Few hospitality businesses would survive for long if they didn’t keep a very close eye on the money going into the till – or electronic payment device – front-of-house.
Yet, it’s surprising how many pay little or no attention to what is coming into the business via the back door route, in terms of deliveries from suppliers.
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 third habit can be easily summed up as ‘The Devil’s in the Detail.’
There have been high profile cases where operators have been caught out by either deliberate fraud somewhere in the supply chain, such as the horsemeat scandal in 2013. Poorly-managed supplier systems can also lead to problems, such as cases of use-by dates being changed.
For most hospitality businesses, though, the biggest danger come from their own complacency. Sadly, this complacency often breeds contempt, and unless the business maintains good housekeeping practices, even the most trusted suppliers can be tempted to get creative.
To ensure that the business gets not only what it needs, but also what it has paid for, there need to be systems in place, as well as people whose job it is to implement those systems and deal with the details.
- Who checks supplier price lists against invoices to make sure the business hasn’t been overcharged? Prices change all the time, especially for fresh produce, and suppliers are often quicker to implement new pricing in an invoice than they are to make sure every customer is ordering from most up-to-date price list.
- Who counts and weighs products coming in at the kitchen door? It makes sense to check that 6kg of tomatoes isn’t 5.5kg, a case of 63 lemons isn’t 10 short, and products such as cauliflowers and peppers aren’t undersized. Make sure your suppliers know that you check deliveries, too – it helps them to focus on accuracy when picking and packing orders.
It’s also worth ensuring that you purchase the most cost effective case or pack size for your business; and always analyse gross versus net pricing when it comes to meat and fish. For example, one Lynx Purchasing customer, the executive chef of a gastropub, asked for a review of cocktail prawns. We looked at six options with different prices and ice glazes. Once defrosted and re-weighed, we found that the most expensive pack was actually the best value per portion size.
With meat, an average 2.5kg leg of lamb with bone is approximately £8 per kg, so costs £20. But with 30% being bone, you get only 1.75kg of meat, so the actual cost of the lamb is £11.43 per kg. A trimmed striploin (larder yield) is 80% of a whole one, so the price of £16.50 per kg becomes £20.63 when a 6kg whole sirloin has been prepped down to 4.8kg.
The detail of controlling costs also includes taking maximum advantage of seasonality – soft fruits in winter taste of nothing and cost a fortune. Not being led by fashion is also important, as suppliers will usually charge more for on-trend product.
There also needs to be structured menu planning and costing – with an appropriate staff member put in charge. 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/
ACTION: Good housekeeping takes time but it’s a good habit that pays dividends over time. Now is a good time to review your systems and processes to improve visibility and cost controls.
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 firstname.lastname@example.org or call 01325 710143.