President of Strategic Purchasing Services (SPS) and Chain-Link Culinary Services (CLCS); America’s most experienced consulting service for foodservice chains.  Contact information:  P: 912-634-0030 e-mail:fred@strategicpurchasingservices.com

Things To Come: Food Service 2014

2014 the year that consumers will be spending more, which translates to more posteriors in more restaurant seats. Are you fully prepared to handle this new business. 

Depending on your industry segment and region of the country; changes in products or service style can be subtle or you you may need a major renovation.  Here are a few insights to consider.  

As industry consultants we're lucky enough to work with exciting chains all over the country.  We've seen some trends popping up on menus that is sure to move mainstream in 2014.  You need to reach new customer through their senses, both intellectual (ie: healthy eating or great value) and olfactory.

Fast Casual concepts with continue to fight each other for market share as innovators like Modmarket Farm Fresh Eateries, Great Wraps and Garbanzo Mediterranean Grill  focus on fresh & healthy, while delivering taste sensations that consumer’s translate into dining value. 

Multi-concept casual dining giants serving up more of the same seafood and Italian dishes will continue to struggle with declining sales, but they can look forward to improvements in 2014.  However, real growth in this segment does not come easily because the faster moving and clearer thinking emerging chain innovators keep introducing spot-on trendy products. 

Savvy executives have discovered that re-imagining the menu is far cheaper and faster than “re-branding.”   They are looking to add new seasonings, sides, toppings, and specialty breads...the nitro that has fueled the segment since early 2011.  Ask whether or not you have been providing what your customer needs – or want he wants?  

The “hot chain” concepts that we support have added culinary support to develop or refine new taste experiences. Take time to tell customers why they are using quality products ABF poultry, ZTF oils, red tomato, chia and Quinoa seeds, and roasted veggie toppings. As Chef Paul Ladouceur, SPS-Culinary Services says, “try to add texture to products and discover how intelligent ingredients are not only trendy, nourishing and taste good, but they can produce a healthy bottom-line.”.” 

QSR (fast food) restaurants will outpace all segments in increased profits, partly because the Affordable Heath Care Act forces foodservice organizations to move hourly-workers to 30 hours per week (leaving them to toil without a health safety net).  This unfortunate situation does offer operators an opportunity to invest this political cash gift (they don't have to pay insurance) in equipment upgrades and profit producing promotions.

Thoughts on Distribution 

Not even the Wall Street Journal knows how Sysco’s purchase (merger) of U.S. Foods will impact the marketplace. Lets just accept the fact that it's hard to turn the Queen Mary even in calm waters, but they will find a safe harbor, even as they improve their Machiavellian category management program.

Look for the continued growth of regional distributors and groups like, DMA and Uni-Pro (Mug-Group) that are sure to capture market share during the next 18 months. You can also bet that the super-cube will emerge leaner and more profitable. To the average chain operator differences between distribution services will become even more obvious later in the New Year. 

Food Trends – Eat This List

PRETZEL EVERYTHING	Breads, twists, wraps, nuggets
MIS-MASH	Haute Jewish Deli (amped up chicken liver, peppered pastrami; other - Beef potato chips, marshmallows & macadamia nuts, Asian-American comfort food (hand held)
The NEW COBB SALAD	Trendy ingredients (jerk, ABF chicken, Italian ham, fried avocados
More BROCCOLI	Frittata, broccoli slaw, roasted, as pizza topping, and Pizza oven-roasted cauliflower with whipped goat feta
TO-GO "car cups"	Actually fit cup holders & not just for drive-thru's to hold finger foods from fried fish to whiskey-butterscotch parfaits

Make a New Year's resolution to stay current with your industry, attend a trade show, improve your product knowledge and remember to share your experiences by mentoring the next generation of foodservice professionals.

To Your Success!

Fred

Fred Favole, is Founder & President of Strategic Purchasing Services (SPS), America’s most experienced firm specializing in chain purchasing & supply-chain management support. Ask Fred about a solution for your business; P: 912-634-0030 e-mail Fred@StrategicPurchasingServices.com

Riding Purchasing Off the Rails

You would be surprised (unless you get to see as many procurement departments as I do) just how many companies today are not able to identify savings opportunities

Many of these companies will tell you they know where the cost savings are and they have vendor “deals” in place, but they don’t really. They roll the dice on profits by allowing manufacturers and distributors to control the true cost of goods much like a reverse auction.

