2. The Organization and Administration of Purchasing6
The Organization and Administration of Purchasing

3. 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.

4. 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

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

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

7. Organizing
Independent Organizations
Chain Operations

8. Independent Operations
Small
Medium-sized
Large
Co-op

9. Chain Operations Local unit level Company-owned stores
Centralized purchasing

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

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

12. 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)

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

14. 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.