© 2006 thomson-wadsworth. learning objectives define purchasing authority. describe the various...

Learning Objectives

• Define purchasing authority.• Describe the various ways in which

purchasing is done.• Discuss how foodservice menus are

written.• Discuss each of the five components of

a specification.• Differentiate among supplies, groceries,

perishables, and equipment and capital equipment.

Learning Objectives

• Describe the difference between performance and technical specifications.

• Write specifications for different types of products.

• Describe the various ways of receiving goods and material.

• List the equipment needed for receiving in foodservice and non-foodservice operations.

Learning Objectives

• Determine the different ways material may be stored.

• Describe the equipment needed for storage of perishable and nonperishable goods.

• List the general principles that should be used for all types of storage.

• Differentiate between perpetual and physical inventory methods.

Learning Objectives

• Describe the various ways to distribute material from stock.

• Determine how inventory is valued.

• Discuss the use of Hazard Analysis and Critical Control Point (HACCP) in the procurement of food products.

Overview

• Material Management– The process of controlling the acquisition and

distribution of material within an organization.

• Aspects of material management include:– Types and quantities of raw materials

purchased– Handling, storage, distribution– Valuation– Control

Procurement Parameters

• Procurement – Purchasing, or otherwise obtaining,

material for use in an organization.• Purchasing Authority

– A measure of a manager’s control over the procurement of material; the amount a manager is allowed to spend without obtaining permission from his or her supervisor.


• Methods of purchasing


• Methods of purchasing– Prime Vendor - The supplier that

provides most of the material purchased by an organization.


• Methods of purchasing– Purchasing Cooperative - A group of

buyers who join together for the purpose of negotiating better purchasing contracts with vendors.

– Multiple-Vendor Purchasing - Procurement of goods from several vendors.

• May be motivated by the desire to improve selection or the need to get the lowest price.


• Methods of purchasing– Bid Purchasing - A type of purchasing that

requires vendors to bid on the item or items an organization specifies in order to be eligible to get the business.

• Used mostly for capital equipment and contracts.• The business is generally awarded to the lowest

bidder who meets the specifications.• Used by some large governmental organizations

such as prisons, the military, hospitals, etc.


• Methods of purchasing– Cost Plus - A pricing method in which the

purchaser pays the actual cost of the goods to the vendor, plus a markup (often a set percentage) to cover the vendor’s handling costs and profit.

– Warehouse Club Buying - An informal type of purchasing that is characterized by self-service.

• Buying is usually cost effective for small operations.


• Methods of purchasing– Retail - A type of supplier, usually not

covered by a purchasing agreement, that offers materials to the general public at higher prices than those charged by wholesale vendors.• Sometimes used by organizations for last-

minute or emergency purchases.

Menus as the Basis for Procurement in Foodservice

• Types of menus– Single-Use Menu - A menu that is

designed to be used only once.– Static Menu - A menu that is used from

day to day; it usually has a wide range of items from which the customer can choose.

– Cycle Menu - A menu that varies from day to day, but repeats itself when the cycle is complete. The menu cycle may be a few days or several weeks in length.

– Combination of types (ex: static + cycle)


• Creating the menu– Determine meal requirements and

type of menu– Identify possible system constraints– Examples are listed in Table 11.2...


• Creating the menu– Determine attributes of meal appropriate for

customers– Create menu:

• Choose center-of-plate item for main meal of the day

• Choose center-of-plate item for other non-breakfast meal

• Add accompaniments/garnishes• Plan before- and after-meal items, beverages• Plan breakfast meal (if served)


• Creating the menu– Once created, menu must be

implemented– Cycle menus should be laid out with

spreadsheets to prevent repetitious patterns

The Specifics of Purchasing

• Specifications– Written descriptions of the material to

be purchased, including item name, form, quantity, quality, and pricing unit.

The Specifics of Purchasing – Specifications


• Item Name - The name of the product that is purchased; may be generic or brand specific.

• Form - A description of the product, which may include weight, size, packaging, and so on.


• Quantity - The amount of a product to be purchased, often stated in multiples that relate to how the product is typically packaged.– Odd Lot - An amount of a product that is

different from how a product is typically packaged. Orders in odd lots require the vendor to open packages to deliver the specified amount.