I recently started learning to play the drums, which means that I currently suck out loud in neighbor-terrorizing fashion. On the way to my lesson today, I psyched myself up by repeating the simple trick for learning anything: embrace failure.

We can't be good at something until we've first spent a lot of time being really bad at it.  Why should foodservice purchasing be different?

So in the spirit of embracing failure, I am sharing with you how 75 % of the chains we've consulted with over the past 18 years have mastered the process of giving money away to their so called “supply-partners”. 

For many emerging chains, advanced product contracting and spend management control is out of reach unless they turn to professional outsourcing services.  The legendary mistakes made by untrained staff can take years to repair.  

After a few minutes of fumbling, the new Director of Purchasing for a 100 unit chain, just promoted from training director, and with zero purchasing experience, calls his primary cheese supplier and asks if there is a contract in place and demands a price decrease.  Or the new manager rolls-over past contracts walking past immediate savings opportunities available through forward buying programs.

Chain executives that hire inexperienced staff should not be asking why they come up with dry holes again and again in drilling for cost savings. Why? Because they haven't done the due diligence needed to really understand that chains complete by having high performance procurement management. Many chain organizations do value supply executives. For example, McDonald's has always raised purchasing to a "C-Staff" level of importance, right up there with marketing and operations. 

I spent a few minutes here working on the premise that experience drives performance and that if you invest in hiring or retaining a professional to manage procurement you will be more profitable.

Sifting the rubble after the purchasing guy departs

It’s easier to blaze a new trail after you've already been hiking for a while and every time our firm takes over for those smart multi-tasking COO's or Chef's or the guy promoted from training, we are reminded just how much it really costs to be out-of-touch or “cheap”.  

At some point you're going to run out of time and money as the competition devours business in your home market or stops your expansion plans.  The reason is you don't control the supply-chain, manage markets or have the systems, controls and procedures in place to support profitable growth.

You will find that one of the neat things about taking back your purchasing process from distributors, buying groups, and brokers is how, maybe after three months, out of nowhere, bam!   An amazing string of savings opportunities will just burst onto your bottom-line.

Trying to explain to emerging chain organization executives why they should invest in professional management can be a lot like trying to put an octopus to bed.  I can always come back to it later, but for now, I am turning my attention on completing a spend analysis for restaurant chain that will lead to a $1 million savings next year.

To Higher Profits!                                                                                                           
Fred


Fred Favole is Founder & President of Strategic Purchasing Services (SPS), America’s most experience culinary-purchasing firm specializing in department outsourcing and cost-reduction management.  Contact email: fred@strategicpurchasingservices.com Office: 912-634-0030

Wing Crunch Time

Restaurant chains driven by wing sales should consider switching to a wing portioning program to bring menu profits more in line with acquisition cost. Supply of the highly desirable jumbo cut wing size is limited and pricing is under siege year-round - not just for the Holiday's and the Super-Bowl. The situation will not be getting better anytime soon. 

We are advising clients to adjust their portioning policy to make wing count size issues less critical. An obvious strategy is to adjust the count range requirement and move to a smaller or larger wing. Some of our favorite joints (they all have WINGS in their name) made this move in 2012).  We favor a variation of this approach;  instead of serving a set number of pieces, factor the size (wt) of the wings in each portion, more than the wing count. 

Consider what the a portioning program can bring to your business. Customers instead of ordering with the expectation of receiving a certain number of pieces, will have a choice of ordering by weight;  ¼ lb., ½ pound and 1 pound or family & friend platter servings. 

Despite the wing count, the customer gets the same volume of meat, and the new serving policy improves the chances of keeping supplied at somewhat discounted prices. Right now, because of low production and high product demand, it's " Wing Crunch Time - All The Time" for fresh small bird cut wings. 

You already know that no poultry company actually counts the wings they pack in a 40# case. The wing count is 100% determined by the size of the live bird and there aren't many 5-6# birds being grown. Just asking leading poultry companies like; Tyson, Wayne Farms, Pilgrims, Mountaire, Simmons, Perdue, Sanderson, OMP, Koch and Keystone about availability....by the time these nice folks get around to returning your telephone call, you can finish reading Wenzel's "Menu Maker".

