Do you think Charles Dickens had a foodservice buyer in mind when he created the despicable Christmas-hating Ebenezer Scrooge? Think about it, as the Holiday season surrounds us, are you more prone to blurting out a “Ho, Ho, Ho!” or a “Bah, Humbug!”?
In their continual search for ways to cut food costs, buyers often become the worst type of shopper: They shop by total case cost rather than by yield. How often have you been sucked into buying a product simply by comparing case costs?
Did you hear the one about the restaurant company that had 14 different cheese suppliers for 14 different styles of cheese? While that joke may be a bit exaggerated, it is true, too often we forget about the costs associated with delivery. Like the forest for the trees, we see ourselves saving a nickel on a deal only to lose much more than that as an end result.
In my travels around the foodservice world, I have found that many buyers believe collective buying leads to the loss of one of their most prized possessions: price confidentiality.
That’s a number we so often neglect in the purchasing process. We are consumed by gaining a profit and thus seek the best price for the products we buy for our operation.
Any good football coach knows in order for the team to succeed, they need to know how to score. In the world of multi-unit foodservice, your team may include servers, chefs, kitchen workers and various administrators and of course, the buyer.
In Part I of “Optimize Distribution Costs”, we discussed how to determine mark-up, how to improve efficiencies and the importance of consolidation. Remember, there are three basic costs of supply:
How best to manage your costs? Should you consolidate? Shop the market and place orders based on “cherry-picking” the lowest item cost? This is such an important topic; I plan to cover in two parts. Let’s look at the basic costs of supply:
The single best way to reduce your food cost is to shop every item from several distributors each week. If you think this statement is true, congratulations, you are a buyer. If you know there is more to it, you are a purchasing manager.