When you are out and around When you are out and around town town

this week, take notice of this week, take notice of food service delivery trucks….food service delivery trucks….

Who has the cleanest trucks?Who has the cleanest trucks?

Who has the least desirable Who has the least desirable trucks?trucks?

Define the term purchasingDefine the term purchasing Define the term selection.Define the term selection. Define the term procurement.Define the term procurement. Describe co-op buying.Describe co-op buying.

The Knowledge Within You,

Lasts For A Life Time

The Menu determines your The Menu determines your purchasing needspurchasing needs

The Standardized Recipe The Standardized Recipe determines your specific determines your specific purchasing needs.purchasing needs.

The Budget will determine your The Budget will determine your purchasing strategy. purchasing strategy.

The inventory will affect your The inventory will affect your purchasing decisions.purchasing decisions.

What Affects Your What Affects Your Purchasing Activities?Purchasing Activities?

Name the five major objectives of the Name the five major objectives of the purchasing functionpurchasing function Maintain an Adequate Supply.Maintain an Adequate Supply. Minimize Investment.Minimize Investment. Maintain Quality.Maintain Quality. Obtain the Lowest Possible EP Cost.Obtain the Lowest Possible EP Cost. Maintain the Company’s Competitive Position.Maintain the Company’s Competitive Position.

Do you think that it is a good practice to allow the Do you think that it is a good practice to allow the competition to “borrow a cup of sugar” once in a competition to “borrow a cup of sugar” once in a while?while?

Define: Value Analysis, Sourcing, Plant Visits, Stock- Define: Value Analysis, Sourcing, Plant Visits, Stock- Outs, Backdoor selling, Back OrdersOuts, Backdoor selling, Back Orders

Purchasing ObjectivesPurchasing Objectives

List 3 critical issues that should be List 3 critical issues that should be addressed in a procurement plan.addressed in a procurement plan.

Making the purchaseMaking the purchase Receiving and storing the shipmentReceiving and storing the shipment Administering the purchase contractAdministering the purchase contract

Chapter 8 – Product Chapter 8 – Product SpecificationsSpecifications

Why have Specs?Why have Specs?

Who decides what to include on Who decides what to include on the specs?the specs?

What information does a spec What information does a spec include?include?

Product SpecificationsProduct Specifications

Description of all the characteristics Description of all the characteristics in a product required to fill certain in a product required to fill certain production and / or service needs.production and / or service needs.

Use the USDA, vendors and industry Use the USDA, vendors and industry sources to develop complete sources to develop complete specifications.specifications.

Advantages to SpecsAdvantages to Specs

They serve as quality and cost control They serve as quality and cost control standards.standards.

Help to avoid misunderstandings between Help to avoid misunderstandings between buyers, suppliers, users and other company buyers, suppliers, users and other company officials.officials.

They allow someone else to fill in They allow someone else to fill in temporarily.temporarily.

They serve as useful training devices.They serve as useful training devices. They aid in the bidding process to level the They aid in the bidding process to level the

playing field.playing field.

Who Is Involved With Who Is Involved With Specs?Specs?

The owner / manager or some other The owner / manager or some other top official.top official.

The buyer.The buyer. The end userThe end user Some combination of the above.Some combination of the above.

What Information Does a What Information Does a Spec Include?Spec Include?

The spec may include any or all of the The spec may include any or all of the following:following: Performance requirementPerformance requirement Exact nameExact name The packer’s brand nameThe packer’s brand name US Quality Grade (if appropriate)US Quality Grade (if appropriate) Size InformationSize Information Acceptable Trim or Acceptable WasteAcceptable Trim or Acceptable Waste Package SizePackage Size Type of PackageType of Package Preservation and /or Processing MethodPreservation and /or Processing Method Point of OriginPoint of Origin Packaging ProcedurePackaging Procedure

More Spec More Spec Information….Information….

Degree of RipenessDegree of Ripeness FormForm ColorColor Trade Association StandardsTrade Association Standards Approved SubstitutionsApproved Substitutions Expiration DatesExpiration Dates Chemical StandardsChemical Standards Test or Inspection proceduresTest or Inspection procedures Cost and quantity LimitationsCost and quantity Limitations General InstructionsGeneral Instructions Specifics instructions to biddersSpecifics instructions to bidders

What Influences Types of What Influences Types of Information Included on Information Included on

the Spec?the Spec? Company Goals and PoliciesCompany Goals and Policies The time and money availableThe time and money available Production Systems the Hospitality Production Systems the Hospitality

Operation UsesOperation Uses Storage facilitiesStorage facilities Employee Skill LevelsEmployee Skill Levels Menu RequirementsMenu Requirements Sales prices or budgetary limitationsSales prices or budgetary limitations Service StylesService Styles

Potential Problems With Potential Problems With SpecsSpecs

Additional considerations that add to Additional considerations that add to cost but not value. cost but not value.