To Higher Profits,

Fred

Fred Favole is President of Strategic Purchasing Services (SPS), America's most experienced foodservice purchasing services firm. Services: spend assessments, bid & GPO management & menu ideation & outsourcing. Contact Info:  (912) 634-0030 e-mail: Fred@StrategicPurchasingServices.com 

Hot Trend Wraps R&D, Menu, Purchasing and Profits

In the new food service workplace, multi-unit operators are creating lean organizational teams that can react quickly to competitive challenges through a dynamic management process called "culinary-purchasing (CP) ".

Many restaurants outsource technical expertise to develop products and join group group buying organizations to leverage lower product pricing. This new CP structure coordinates the efforts of highly experienced and motivated professionals resulting in new sources of supply, exciting products and higher profits, all delivered with cost effective results.

This Chain-Link-Services model introduced by Chef Paul Ladouceur and Fred Favole of Strategic Purchasing Services (SPS), combines the talents and expertise of procurement, culinary and supply-chain to deliver successful profitable outcomes. The unity of purpose is achieved by combining individual profession skills which provides food service organizations or manufacturers turning to SPS for client menu ideations with products perfectly matched to menu, kitchen equipment, price points and operational capabilities.

The CP process when incorporated into the national account chain selling program by manufacturing companies delivers the knockout punch that makes the customers culinary-purchasing process rock!

When you consider broad line distributors are withdrawing value added services and suppliers are reducing support staff, most companies have more Product Development, Recipe Development, Product Utilization and Menu Ideation projects than they are staffed to handle economically.  Now with chain-link services by SPS, all that changes!

SPS manage and implement the entire program for food service chain, or can assist with the individual steps in the process;  from the CP dynamic “ menu ideation ” and spend management (costing & logistics) analysis process through focus groups, staff training and introduction into the restaurant/hotel's distribution network.

Here’s a sad fact that based on our 18 years transforming decentralized purchasing programs;  less than 15% of all food service chains ever achieve the efficiencies of their competition.

How can things be improved to guarantee that products fit both form and function while still making a profit?   “ Culinary-Purchasing is the next logical extension and development trend that will integrated into the business outsourcing process, as older models continue to fail", states Chef Paul Ladouceur, V.P. of Culinary-Purchasing.

Lets take a look at 5 traditional ways most chains use to make bottom-line improvements. Then,  ask if culinary-purchasing management is what's missing in your process:

• Decreases in Food Cost
• Change in Sales Mix
• Increase in the Number of Covers (Customers)
• Increase in check average (often via price increase)
• Reduction in Overhead

Because of the resource-intensive nature of developing cross-functional teams, the hot new process is to use specialized services companies with motivated procurement and culinary professionals to assure profitable and successful outcomes. By bringing in your extended  “team” early on in the menu engineering or sales process, you save development time and the creative process is improved. 

Not only will this help functionality, but it will help lead to more profitable product introductions with fewer cost, operational and profit ” surprises” later on in the process. 

To Higher Profits!
Fred

Fred Favole is President of Strategic Purchasing Services (SPS), America’s most experienced outsourcing firm and innovator of the dynamic "chain-link services" program. Ask Fred about a solution for your business. Contact: Fred@StrategicPurchasingServices.com  Office: 912-634-0030 

Compete Using Strategic Sourcing To Achieve Goals

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. 

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 #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 

Strategic Sourcing Makes Menu Making Easier

How many times do you wish you had extra professional staff?

Chef Support is a unique program offered by America’s most experienced purchasing firm to address the product challenges faced by corporate chefs and menu professionals.

 

Our service provides real-time access to sourcing experts that use decades of foodservice experience to locate the exact product you need, while handling logistics from farm (or plant) to table.

 

Quickly locate a winning L.T.O. item, replace high cost protein suppliers, expand your CORE items bid list, select #1 product overstocks, or simply discover your next great supplier.

 

Together, working with Chef Support Services (CSS) you will quickly transform the sourcing process into a flexible, powerful and profitable culinary resource. When you select products “outside-of-the-supply-box” without the boundaries imposed by distributors, GPO's, brokers, buyers or sales representatives, you unleash the true potential of your talent and menu. 

 

Menu Making Made Easier  w/ No-Out-Of Pocket Expense.

Contact us to see how we can help you!

 

Office: 912-634-0030

Fax: 912-634-0031

Email:  info@strategicpurchasingservices.com 

Fred Favole, CPO (912) 399-1427

Dan Patterson, VP Services (678) 315-2389

Catherine Gruber , Manager (912) 623-0030