How Should Purchasing Management Be Done in Restaurants?

Today, after the competitive environment has become global, it has become difficult for businesses to survive and grow, which is the primary goal of businesses. In this direction, effective purchasing management has become more important than ever in challenging competitive conditions for businesses. Because this management enables businesses to gain competitive advantage. In other words, purchasing management is the process of obtaining the right product, at the right time, at the right price, and from the right supplier. Purchasing management not only provides cost advantage to businesses but is also important in terms of the quality of goods and services to be procured, on-time delivery, and stock control. Purchasing management is an important link in supply chain management. For effective purchasing management to function, two important issues stand out. The first of these is the evaluation of suppliers' performance, and the other is supplier life cycle management. Both issues are seen as indispensable parts of the supply chain, that is, purchasing management.

• Purchasing management
• Purchasing management features
• Purchasing in food and beverage businesses

Purchasing Process

In purchasing operations, it is very important to do market research and correctly analyze market alternatives. The purchasing process begins with the business's request to purchase equipment, parts, etc. from suppliers and ends when the purchasing department confirms that the products and services have been received. The basic steps of the purchasing process are as follows:

1. The purchasing department verifies the purchase request and operations begin.

2. The purchasing department pre-determines suppliers that can provide the requested goods. Supplier evaluation ranking is used at this step.
3. The purchasing department notifies the supplier of the order. Negotiation with the supplier takes place at this step.
4. The purchasing department tracks orders. Possible delays are notified to the relevant department. If there are changes in quantity, etc. related to the order, the supplier is informed.
5. Products coming from suppliers are delivered after being checked for quality and quantity. If the incoming goods do not meet the desired conditions, they are returned to the supplier. In any case, information is recorded in supplier evaluation files.
6. After all this, value analysis is performed by testing functions in order to reduce costs and increase performance of purchased products/materials.

Purchasing Management in Restaurants

The ordering and negotiation phase is one of the basic stages that need to be paid attention to in purchasing processes. Effective market research of the product the business will order, determining the cost-benefit ratio, and negotiations the purchasing manager of the food and beverage business will make among suppliers make this stage effective and successful. A contract application should be made for the delivery of procured products to the business, to prevent problems that may occur in the process, and to resolve disagreements between parties. Food and beverage businesses should pay attention to the contract issue. It is also an important issue that the delivery operation, which should be carried out in accordance with the matters determined in the contract and agreed upon by the parties, is performed by professional staff.

Purchasing Department and Function in Restaurants

Purchasing operations usually take place through easy methods such as placing orders with the seller by phone. This process is called informal purchasing methods. In the formal purchasing method, the transaction is carried out through advertising or by obtaining price quotes. Difficulties encountered in informal purchasing operations include limited time, insufficient number of sellers, purchases in small quantities, the perishable nature of the product, and activities taking place rapidly.

Control of the purchasing function allows food to be sold at the desired quality and at an appropriate price. In restaurant businesses, the restaurant chef is the person responsible for purchasing. Purchasing work begins with the identification of materials to be purchased. Then, issues such as the time of purchase and from which source it will be purchased are investigated, and the most suitable one for the business should be selected in terms of price and quality. A form is prepared in this process, and information such as the quantity of materials to be purchased, the quantity on hand, price, and the name of the relevant department is entered on this form.

Benefits of Purchasing Management to Restaurants

There are benefits of purchasing management. Some of these are as follows:

• Purchasing management enables restaurants to purchase their materials and services at appropriate costs. Costs are reduced and profitability is increased through strategies such as negotiations with suppliers, wholesale purchasing, and discount agreements.

• Good purchasing management ensures restaurants procure quality and fresh products. By collaborating with well-selected suppliers, restaurants can obtain high-quality materials at competitive prices. The use of fresh products increases the taste of dishes and customer satisfaction.
• Purchasing management enables restaurants to effectively manage their supply chain. Factors such as on-time delivery of materials, optimization of stock levels, and efficient inventory management increase operational efficiency and help meet customer demands.
• Good purchasing management enables restaurants to build strong relationships with their suppliers. Long-term and mutually beneficial collaborations enable suppliers to provide priority service to restaurants. At the same time, choosing suppliers that provide quality service to their customers increases the reputation of restaurants.
• Purchasing management provides restaurants with the opportunity to manage risks in the supply chain and material procurement. Finding alternative suppliers and responding quickly in crisis situations ensures business continuity. Additionally, auditing suppliers and implementing certification processes to reduce risks related to material quality or safety is also important.
• Purchasing management enables restaurants to optimize business processes to increase their efficiency. Improvements are made in processes using tools such as demand forecasting, inventory management, and automatic ordering processes.

Determining Purchase Quantity in Restaurants

At the stage of determining purchase quantity, two types of costs that businesses face stand out. The first of these is inventory carrying cost. Increasing order quantity also increases inventory carrying costs within the business. The second is ordering cost. The labor used in the ordering stage and additional fees paid to suppliers per order are included in this cost element. There are various methods that can be used by food and beverage businesses and units to determine purchase quantity. Some of these are as follows:

• Fixed Order Quantity Method: When the stocks owned by the business fall to a certain level, a pre-determined quantity of order is requested to minimize total inventory cost. In businesses where this model is applied, an order quantity, order level, and safety stock that will minimize inventory cost are calculated. This method is particularly applied in businesses where demand quantity is known and demand rate is constant. Restaurants also use this ordering method for products with certain demand and that are highly preferred.

• Economic Order Quantity Management: It is used to determine the order quantity that will reduce all variable costs of stocks to the lowest level. This method considers the costs of ordering in high and low quantities and determines the most appropriate point between these two extremes. Restaurant businesses reduce their costs by ordering more in high-selling products, and reduce stock and ordering costs by ordering when demand comes for less demanded or more expensive products.
• Order as Needed Model: In this method, which is generally preferred for high-cost and expensive products, when the need for procurement arises in a certain period, an order is placed for the quantity demanded. In this method where orders are placed as needed, there is no inventory cost. In cases where the number of orders increases, the increase in ordering costs and the possibility of price changes creating negative effects are issues that need to be considered when the business demands products. Restaurants reduce their ordering and inventory costs by using this method, especially for high-cost products such as caviar.
• Periodic Order Model: It is an ordering method that continues at periodic intervals by determining the economic order quantity. The essence of this method is to calculate how much order will be placed in which periods. The periodic order model is frequently used to balance ordering costs that rise in certain periods. Ordering food and beverage products in certain periods includes benefits such as spreading costs throughout the year and using products that come in low periods instead of purchasing when product prices are high.
• Lowest Unit Cost Model: The purpose of this model is to bring the cost per unit to the minimum level. The criterion for decision in this method is the lowest cost per unit. First, it is estimated what the unit cost will be when ordering the quantity needed during the period. Then, the unit cost is recalculated by adding the net needs of future periods to the order quantity. In this method, this process continues as long as the rate of decrease in unit cost continues.

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