49378

2006 Thomson-Wadsworth
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 managers 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
Prime Vendor - The supplier that provides most of the material purchased by an organization.
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.
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.
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 vendors 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.
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 nonbreakfast 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 vendors 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 personnels 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
FDAs Food Code - Food and Drug Administration guidelines that specify correct food-handling techniques; at http://vm.cfsan.fda.gov/~dms/fc01toc.html ServSafe at 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
Storage Storerooms
Foodservice storage principles:
Shelving Climate control Accessibility Visibility Separate from nonfood chemicals
Storage Storerooms
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.
Storage Storerooms
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 managers purchasing authority. A variety of purchasing methods are available, ranging from the most formalbid purchasingto the least formalretail buying. In todays 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
EPAs 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

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2006 Thomson-Wadsworth

Aspects of material management include:

Menus as the Basis for Procurement in Foodservice

Menus as the Basis for Procurement in Foodservice

Menus as the Basis for Procurement in Foodservice

Menus as the Basis for Procurement in Foodservice

Menus as the Basis for Procurement in Foodservice

The Specifics of Purchasing

The Specifics of Purchasing Specifications

The Specifics of Purchasing Specifications

The Specifics of Purchasing Specifications

The Specifics of Purchasing Specifications

The Specifics of Purchasing Specifications

The Specifics of Purchasing

The Specifics of Purchasing Other Considerations

The Specifics of Purchasing Other Considerations

The Specifics of Purchasing Other Considerations

The Specifics of Purchasing

The Specifics of Purchasing

The Specifics of Purchasing

Specifying Performance in Foodservice Equipment

Type of fuel (electric vs. gas) Standards

Specifying Performance in Foodservice Equipment

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