Cycle of control

Introduction

For any catering establishment, the basis of preparing and serving meals acceptable to consumers is
the purchasing of food of desired quality. While taking decisions regarding purchasing of foods, the
handling of different commodities should be kept in mind. This is important because the handling
and packaging techniques affect the quality of the food commodities, especially the perishables like
vegetables and fruits. The manner in which the foods are brought from the farms or manufacturing
units to market also affect their nutritional and preservation qualities. It is the duty of the purchasing
manager of the establishment to keep pace with prevailing prices of the commodities in the market.
He or she should also understand the fluctuations from time to time in wholesale and retail markets.
Suppliers tend to offer products which are most profitable to them in the given conditions of supply
and the products with the best and desired quality may never reach an establishment unless the
purchasing manager is aware of the psychology of the supplier.

THE PURCHASING PROCEDURE

The procedure can o the be broken down into five steps

1 A requisition form from an authorized member of staff, for example a Restaurant Manager, Head
Chef or from the storekeeper, informing the purchasing manager of the low stock levels of items.

2 The selection of the source of supply.

3 Entering into contract with the supplier by phone or in writing and negotiating the price to be paid
and a satisfactory delivery performance with particular reference to the time, date, and the place of
delivery.

4 The acceptance of goods ordered and the adjustment of any discrepancies in quality or quantity of
goods delivered.

5 The transfer of commodities to the ordering department or to the store or cellar.

The selection of a supplier

A supplier can be easily selected from among those that the buyer has previously purchased from in
that quality of goods received, price and services offered would be known. When seeking a new
supplier caution must be exercised and detailed enquiries made to cover at least the following
points: -

1. Full detail of the firm and range of items they are selling

2. Copies of recent price list.

3. Details of trading terms.

4. Details of other customers

5. Samples of product.
A visit should be made to any potential supplier to see the size of the company, the full range of
products, the size of processing and storage facilities, and the size of their transport fleet and to
members of the management team.

This procedure would convince the supplier of the professionalism of the purchasing manager.
Having selected suppliers and placed them on an approved supplier list, and after having purchased
from them, it is necessary to periodically evaluate their performance rating system. The three main
performance criteria which are

1. Price performance

2. Quality performance

3. Delivery performance

1. Price performances

The cheaper item is not necessarily the best buy; often a cheap item is of a low quality. One supplier
may specialize in lower quality goods at a lower price whilst another may specialize in high quality
goods at higher prices. Both suppliers are specialists and both may supply the same buyer with
similar goods but of different qualities. Which supplier the buyer chooses depends on the quality
required- the corresponding price will then have to be paid. Price, however, is not always related to
quality. The purchasing offer needs to guard against this.

2. Quality performances

This is the ability of a supplier to supply the buyer consistently with goods of the desired quality laid
down in the purchase specification. Consistency in meeting the purchasing specification would give a
high-quality performance rating.

3. Delivery performance

This is the ability of the supplier to meet agreed delivery times and dates with the buyer. Prompt
deliveries mean that the goods will be delivered when required and when staffs are available to
check them efficiently for quantity and quality. Late deliveries will often add to the pressure of work
at the receiving department, when other goods are also being checked in, and to complications in
the production department. The nearer the scheduled delivery date and time the higher the delivery
performance rating.

METHODS OF PURCHASING

The methods of purchasing depend on the quantity of food items required by the establishment. The
methods are as follows:

1. Purchasing by Contract

There are two common types of contracts used: -

1. The specific period contract.

2. The quantity contract.

The specific period contract – The specific period contract which aims at determine the source of
supply and the price of goods for a stated period often of three or six months. This reduces the time
and labour and negotiating and ordering to a minimum, plus it has the added advantage of assisting
with budgeting and pricing, when the prices of items are fixed for a period of time. Examples – Milk,
Cream, Bread and so on.

The quantity contract – The quantity contract which aims at ensuring continuity of supply of a given
quantity of an essential item at an agreed price over a particular trading period. Examples – Purchas
of frozen food for the use in a banqueting party.

A contract is a legal document and that the conditions of the legal contract should be prepared by
the firm’s solicitors to safe guard against possible areas of dispute.

2. Purchasing by daily market list – This method is used when purchasing perish able foods on a daily
basis and when it is possible to have two or more approved suppliers. A senior member of the
kitchen staff would take a quick stocktake of the foods left after each lunch service; pass this
information to the head chef who would complete the daily market list by entering the quantities of
all items which is required to be purchased for the next day’s business in the wanted column. The list
would then be processed by the purchasing officer. Each approved supplier would be telephoned
and ask to quote a price for each of the items. The price would be on the based on the quality of the
item required, the quantity required and the esteem placed by the supplier to supply a particular
establishment. The price quoted would be entered on to the daily market list and then a decision
made by the purchasing manager as to where to place the order for each item. This may result in
two or three suppliers to complete the order.

