WHAT IS PURCHASING
Purchasing is an essential foodservice
function. today's market offers a large variety of products from which
well-informed selections must be made. for example, meat, it should state
details where are the product from and for many portions.
Purchasing is the process of getting the right product
into a facility at the right time and in a form that meets pre-established
standards for quantity, quality, and price.
Basic Flow of Purchasing Activities
- Identify needs by planning new or reviewing existing menus
for each business unit of the foodservice organization
- Determine standards of quality for each food item and write
specifications
- Estimate quantities needed
- Calculate desired inventory or stock levels for each item
- Identify amounts to purchase by subtracting stock levels
from desired quantities
- Develop purchase orders
- Conduct market research on potential vendors' product
availability
- Select and negotiate with vendors
The Market
Market
- the medium through which a change of ownership occurs.
i. Marketing Channel
- the food processing and distribution system, beginning
with the grower of raw food products and ending at the final consumption.
(original from fisherman, farmer)
ii. Primary Market
- the basic source of food supply including growing regions
and processing plants
iii. Secondary Market
- the physical, functional unit of the marketing system in
which products are accepted from the primary markets and distributed to buyer.
( "pasar borong")
iv. Local Market
- suppliers within close proximity to the buyer
v. Broker
- a wholesaler who does not assume ownership of the goods,
brings the buyer and seller together.
U.S Department of Agriculture (USDA)
- The Food Safety and Inspection Service within the USDA is
responsible for inspecting meats, poultry, and other processed foods.
Food and Drug Administration (FDA)
- Responsible for the enforcement of the federal Food, Drug,
and Cosmetic Act, the Fair Packaging and Labelling Act, the Nutritional
Labelling and Education Act and the Food Safety Modernization Act.
- misbranded : wrong label
- standards of identity : specifications in term of
originality
- standards of quality : grades
- standards of fill : quantity
The Buyer
The Art of Negotiation
- the communication skills used by individuals to confer
with each other to reach an agreement or compromise.
Ethics in Purchasing
- products should be evaluated objectively, and buying
decisions made on the basis of quality, price and service.
Types of Purchasing : foodservice organizations work under
different types of purchasing arrangements depending on.
- number of factors
- organizational size, ownership
- geographic location
The Vendor
- a seller, a source of supply
- the selection of vendors is one of the most important
decisions that must be made in purchasing program and the buyer should
carefully evaluate the product line of the vendor.
Methods of Purchasing
i. Informal or open-market buying
- common in smaller foodservice operations, involves
ordering needed food and supplies from a selected list of vendors on daily,
weekly, or monthly price quotations.
ii. Formal competitive bid buying
- written specifications and estimated quantities needed are
submitted to vendors with an invitation for them to quote prices. (for special
item)
Variations on methods of purchasing
i. Cost-Plus Purchasing : a buyer agrees to buy certain
items from a purveyor for an agreed-on period of time based on a fixed mark-up
ii. Prime Vending : involves a formal agreement with a
single vendor to supply the majority of product needs
iii. Blanket Purchase Agreement : used when a wide variety
of items are purchased from local suppliers, but the exact items, quantity, and
delivery requirements are not known.
iv. Just-in-Time Purchasing : the product is purchased in
the exact quantities required for a specific production run and delivered
just-in-time.
Market forms of foods
- costs involved in purchase of and use of fresh or natural
forms versus ready-to-eat foods are major factors to consider
ii. food quality
- before purchasing, the quality of foods most appropriate
to the foodservice operation and their use must be decided.
iii. grades (egg)
iv. quality standards
v.. brands
Purchasing Procedures
i. identifying needs
- requisition
ii. inventory stock level
- a minimum and maximum stock level must be established
iii. quantity to buy
- depends on money, storage space, method of buying, and
frequency of deliveries.
Specifications
- name of the product
- federal grade or brand
- unit on which price was quoted
- name and size of container
- count per container or approximate number per pound
Issuing bid requests
- provides vendors with an opportunity to submit bids for
specific items needed by a buyer.
Developing purchase orders
- requisition
- the purchase order specifies the quantity of each item
needed for the bid period, quality specifications, and required date of
delivery.
Tabulating and evaluating bids
- in most instances, public purchasing laws specify that the
award be made to the lowest responsible bidder. (make a timetable and choose
the best supplier)
Awarding contracts
- the general conditions of the contract should include
services to be rendered, dates and method of deliveries, inspection requests,
grade certificates, procedures for payment and situation.
Summary
-purchasing is an essential function in the operation of a
foodservice organization.
-informal or formal methods of buying may be used.
