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Typical Ordering Procedures Buyer is most concerned with buying the right amount of the right quality at the right time with the right supplier services.

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Presentation on theme: "Typical Ordering Procedures Buyer is most concerned with buying the right amount of the right quality at the right time with the right supplier services."— Presentation transcript:

1 Typical Ordering Procedures Buyer is most concerned with buying the right amount of the right quality at the right time with the right supplier services for the right edible portion (EP) costBuyer is most concerned with buying the right amount of the right quality at the right time with the right supplier services for the right edible portion (EP) cost First step, determine an ordering schedule..First step, determine an ordering schedule.. How do you buy groceries for your house?How do you buy groceries for your house? Do you buy more when you are hungry?Do you buy more when you are hungry?

2 Order Schedules Help to promote efficient scheduling.Help to promote efficient scheduling. Plan weekly expenses.Plan weekly expenses. Develop supplier relationships.Develop supplier relationships. Understand lead times for different vendors.Understand lead times for different vendors. Knowledge Is the Force Of Empowerment

3 Optimal Inventory Level Inventory Levels – Determine the amount of inventory that will adequately serve the operation without having to suffer the costs of excess inventory.Inventory Levels – Determine the amount of inventory that will adequately serve the operation without having to suffer the costs of excess inventory. –Percentage of Sales –Percentage of monthly expenses –Days in Inventory

4 Par Stock Approach Accept the suppliers’ order procedures and delivery schedules.Accept the suppliers’ order procedures and delivery schedules. Allows the buyers to balance shelf life with inventory levels.Allows the buyers to balance shelf life with inventory levels. Just-in-Time – Not too much and not too little.Just-in-Time – Not too much and not too little. Buyer need to adjust for special parties and business fluctuations.Buyer need to adjust for special parties and business fluctuations. Requires periodic adjustment.Requires periodic adjustment. Frequent deliveries require additional attention to prep schedules.Frequent deliveries require additional attention to prep schedules.

5 Correct Order Size and Order Time Par Stock Approach – Build up each item to at least a pre-determined level.Par Stock Approach – Build up each item to at least a pre-determined level. –Items –Par Level –On Hand –Order –Usage (Optional)

6 Exercise – Steak Deliveries Need to limit inventory –Need to limit inventory – –Waste –Theft –Product Quality –Inventory Carrying Cost

7 Combination Approach Par stock approach for normal day to day operations.Par stock approach for normal day to day operations. Levinson approach for special events and banquets.Levinson approach for special events and banquets. –Limits leftovers and dead-stock.

8 Purchase Orders Purchase Order (P.O.) – request that a supplier deliver what the buyer wants at the time and place specified by the buyer.Purchase Order (P.O.) – request that a supplier deliver what the buyer wants at the time and place specified by the buyer. Up to 8 copies of the P.O. may be required.Up to 8 copies of the P.O. may be required. –Copy to the supplier. –Additional copy to the supplier to be sent pack with the order. –Third copy to the supplier to be initial and returned to the buyer as confirmation of the order. –Buyer keeps a copy. –Receiving clerk receives a copy. –Department head receives a copy. –Accountant receives a copy. –Corporate office receives a copy.

9 Purchase Requisitions Used in the hospitality industry whenever the buyer needs an item that they do not regularly buyUsed in the hospitality industry whenever the buyer needs an item that they do not regularly buy - Time consuming to manage this system - Too many people making decisions +Training device for potential buyers +Relieves the buyer of ordering mistakes +Limits paperwork for the buyer +Provides an added level of control

10 Essentials of Good Receiving Competent PersonnelCompetent Personnel Proper Receiving EquipmentProper Receiving Equipment Proper Receiving FacilitiesProper Receiving Facilities Appropriate Receiving HoursAppropriate Receiving Hours Copy of All SpecificationsCopy of All Specifications Copy of the Purchase OrderCopy of the Purchase Order –Receiving is the proof of purchasing – Need to be sure that what you ordered is what you got. –Receiving is the act of inspecting and either accepting or rejecting deliveries.

11 Delivery Arrives Check immediately for proper quantities.Check immediately for proper quantities. Check for proper quality.Check for proper quality. Check prices and price extensions.Check prices and price extensions. Invoice Receiving Receiver uses the invoice to check against the quality, quantity and prices of the items delivered.Receiver uses the invoice to check against the quality, quantity and prices of the items delivered. Receiver may also compare the invoice against the purchase order as a further check.Receiver may also compare the invoice against the purchase order as a further check.

