Restaurant Purchasing and Quality Standards
The Importance of Quality Standards
One of the most important responsibilities that restaurant purchasers have is to ensure that the operation is obtaining the proper quality of products and services. This can’t be overstated.
In our experience, one of the best ways to accomplish this goal, day in and day out, is to keep open lines of communication with vendors and be very clear about the quality standards of the restaurant.
Vendors offer products and services at a variety of quality levels at corresponding price levels. A common misconception that we see regularly at Dine Market is that the lowest price trumps all other concerns. This isn’t the right way to look at the relationship between price and quality.
First, a foodservice operation needs to establish quality standards for every product and service required. Only then can competitive pricing be applied. Successful purchasing revolves around finding the best price, for the required quality, of a product or service.
Quality – “You know it when you see it”
The concept of quality can be hard to define. We regularly hear people say that although they can’t exactly explain what quality is, they "know it when they see it."
That’s fine in some situations but a restaurant operation isn’t one of them. Every day, each product purchase at a restaurant needs to be based on tangible and well-defined quality requirements.
In food service, quality is the relationship between the intended use of a product and its value to the operation. In order to define these factors, first the buyer needs to define what the product will be used for, only then can the proper quality and price be decided based on that use.
The Importance of Quality
We’ve been discussing quality in the context of the products that are purchased by a restaurant. Just as importantly, an organizational definition of quality needs to be created and shared to all team members. This is one of the hallmarks of a successful food service operation.
In the same way that a restaurant buyer demands quality from their vendors, customers demand quality from the restaurants that they patronize. Again, quality is:
The consistent delivery of products and services according to expected standards.
Those standards may be vastly different between a Michelin-starred fine dining establishment and a fast food restaurant, but the products and services provided by each should be based on an established set of standards. This is known as quality assurance.
Quality assurance refers to all activities that an organization uses to attain quality and encompasses every interaction, both FOH and BOH, that can affect it.
The quality assurance activities that relate to purchasing include:
One way to accomplish quality assurance is to establish an organization-wide commitment to total quality management. Here, an emphasis is placed on continually improving the processes and procedures that help the restaurant consistently meet quality requirements.
Quality standards identify and communicate required product characteristics and specifications to staff and vendors. These standards are unique to the restaurant or brand and are developed based on the operation’s concept, location, customers, and competition.
Quality standards should be written down and shared organization-wide. For many restaurants, they become the “mission statement” of the organization. Writing quality standards down and posting them has many benefits including:
Determining Quality Standards
Many foodservice organizations avoid establishing quality standards for the simple reason that determining and writing accurate quality standards is a complex and time consuming task.
There are several ways to streamline the process, including using industry and government publications that have been created for this very reason.
Examples of existing quality standard documentation include:
American Cutlery Manufacturers Association
American Seafood Distributors Association
Foodservice Equipment Distributors Association
National Livestock and Meat Board
National Pasta Association
National Poultry & Food Distributors Association
US Department of Agriculture
US Department of Commerce
Wine & Spirits Wholesalers of America
Most product types have an association or industry group attached to them and information is readily available online.
Defining Quality using Product Specifications
Product specs are an important communications tool. They help ensure that managers, staff, purchasers, and vendors all have the same understanding about quality needs.
Requirements for product specifications:
Product specs are used during both purchasing and receiving and well defined and communicated specs help to both streamline and enforce quality control during both procedures.
During purchasing, product specs allow buyers to compare product prices across several vendors and make it easier to evaluate prices based on common quality definitions. This is vastly more important than simply looking for the lowest price for a product or service.
Every specification for a product should at the very least include:
This is the minimum amount of information required to correctly identify and order based on complete product specifications.
In some ways adhering to product specifications during receiving is more important than during purchasing. Why? Because receiving is where a large number of costly mistakes are commonly made.
It makes no sense to spend the time developing well-defined product specs and adhering to them during the purchasing process if orders are accepted without checking against the very same specs that were used during ordering.
The basic truth is that restaurants will pay for the products ordered, regardless of whether or not the products that are delivered are of the same quality.
A simple way to ensure that products received exactly match the products ordered is to properly train receiving staff on quality standards and giving them the tools to correctly identify them during delivery.
The Role of Vendors during Purchasing
The value in creating strong relationships with vendors is paramount, especially as it relates to maintaining strict quality standards. Your vendors are (or should be) absolute experts in the products that they sell and are a valuable resource during the creation of product specs.
Clear communication with vendors (ideally including the sharing of product specifications) can also greatly minimize errors made during ordering and receiving.
