SoftDrink industry

PURCHASE DEPARTMENT
OBJECTIVES
 Describe what is involved in purchasing,receiving,storage and
inventory control
 State the three areas in which the purchasing agent must work, as
well as their importance and relationship
 Name two reasons that a purchaser must know how the market
works
 List two advantages and two disadvantages of purchasing goods
from master and specialty distributors
OUTLINE
 Introduction to procurement
 Purchasing

I. The three areas of purchaser familiarity

II. Who does the purchasing
III. Method of purchasing

IV. The purchase specification to effective purchasing

V. Supplier selection
 receiving
PROCUREMENT

 Purchasing
 Receiving

 Storage
 inventories
Goods Received
Notes Maintain Receipts
Print Claims
Stage .1

1.PURCHASE
Return Notes

Item Inspection

Inbound
&/or
Storage List
PURCHASING
 Purchasing is an essential function for any foodservice operations
 The nature of food service biz.with its unpredictable flow, makes
purchasing a difficult task
 Operators have to be careful not to order much otherwise it will be
spoiled when not in use.
 Purchasers do not buy only for production, they also buy items for
various other department of the operations
 Therefore they must be in close contact of the market in various sectors
.
 Specification, or the specific characterstics of the goods needed, must
be developed so that both the buyer and seller understand exactly what
is needed.
ROLE OF PURCHASING DEPARTMENT

 Purchasing is profit centre

• Better purchasings saves dollars for products ,supplies & services
• Savings go directly to bottom line
 Profit centre
• Department generates revenue greater than expenses
 Cost centre
• Does not generate profit to cover expenses
PURCHASING CYCLE
 Issuing
• Department completes an issue requisition to store room
• Store room issues requested product
 Purchasing
• Storeroom sends purchasing requisition to purchasing department
• Purchase department completes indent and sent it t:
 Supplier
• Provides product and invoice to receiving department
 Receivings
• Checks product against delivery and purchase order
• Sends delivery invoice to accounting
THE THREE AREAS OF PURCHASER FAMILIARITY

 The role of the purchaser is to find best quality product at

best price and to ensure that it will arrive on time
1. Market
• Purchase the good and service for the operations
operations
• the establishment for from where the purchase should
purchase
• Customers
PURCHASING & THE MARKET
 Purchasing- acquisition of goods
• Right product on right time, in right amount, at the right price

 Knowledge of market

• Involves finding sources of supply& determining which chemical

can obtained from which supplier
• Buyer must know market and product, andhave general buisness
acumen
 Buyer has powerful influence on food distribution system

• Listen to desire of customers

• Determine what is grown and packed

• Understand how items are produced and packed

METHODS OF PURCHASING
 Informal
• Price quotes by telephone or personally with salesperson

• Amont of purchase is small- no time for formal purchasing practices

• Item can be obtained from 1 or 2 sources

• Need is urgent and immediate delivery is required

• Stability of market is unstable

 Formal

• Tax supported institutions usually required to competitive bidding

• Culminates in formal contract between buyer and supplier

• Understand legal implications of contract.

 Independent purchasing

• Done by unit or department that has been authorised to purchase

GROUP PURCHASING
 bringing together food service manager from
different operations for joint purchasing
 Advantage=volume of purchase is large enough
for volume discount
 Site is selected, purchasing personnel hired &
managers serves as advisory committee
PURCHASE SPECIFICATIONS
 Purchase specification is the precise written statement of product’s
characteristics required by a user
 List of detailed characteristics desired in a product for a specific use

• Primary safeguard of foodservice quality is adherence to specifications

 To write the specifications will help the control the fluctuation of

nature
1. Communicate the characteristic of the product and the service needed
for the operation, and help eliminate misunderstanding between buyer
and seller
2. Provider the receiver with the product characteristics he or she needs
to see before accepting good at the operations.
SUPPLIER SELECTION
 Purchaser have several options when choosing the type of
supplier with which they will deal
 Supplier can either limit themselves to a few type of goods or they
can be master distributors
 A number of factor must be considered in making selection

 Within most geographical areas, purchaser must have the choice

of a number of distributors
 Traditionally,suppliers specialized only in one type,such as
produce dairy or sea food rather than a wide range of goods
 Nowadays, the trend in the industry is toward distributions handle
a wide range of both food and nonfood items.
WHO DOES THE PURCHASING?

 The size of the operation,as well as whether its an

independent operation or part of chain,can have a dramatic
effect on role function of the purchaser
 Smaller operations

• A possible advantage is that persons who places the order s

also the one receives it,a control problem may aise
• An unscrupulous person could steal some goods with a
driver to defraud the foodservice op.
• Smaller op.s cannot justify or afford having a person whose
sole responsible
FORMAL PURCHASING

 Is the systematic and planned process of

determining what is needed, checking price and
negotiating with suppliers and obtaining a new
good
INFORMAL PURCHASING
 Less complex then formal purchasing
 The op. call one supplier and orders what the rest
needs
 Specification not used,prices are not checked
with other suppliers
PURCHASE ORDER
 Written record of all orders
 Includes

• Brief descripion of the product

• Quantity

• Price

• Supplier

 Ensures

• Product were actually ordered

• Correct quantities have been delivered

THANK YOU