• Quantity– Par Level - The minimum amount of a

specific item that is to be kept on hand at all times. Sometimes the term par stock is also used.

– Reorder Point - The inventory level that is set for an item that triggers the placement of an order for more of that item so that the stock on hand does not fall below the par level.


• Quality - A description of the minimum acceptable characteristics of an item, which can be represented using brand names, government grades, or detailed descriptions.

• Pricing Unit - The unit on which the price of the item is based.

• Miscellaneous - Any additional information the purchaser includes for the vendor’s information to ensure receiving the correct product under the right conditions.


• Other considerations– Supplies - Products characterized by

having no finite shelf life.• Usually, should not be overstocked

because this wastes space• Customized supplies may be purchased

in volume to lower costs

The Specifics of Purchasing – Other Considerations

• Groceries - Food products that are shelf-stable at room temperature.– Shelf Life - The amount of time groceries

can be used until they expire; indicated by a “use by” date.

• Perishables - Food purchases characterized by a limited shelf life and usually requiring cold storage such as refrigeration or freezing.


• Perishables– HACCP (Hazard Analysis and

Critical Control Point) - Process that promotes food safety protocols and outlines steps in the preparation of a food item starting from its point of delivery all the way to consumption.


• Small Equipment - Reusable equipment that costs more than supplies and has a longer life expectancy.– Replacements - Products that are

purchased to replace items that have been lost, broken, stolen, or worn out with use.


• Delivery options– Frequency of Delivery - The number of

times deliveries are made by a vendor to a purchasing organization, which could be daily, weekly, or monthly.

– Timing of the Deliveries - The time of day deliveries should arrive.

• Should correspond with production needs and the receiving personnel’s schedule.

– Designation of responsibility for transporting the product from the loading dock to the storage area.


• Capital goods and equipment– Capital Goods - Large equipment,

considered fixed assets, that is durable and can be depreciated over a period of time.

– Design/engineering services may be used when several pieces are bought at once

– Some expertise is necessary for choosing individual pieces

• ex: research using trade magazines, attending trade shows


• Capital goods and equipment– Performance Specifications - Written

descriptions of how a piece of equipment is required to act, including factors that relate to speed, safety, production capacity, accuracy, and so on.

– Technical Specifications - Written descriptions for capital goods or other products that specify functions that can be determined by an objective test or measurement.

• ex: type of material, dimensions, weights, etc.

Receiving

• Receiving – The process of accounting for

material that is delivered to an organization.

Receiving

• Methods– Invoice Receiving - The receiving of goods

in which the amount of material sent is included on the shipping document and the receiver verifies that the amount listed is correct.

– Blind Receiving - The process of receiving material with the amount not included on the shipping document, so the receiver must write in the amount that was delivered.

Receiving

• Documentation– Invoice - The bill that is issued for a

product that has been delivered. • It may accompany the delivery or be

issued separately.

– Packing Slip - A shipping document used to verify the receipt of a product, which is later compared with the invoice.

Receiving

• Documentation– Tickler File - A method of reminding

oneself of “loose ends” that need follow-up. • Often used for tracking procurement

discrepancies such as back orders, cancellations, and shortages to ensure smooth production and proper payment, and to document vendor performance.

Receiving

• The receiving area– Equipment needed depends on type

of product received– May be front desk or receiving area

(dock)– Receiving staff inspect shipments,

rejecting incorrect/damaged ones

Receiving

• Receiving food products– Equipment/space requirements– HAACP

• FDA’s Food Code - Food and Drug Administration guidelines that specify correct food-handling techniques; at http://vm.cfsan.fda.gov/~dms/fc01-toc.html

• ServSafe at http://www.nraef.org/servsafe/

http://vm.cfsan.fda.gov/~dms/fc01-toc.html

http://vm.cfsan.fda.gov/~dms/fc01-toc.html

http://www.nraef.org/servsafe/

Storage

• Just-in-Time – A type of delivery that is designed to

reduce inventory by having goods arrive as needed for immediate use.