The purchaser’s job is to tell the vendor exactly what products are needed and the vendor’s job is to deliver those products and effectively communicate other options if the order cannot be fulfilled as promised.
When communicating product specification to vendors we can build on the earlier list in several ways:
1. Product name as used by vendor – this is important. Some products have multiple names and every product should be verified with the vendor before purchase if there are any potential alternatives. This is especially important when ordering produce and seafood as the same products can have many different commonly used names.
2. Intended use of product – the intended use describes how a product is meant to be used, prepared, and consumed. Vendors can be very helpful in defining quality requirements in this regard.
3. Packaging – packaging is often an afterthought for many purchasers but should always be considered. Highly perishable items must be packaged in a way that they are protected from contamination, moisture, loss of visual appeal, and crushing.
4. Purchase Unit Size – specifications should always include either the required size (exact weight measurements) or proper weight ranges.
5. Grade – poultry, eggs, and beef all have USDA grades, as do many other products. It is vitally important that the desired product grade is clearly communicated to vendors.
6. Market Form – although market form is pretty straightforward and usually very obvious it should also be verified before an order is placed. Fresh, frozen, and canned are common market forms.
Market form can also address preservation needs – vacuum packaging with no oxygen in the packaging can prolong shelf life and individually quick frozen (IQF) items, especially seafood, maintain their taste, texture, and appearance better than non-IQF freezing methods.
7. Color – again, this can be fairly obvious but is an often overlooked spec. Produce may come in a wide variety of different colors as can eggs.
8. Place of Origin – restaurants have the ability to purchase products from even the most far-flung corners of the globe. Each product origin may impart different characteristics into the appearance, flavor, and texture. This is particularly important for restaurants who label menu items by location or who wish to focus on local products.
9. Acceptable Substitutes – it’s always a good idea to provide vendors with specifications that identify acceptable substitutes for the products that are being ordered. Again, this comes down to clear communications between the purchasing team and the vendor and can save time and money when a product is unavailable.
Although it may seem daunting to establish quality standards, purchasing specifications, and quality assurance procedures it’s time well spent. An overarching theme that we’ll repeat again and again is the importance of clear communication and documentation. Purchasing and receiving errors can be very expensive but can be avoided by properly communicating requirements both to all team members and also to vendors.
Purchasing is probably the class least remembered during culinary school, but has tremendous impact on the business of serving food. We all remember butchery and braising, knife skills, and even sanitation. For many chefs-in-training, the classes on purchasing are a topic to get through as quickly as possible before getting back to the kitchen.
That’s understandable but unfortunate, because in many ways, purchasing is the single most important job responsibility in the restaurant industry.
Even the best chef, with the most the incredible talent, will fail at the business of running a successful restaurant if purchasing isn’t done systematically, and diligently, and as a team.
We’re going to use the standardized definition of purchasing which is:
Purchasing is the entire process of selecting, buying, and evaluating the products and services needed by a restaurant or foodservice operation. The purchasing process begins when needs are determined and ends after the products are used or contracted services are provided.
The most important take-away from the definition is that purchasing is much more than placing an order for food products from a vendor.
Purchasing is a cyclical system that starts with determining needs, and ends when products are consumed or used.
In a very real sense the purchasing cycle never truly ends, at least as long as a restaurant is in business, because the cycle starts again as soon as a week or month’s product needs are determined and existing product stock is depleted.
Some purchasing activities are undertaken seasonally or monthly, including determining what types of products are needed for a menu and determining the necessary quality requirements. Many other activities occur more frequently, such as determining purchase quantities or service requirements, placing orders, and paying vendors.
The Objectives of Effective Purchasing
Purchasing objectives are the driver behind every decision that a purchasing team makes in order to return on investment (ROI). Regardless of who does the actual ordering, every team member with purchasing responsibility should be involved in determining the operation’s specific needs for products and services as well as in identifying the best sources for products.
In addition, all team members should be involved in assessing the different ways that the use of technology can improve different stages of the purchasing process.
Purchasing objectives drive the daily activities of the purchasing team, including:
The Impacts of Effective Purchasing
Perhaps more than any other aspect of the foodservice operation, purchasing has a direct impact on a restaurant’s success. The most important responsibilities of the purchasing team include maintaining adequate product quantities, maintaining quality standards, and minimizing costs.
Maintaining Adequate Quantities
It’s vitally important to ensure that an adequate supply of all necessary products is available to prepare every menu item. There are several different ways that managers and purchasing team members do this including analyzing Point of Sale (POS) information and sales histories to correctly forecast the number of portions needed.
