The Organization and Administration of Purchasing 6 The Organization and Administration of Purchasing

You Should Be Able To: Describe the methods used to plan and organize the purchasing activities of a hospitality operator. Recognize the issues involved in administering purchasing activities.

You Should Be Able To (cont.): Differentiate the purchasing organizational pattern between small independent, medium independent, and multiunit hospitality operations. Explain the advantages and disadvantages of centralized purchasing

The Administrative Stages of Purchasing Planning Organizing Staffing Training Budgeting Directing Controlling – direct vs. indirect

Planning Objectives of purchasing Maintain adequate supply Minimize investment Maintain quality Obtain lowest possible edible-portion (EP) cost Maintain competitive advantage

Organizing Independent Organizations Chain Operations

Independent Operations Small Medium-sized Large Co-op

Chain Operations Local unit level Company-owned stores Centralized purchasing

Staffing Process of recruiting, hiring, and training personnel to perform specific tasks in an organization.

Training Entry level Job and company orientation Formal instruction On-the-job training

Training (cont.) Professional Training Options National Restaurant Association National Restaurant Association Educational Foundation (NRAEF) Institute of Supply Management (ISM) North American Association of Food equipment Manufacturers (NAFEM)

Budgeting Budgeting – a realistic statement of management’s goals and objectives, expressed in financial terms.

Controlling Controlling – systems and procedures used by managers to ensure that the actual costs of doing business are consistent with the expected (or budgeted or theoretical) costs.