• Storage Area– A designated space used to hold and

secure raw material until it is needed for production.

Storage

• Stock Rotation – The method used to move stock so

that goods do not expire and older goods are used before newer ones.

• Use By Date – The expiration date on a product,

which indicates the last date the product should be used.

Storage

• Storerooms– Good transportation and

communications systems = less inventory• Onsite foodservice = 7-10 days' worth• Restaurants = 3-5 days' worth

Storage – Storerooms


• Foodservice storage principles:– Shelving– Climate control– Accessibility– Visibility– Separate from non-

food chemicals


• Refrigeration– Walk-In Refrigerator - A type of

cold storage that is large enough for people to enter.

– Reach-In Refrigerator - A small cold storage unit in which all contents can be reached through a door located on the front of the unit.


• Refrigeration– Pass-Through Refrigerator - A

small cold storage unit with doors on opposite sides so that foods can be put in on one side and taken out on the other.• Frequently these are built into walls, so

that one side is in a kitchen and the other side is in a cafeteria.

Inventory

• Inventory – The material and goods kept on hand.

• Physical inventory– The process of counting each item

that is in storage at a specific time to determine what product is on hand.

Inventory

• Perpetual Inventory – An ongoing inventory control system that

tracks the amount of material on hand by: • Taking an initial physical inventory• Adding goods that have been purchased• Subtracting goods that have been

distributed or used in production– Real Time - An accounting of what is

happening as it happens.

Inventory

• Distribution from storage– Must be controlled for perpetual

inventory to function properly• Open Storeroom

– A storage system in which any employee can obtain goods from the storeroom at any time.

– Physical inventory should occur weekly

Inventory

• Ingredient Room – A designated area of a food production facility

in which the items needed to prepare a certain recipe are measured and assembled.

– Some pre-preparation may also be done here.

• Point-of-sale systems– Point-of-Sale - An inventory system in which

the cash register is linked to inventory control, automatically subtracting an item as it is used or sold.

Inventory

• Inventory control methods– Thoughtful arrangement of items– Stock rotation

•High-Density Shelving - A type of storage unit that moves on tracks built into the storeroom.

– Security

Inventory

• Valuation of inventory– Method 1: value the stock at the price paid

for each item– Method 2: value the stock at the current

(replacement) price– Method 3: assign a weighted average value

for each item– Alternate method: value of inventory related

to time• Cost of inventory used over several days/number

of days = daily cost of raw material

Conclusion

• One measure of the scope of management of an individual is that manager’s purchasing authority.

• A variety of purchasing methods are available, ranging from the most formal—bid purchasing—to the least formal—retail buying. In today’s marketplace, prime vendor contracts are becoming the norm for most large operations.

Conclusion

• In foodservices, the menu serves as the basis for purchasing.

• Specifications include the name and form of the product needed, as well as the quantity, quality, and pricing unit; miscellaneous data can be added as necessary.

• Both technical and performance specifications can be written for material.

Conclusion

• Material purchases include, but are not limited to, the major categories of supplies, groceries, perishables, small equipment, and capital equipment.

• Good receiving practices include accountability for and the safe handling of all material received.

• Goods should be properly and securely stored as soon as possible after delivery.

Conclusion

• A method must be in place to account for inventory on a regular basis. This includes knowing what is received and what is distributed from stock, as well as the total amount (and value) of stock on hand at any given time.

• HACCP principles must be used throughout the procurement process.

Specifying Performance in Foodservice Equipment

• Energy efficiency– EPA’s Energy Star

• Type of fuel (electric vs. gas)• Standards

– UL approved– NSF International certified– New resources: ASTM, NAFEM,

Foodservice Equipment Reports, FSTC

Specifying Performance in Foodservice Equipment

• New developments– Online kitchens– Equipment that adjusts temperatures

automatically– Equipment that uses no energy until a

pan is place on the surface– Flash-bake ovens

© 2006 thomson-wadsworth. learning objectives define purchasing authority. describe the various...

Documents

thomsonwadsworth slide

procurement of material

purchasing authority

bid purchasing

purchasing cooperative

better purchasing contracts

distribution of material

different ways material