Do You Value What You Buy?

Buying is a highly specialized job. Not just anyone can do it, many try.

Today's foodservice buyer must know not only a lot about the products he purchases, be he must know the commodity markets, bid procedures, negotiating techniques, how proteins are processed, and the seasonal availability of all products (determines price and quality).

The job involves planning, forecasting, organizing, and a good buyer never stop learning, always seeking to understand menu applications and to update knowledge.  The lost technique of value analysis can improve product selection and bottom-line profits.

The idea is to precisely define menu and purchasing needs and buy products that best satisfy them. Value is based on quality and price and is often expressed in a business formula dating back to when I started in foodservice. (fresh dino wings were my favorite, usually spec'd the 14DN Choice Avisaurus!) 

It's Your Money - Here's the Formula!

V = Q/P. If the price (P) increases but quality (Q) doesn’t, value (V) is less. Of course, if Q increases but P does not, then V increases. The idea is that it’s important to judge value and you can’t do that if you don’t recognize value. You can learn to judge value by keeping records, checking the dumpster, talking to waite staff and of course consulting with the operations and culinary group.

Value analysis can be product yield or case pack weight; for example, maybe you are not selling enough chili to warrant buying a #10 can, which means changing to a #303 at a slightly higher price, represents a better value.

Do you always require #1 tomatoes for back of the house prep/recipe items?   Are you paying off your juice machine, custard maker, waffle irons, roll-towels dispensers and coffee equipment by adding to the price of the product? Do the math and you may find a one-time capitol investment in equipment makes more sense.

Our consulting work with the non-appropriate funds military group in San Antonio proved there is a distinct savings advantage on protein buying to eliminate bulk, weight, and waste in bulk purchases. We moved from carcass and wholesale beef cuts (sub-primal) to boneless, well-trimmed meat,  separated to meet specific cooking needs.

The lost art of using value analysis and technical purchasing can improve product selections and back-of-the house efficiency.  It’s true that the process can really occupy more time than –operations or culinary staff can devout,  That’s why you should value the products you buy and allow your buyer or purchasing staff the time to bring a systematic approach to your business. 

Higher Profits!                                                                                                                                                                  Fred

Fred Favole is Founder & President of Strategic Purchasing Services, a firm specializing in purchasing outsourcing, distribution system bids and strategic product sourcing and development.  He can be reached at: P: 912.634.0030, email: favole@gate.net or connect on LinkedIN