The specification is too rigid and The specification is too rigid and does not allow for periodic revision.does not allow for periodic revision.

All personnel should understand the All personnel should understand the specs and use them appropriately.specs and use them appropriately.

Even more problems arise with “bid Even more problems arise with “bid buying”….buying”….

Bid Buying PotholesBid Buying Potholes

Getting hit with the “lowball”Getting hit with the “lowball” Inequality among bidders.Inequality among bidders. Specifications are too tight.Specifications are too tight. Advertising your own mistakesAdvertising your own mistakes Redundant favoritismRedundant favoritism Scheduling several deliveriesScheduling several deliveries

Packer’s BrandsPacker’s Brands Food Producers use their own brand names.Food Producers use their own brand names. Within Packer’s Brand name exists various Within Packer’s Brand name exists various

levels of qualitylevels of quality Specific quality indicators – usually good, Specific quality indicators – usually good,

better and best.better and best. Sysco ImperialSysco Imperial Sysco ClassicSysco Classic Sysco RelianceSysco Reliance

Packer Brands that you think are Name Packer Brands that you think are Name BrandsBrands ArrezioArrezio Block n BarrelBlock n Barrel Wholesome FarmsWholesome Farms

Fresh Produce Fresh Produce PurchasingPurchasing

Inherent DifficultiesInherent Difficulties Soil and climate conditions can effect Soil and climate conditions can effect

qualityquality Seasonal changes, natural or manmade Seasonal changes, natural or manmade

disasters and changes in demand can disasters and changes in demand can effect quality.effect quality.

Quality is subjective – What looks good to Quality is subjective – What looks good to your supplier may not look good to you.your supplier may not look good to you.

Seasonal availability offersSeasonal availability offersBest price, best quality and best selectionBest price, best quality and best selection

Selection FactorsSelection Factors Intended Use – get the right product for Intended Use – get the right product for

your application.your application. Exact Name – understand the Exact Name – understand the

terminology and varieties even within terminology and varieties even within groups - Super Sweet Jubilee Corn, groups - Super Sweet Jubilee Corn, Russet Burbank Potatoes.Russet Burbank Potatoes.

Government Inspection and GradesGovernment Inspection and Grades Fancy – Top quality – about 1% of all Fancy – Top quality – about 1% of all

produce.produce. No. 1 - Majority of items producedNo. 1 - Majority of items produced CommercialCommercial No. 2, No. 3 and Field RunNo. 2, No. 3 and Field Run

Selection FactorsSelection Factors Packers’ Brands - particular brand or packing Packers’ Brands - particular brand or packing

process – Andy Boy Lettuce, Bolthouse Carrots.process – Andy Boy Lettuce, Bolthouse Carrots. Product Size – 4X5 tomatoes vs. 5X5 tomatoesProduct Size – 4X5 tomatoes vs. 5X5 tomatoes Size of Container – Breaking casesSize of Container – Breaking cases Type of packaging material – adds or lessens costType of packaging material – adds or lessens cost Packaging Procedure – Packaging Procedure – Minimum weight per case – Lettuce yields.Minimum weight per case – Lettuce yields. Product YieldProduct Yield Point of Origin – Idaho potatoes, Florida orangesPoint of Origin – Idaho potatoes, Florida oranges

Selection FactorsSelection Factors

Color – Color – Product Form – Raw material or value added.Product Form – Raw material or value added.

Onions vs. Diced ¼” onionsOnions vs. Diced ¼” onions Degree of Ripeness – shelf lifeDegree of Ripeness – shelf life

Avocadoes, Bananas and TomatoesAvocadoes, Bananas and Tomatoes Ripening process used – Natural or GasRipening process used – Natural or Gas Preservation Method – Effect of time and Preservation Method – Effect of time and

temperature on quality.temperature on quality. Trusting the Supplier – One stop shop or bid Trusting the Supplier – One stop shop or bid

process.process.

Receiving Fresh ProduceReceiving Fresh Produce

Inspect delivery for completeness.Inspect delivery for completeness.Conduct a visual inspection of the Conduct a visual inspection of the condition of the shipping cartons.condition of the shipping cartons.

Conduct a visual inspection of items of Conduct a visual inspection of items of lower layers.lower layers.

Weigh cartons if necessary.Weigh cartons if necessary.Randomly sample for count, size and Randomly sample for count, size and quality.quality.

Check invoice to be sure pricing is Check invoice to be sure pricing is accurate.accurate.