3. Purchasing by week /fortnightly – This is used to purchase grocery items where a delivery of once
a week or fortnight is adequate. This method is similar to that described when purchasing perishable
foods by daily market list.

The head store keeper would complete the stock in hand column on the master list and also fill in
the wanted column for each item, based on the normal the normal order quantity and the volume of
the business expected.

Meanwhile the purchasing office would send out to each grocery supplier a copy of the list on which
supplier should quote their prices. On receipt of quotations these would be entered on to a master
quotation list and a decision then made about where the orders for each item are placed. This would
be based on requirement in the next week /fortnight.

4. Purchasing by Cash and Carry – This method is of particular interest to the medium and small
establishments whose orders are often not large enough to get regular deliveries from the
wholesaler and food manufacturer. This is most suitable method for small and medium sized
establishments. There is complete freedom for purchasing from the market at competitive price and
buyer can personally check the quantity and taste of the item. However, the caterer has to pay cash
for all the items purchased and has to provide his own transport and his own staff to collect the item
from the place of purchase.

5. Purchasing by paid reserve – This method is used when it is necessary to ensure the continuity of
supply of an item for the menu, which is of particular importance to a restaurant, for example –
Jumbo size prawns, frozen fillets of Tenderloin and so on. The caters buys in advance of these items
to be on a safe side and to cover the needs for future months, and requisition his weekly
requirements from suppliers. The stocks are held by the supplier.

6. Total supply – This method is relatively new. It is a method offered only by a few major suppliers
who are able to offer a full supply service of all commodities to cater. This advantage of only having
to negotiate with one supplier, It reduces volume of paper work, and far fewer deliveries. The main
disadvantage is that of being tied to one major supplier, whose prices may not be competitive as
when using several suppliers and whose range of certain commodities may be limited.

7. Cost plus – This method is used frequently in the welfare sector such as hospitals, catering
institution, boarding houses and so on. The approved supplier is paid exactly the same price that he
paid for the commodities plus and agreed percentage to include the cost of handling, delivery
charges and a margin of profit.

Purchase specification

Purchase specifications should be used whenever possible while purchasing perishable or non-
perishable goods. A purchase specification is a concise description of the quality, size and weight
required for a particular item. Each specification would be particular to an establishment and would
have been determined by members of the management team. The management team includes {The
Ex.Chef, Food and Beverage Manager and the Purchase Manager).establishing standard purchase
specification based upon a thorough study of – Market , Menu ,Portion sizes, Selling prices and Yield
tests. The copies of the specification should be kept by the relevant members of the management,
(Purchasing agent, Food and Beverage Manager, Food and beverage Controller, Ex. Chef and the
Receiving Clerk.

The reasons for preparing specification are –

1. It establishes a buying standard of a commodity for an establishment so that a standard product is

2. It informs the supplier in writing precisely what is required, and it assists the supplier in being
competitive with pricing.

3. It provides detailed information to the goods received clerk and the storeman as to the standard
of the foods to accept.

4. It makes staff aware of the difference that can occur in produce for example size, weight, quality,
quantity and so on .

Purchasing of beverages

Apart from purchasing of foods, it is also very important to exercise controls on beverage purchasing
in order to maintain an appropriate supply of ingredients for producing beverage products, to
ensure that the quality of ingredients purchased is appropriate for their intended use and to ensure
that ingredients are purchased at optimum prices.

There are five sources of supply for purchasing beverages:

1) Wine shippers

Wine shippers purchase the wines from their origin countries. Then these wines are shipped to
places where they are demanded. As the shippers are concerned to only one region that is why they
have only a limited variety of wines. They only make deals with well-known and larger
establishments. The wholesalers of wines and spirits usually bring the products of the shippers.

2) Wholesalers
These are the subsidiary wine companies if the large breweries or independent wine companies.
They have a large variety and regular supply of beverages.

3) Beverage manufacturers

Any purchasing manager contacts the beverage manufacturers when the establishment wants to
purchase the beverages in sufficiently larger quantities. Normally, the spirits and beers are
purchased by this method. By opting this method, the establishment has to pay low price for the
beverages as compared to the purchases from any other sources.

4) Cash-and-carry

This method offers a large variety of beverages at very affordable and attractive price but has the
disadvantage that it offers no other services. They are useful in emergencies or when some special
offers are made.

5) Auctions

This method is only useful for the sale of wines. By this method only small wines can be purchased
from any other hotel or private establishments.