12 Rejection of Delivery Receiver may note a pricing discrepancyReceiver may note a pricing discrepancy –Request for Credit memo is sent back to the supplier. –Supplier may authorize the driver to adjust the total on the invoice. Receiver may send back a portion of the delivery due to poor quality.Receiver may send back a portion of the delivery due to poor quality.

13 Additional Receiving Duties Date / Day dot the delivered itemsDate / Day dot the delivered items Price all delivered itemsPrice all delivered items Create bar codes – large hospitality operationsCreate bar codes – large hospitality operations Apply “Meat tags”Apply “Meat tags” Maintain Fresh Oyster tagsMaintain Fresh Oyster tags Housekeeping dutiesHousekeeping duties Update AP pricesUpdate AP prices

14 Alternative Receiving Practices Standing Order ReceivingStanding Order Receiving Blind Receiving – No information on quantity or priceBlind Receiving – No information on quantity or price Odd Hours ReceivingOdd Hours Receiving Drop Shipment ReceivingDrop Shipment Receiving Mailed DeliveriesMailed Deliveries COD DeliveriesCOD Deliveries Key Drop DeliveriesKey Drop Deliveries

15 Breakdown of Expenses Food and Beverage is generally 35%Food and Beverage is generally 35% Labor costs are 30%Labor costs are 30% Controllable Expenses range between 7.5% and 12%Controllable Expenses range between 7.5% and 12% –Repair and Maintenance is 1.5-3% (estimated) –Supplies are 2.0-3.0% (estimated)

16 Non Food Expense Items Signature items that promote the image of your restaurant.Signature items that promote the image of your restaurant. –Functional Component –Advertising Component Variety of Non food items to choose.Variety of Non food items to choose. Degree of product convenience.Degree of product convenience. –Disposable vs. reusable items Impulse purchasing – Want vs. NeedImpulse purchasing – Want vs. Need Supervising the use of non food items.Supervising the use of non food items.

17 Non Food Expense Items Quality and Volume DiscountsQuality and Volume Discounts Non Food Packers BrandsNon Food Packers Brands Operating Supplies SchemesOperating Supplies Schemes Safety Considerations for chemicals.Safety Considerations for chemicals. New vs. used purchasesNew vs. used purchases Equipment ProgramsEquipment Programs –Coffee machines, Ice cream freezers Lifetime cost – you get what you pay for.Lifetime cost – you get what you pay for.

18 Typical Non Food Items Cleaning SuppliesCleaning Supplies Cleaning ToolsCleaning Tools Maintenance SuppliesMaintenance Supplies Permanent WarePermanent Ware Single Service Disposable WareSingle Service Disposable Ware Preparation and Service UtensilsPreparation and Service Utensils FabricsFabrics Other Paper ProductsOther Paper Products Miscellaneous ItemsMiscellaneous Items

19 Cleaning Supplies As Used Cost – consider the efficiency of the product.As Used Cost – consider the efficiency of the product. Product EffectivenessProduct Effectiveness AdaptabilityAdaptability Product SafetyProduct Safety Ease of UseEase of Use OdorOdor Container Size Dispensing UnitContainer Size Dispensing Unit Supplier ServicesSupplier Services

20 Cleaning Tools Examples – Brooms, mops, buckets, vacuum cleaners, pot brushes and squeegeesExamples – Brooms, mops, buckets, vacuum cleaners, pot brushes and squeegees ConsiderationsConsiderations –Cost –Employee Skill –Materials used to make them –Used Tools

21 Maintenance Supplies ConsiderationsConsiderations –Cost –Labor Availability –Used Supplies –Sizes –Capitalizing Expenses Examples – Light bulbs, plumbing parts, AC FiltersExamples – Light bulbs, plumbing parts, AC Filters

22 Permanent Ware Initial investment is capitalized as a start up expense.Initial investment is capitalized as a start up expense. Replenishment orders are part of the cost of doing business.Replenishment orders are part of the cost of doing business. Examples – plates, flatware, glasses, S&P shakers.Examples – plates, flatware, glasses, S&P shakers.

23 Permanent Ware - Considerations Determine your needs.Determine your needs. AP pricesAP prices The Need to MatchThe Need to Match Source of SupplySource of Supply Materials Used to Make the ItemMaterials Used to Make the Item SizesSizes Length of ServiceLength of Service Used Permanent WareUsed Permanent Ware

24 Single Service Disposable Ware Determine what you need.Determine what you need. Packaging –Packaging – –To Go Silverware packets –To Go Packaging vs. Take Home Food

25 Preparation and Service Utensils Initial investment is capitalized as a start up expense.Initial investment is capitalized as a start up expense. Replenishment orders are part of the cost of doing business.Replenishment orders are part of the cost of doing business.


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