Unless you’re starting a business from scratch today, or are lucky enough have such low staff turnover levels that everyone has been with you since day one, at some point new hands have to come into the business and pick up vital tasks such as purchasing and ordering.
As soon as they ask “where do we order fruit and veg from?”, “who supplies our steaks” or even “which light bulbs do we buy?”, the danger sets in – good purchasing practice gives way to tradition. Lynx Purchasing’s new insight guide, ‘The Seven Habits of Highly Effective Purchasing Teams’, details seven proven ways that businesses can make simple improvements to their buying, and the sixth habit encourages us all to ‘Test Traditions’.
Just like habits, there are good traditions and bad ones. Never examining the ‘whats’ and the ‘whys’ of every tradition and accepted practice in your business is a step away from complacency.
In many organisations, especially with higher than average staff turnover – a perennial problem for the hospitality sector – accepted practices roll on from one employee to the next with no questions asked. In one form or another, “this is the way it’s done because we have always done it this way” is the mantra we hear from operators we speak to time and again.
Simply doing things ‘this way’ could be costing your business a fortune – and often is. Observe your staff and listen to their conversations and you’ll be amazed how many instances of accepted practices you’ll come across on an day.
For example, many restaurants and hotels insist on deliveries six days a week, between 8am and 10am, and with the ability to order up to midnight for next day delivery, and will only consider suppliers who offer these services. This is not free. In fact it comes at a premium price that’s built into the final cost to the business. So do you need it? Really?
As an example, we worked with a medium-sized chain of pubs which used a fruit and veg supplier and a butcher delivering six times a week. Every drop was low value – the pubs were small and weekly orders were divided into six – so a minimum delivery premium was being added to every drop, which is standard practice for most suppliers.
Analysing their ordering patterns, it became clear that three deliveries a week would be enough. We negotiated a fantastic deal with both suppliers who offered better rates and cut the minimum drop charges, saving the customer many thousands of pounds.
Another bar group insisted on midnight ordering and daily deliveries from their butcher because they ‘never knew if they’d run out of steaks’. They also never knew they were paying a fortune for the privilege. We helped the chef improve planning, cut deliveries and order earlier, saving thousands of pounds.
Action: Not all traditions are worth keeping, so challenge them and encourage staff to think about how savings could be made by doing things differently.
One tradition to definitely test is poor management of margins. The FREE Lynx Purchasing GP App for Apple and Android devices makes calculating menu costs simple – for details, go to www.lynxpurchasing.co.uk/purchasing-expertise/gp-calculator-app/
You can download a free copy of the Seven Habits of Highly Effective Purchasing Teams from our website at https://www.lynxpurchasing.co.uk/resources/seven-habits-highly-effective-purchasing-teams/. We’ll also be looking at the fourth effective habit, ‘all budgets are equal’, in our next blog.
If you want to find out more about how you can tap into the experience and expertise of the Lynx team to help you make the most of the Seven Habits of Highly Effective Purchasing Teams, email us at savings@lynxpurchasing.co.uk or call 01325 710143.