Help to promote efficient Help to promote efficient scheduling.scheduling.

Plan weekly expenses.Plan weekly expenses. Develop supplier relationships.Develop supplier relationships. Understand lead times for different Understand lead times for different

vendors.vendors.

Order SchedulesOrder Schedules

Security ProblemsSecurity Problems

1.1. KickbacksKickbacks

2.2. Invoice ScamsInvoice Scams

3.3. Supplier and Receiving ErrorSupplier and Receiving Error

4.4. Inventory TheftInventory Theft

5.5. Inventory PaddingInventory Padding

6.6. Inventory SubstitutionsInventory Substitutions

7.7. Segregating Operating ActivitiesSegregating Operating Activities

Security In Inventory Security In Inventory FunctionFunction

Select honest suppliersSelect honest suppliers

Research suppliersResearch suppliers Employ honest employeesEmploy honest employees

Prosecute dishonest employeesProsecute dishonest employees Design facilities so that tight, effective Design facilities so that tight, effective

security conditions can be maintainedsecurity conditions can be maintained

Set-up a system that has checks Set-up a system that has checks and balancesand balances

Preventing Security Preventing Security ProblemsProblems

ORDER SCHEDULE

TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY MONDAY

Produce Produce Produce Produce Produce Produce

Sysco Sysco

Edward Don Edward Don

Spice

RECEIVER SCHEDULE

TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY MONDAY

Produce Produce Produce Produce Produce Produce

Sysco Spice Sysco

Edward Don Edward Don

Dairy Coffee Dairy

Knife Service (every other)

Aramark Aramark

PRODUCE ORDER MGR DATE MGR DATE

PARS UPDATED CHECK DAILY08/30/2004 ORDER DAY ON ON Produce UNIT MN/TS WD/TH FR/ST HAND ORD HAND ORD

Avocado (4ea) / pac PAC 2.00 3.00 4.00 1.00 ? 1.50 ?

Cucumbers (12EA) / cs CS 1.20 1.80 2.00

Kale (24ct) / cs CS 1.50 2.00 2.50 1.00 ? 2.50 ?

Lettuce- Iceburg CS 1.80 2.00 2.50

Lettuce- Romaine CS 2.00 2.50 3.00

Pepper- Green Bell Large (25LB CASE) CS 0.50 0.75 1.00

Pepper Red (5 Pound ) / bag BAG 1.50 2.00 2.50 0.50 ? 0.75 ?

Pepper Jalepeno (POUND) LB 1.00 1.00 1.50

Parsley- Case 60ct / cs CS 0.50 0.75 1.00 1.00 ? 0.25 ?

Cilantro - (3ea) / pac PAC 0.75 1.00 1.00 1.00 ? 0.75 ?

Onion- Green Iceless CS 2.00 2.50 3.00

Mushrooms Silver Dollar (10lb) CS 2.00 2.50 3.50

Garlic- Whole Husk - check freezer CS A/N A/N A/N

Garlic- Whole Pealed (4/5lb) / gal GAL 2.00 3.00 5.00 0.75 ? 2.25 ?

Lemons Fancy 200ct / cs CS 2.50 3.00 5.00

Tomato- 6x6 Bulk (25lb) CS 1.50 2.50 3.50

Limes 200 CT (40lb) CS 0.75 1.50 2.00

Prep Produce

Shred- Lettuce (4-5LB) BAG 3.00 5.00 5.00

Shred- Cabbage- Red (4-5LB) BAG 3.00 4.00 5.00

Shred- Carrot (4-5LB) BAG 2.00 3.00 4.00

Diced- Onion (4-5LB) BAG 5.00 6.00 8.00

Storing Fresh ProduceStoring Fresh Produce

Arrange for delivery frequency that will Arrange for delivery frequency that will maximize quality.maximize quality.

Variability in cooler temperaturesVariability in cooler temperatures Defrost cyclesDefrost cycles Distance from the doorDistance from the door Air curtainsAir curtains

Heavy items on height appropriate shelvesHeavy items on height appropriate shelves Rotation of products – FIFO / Day dots / Rotation of products – FIFO / Day dots /

MarkingsMarkings

TRIVIATRIVIA

Net Weight – Weight of product in the packageNet Weight – Weight of product in the package Gross Weight – Weight of product and the Gross Weight – Weight of product and the

packagepackage Tare – Weight of the packaging.Tare – Weight of the packaging. Julian Dates – Date expressed as year to date day Julian Dates – Date expressed as year to date day

number. number. For example, For example,

October 14, 2004 is 04287.October 14, 2004 is 04287.Year, # of daysYear, # of days

0428704287