Forecasting can be made even more accurate by looking at additional information including seasonality, holidays, and greater or lower amounts of foot traffic in the neighborhood or city over specific time periods or months.
We all know what happens then adequate inventories aren’t maintained, and it isn’t pretty. Product shortages can turn an amazingly busy weekend service into a nightmare. Just as importantly, failure to maintain quality standards can result in purchasing products that don’t meet customer expectations, and in some ways that’s even worse.
Maintaining Quality Standards
Every single item produced by a foodservice operation must meet the quality standards that have been developed for it. Ensuring consistent quality begins when purchasers develop reasonable quality standards and continues by communicating these standards to vendors and vigilantly checking product quality during the receiving process.
That’s important enough to repeat.
Quality standards may be set by the chef, manager, or owner of a restaurant but need to be clearly communicated to every member of the purchasing team, especially those doing the receiving from vendors and suppliers.
For obvious reasons food costs and cash flow are extremely important to the success of a foodservice operation.
Many new purchasers will view finding the absolute lowest prices on products during purchase as the primary way to minimize cost but it is only one strategy, and often not the best one.
Tying up large amounts of cash for stored products that won’t produce revenue until a later date can be just as crippling as purchasing too few products to get through a busy weekend.
An effective purchasing team will use several strategies to minimize unnecessary investment in storage:
Purchasing Practices & Vendor Relationships
Purchasers are always competing with other operations for the best prices on food products. That’s quite simply the way the restaurant industry is designed.
Although simple in concept, achieving an advantage based on food costs is actually very challenging for a number of different reasons – the most important of which is based on a traditional lack of transparency in vendor pricing. It can be very difficult to know how much an operation should be paying for food products at any given time and getting product pricing from new vendors can be a time-consuming process.
Several purchasing practices can be very helpful in working with vendors:
1. Always select vendors who provide the best combination of price and services. Vendors sell much more than just products – they should be assessed based on a number of additional factors including the frequency of deliveries, flexible payment terms, low order minimums, and perhaps most importantly, consistency and dependability.
2. Make sure that every dollar spent on products is wisely spent. All purchases should be based on the concept of intended use – don’t waste money buying a product that’s of higher quality than necessary.
3. Clearly communicated diligent receiving practices to all team members to make sure that incoming products meet the operation’s quality requirements. Check every product, every time.
Basic Steps in the Purchasing Process
Step 1: Identify product needs
Step 2: Determine quality requirements
Step 3: Determine quantity to purchase
Step 4: Identify vendor sources
Step 5: Select vendors for each product order
Step 6: Order Products
Step 7: Receive and store product
Step 8: Pay for product
Step 9: Evaluate purchase process
Each of these steps is equally important, but the final step, evaluating the purchasing process, needs to happen regularly to make sure that every member of the team is working together correctly and that the process is neither too time-consuming nor inadequate to provide proper inventory.
Factors that affect Purchasing
There are many factors that impact each of the steps in the purchasing process. These can be viewed as internal factors, or those taking place within the organization, and external factors, which are those outside of the establishment.
Internal factors effecting purchasing include the skills and abilities of the purchasing team members, the accuracy of forecasting product needs, available storage for products, and timing requirements for deliveries. These are all important and should be taken into consideration.
External factors are harder to control but should be anticipated whenever possible. External factors include the changing dietary needs of customers, local competition, environmental concerns, governmental regulations, and even global trade conditions.
Ten years ago, you’d be hard-pressed to find any “gluten-free” menu options even in large cities. Fifty years ago, the idea of a “vegetarian option” at a mainstream restaurant usually meant a side salad. The culinary landscape can change very quickly and unprepared restaurants can get left behind.
The Evolution of Purchasing Systems
In some ways restaurant purchasing hasn’t changed significantly in hundreds of years. In others, the role of purchasing within a food service organization and the way that relationships with vendors are defined have evolved in a variety of ways.
Establishing healthy relationships with vendors is at the cornerstone of effective purchasing. Lines of communications should be open and a partnership needs to be established. By clearly communicating requirements and expectations on both sides, the relationship can flourish and be mutually beneficial in a wide variety of ways.
Some chefs engage in what can be called price-conscious purchasing, where the main goal is to purchase products at the lowest possible price, each and every time.
This strategy may initially be good for cash flow and the business bottom line, but over time the adversarial nature of the relationships, and the potential loss of quality products, can remove any benefits very quickly.
There shouldn’t be winners and losers in a restaurant-vendor relationship, for the relationships to thrive their needs to be a mutual understanding and shared goals.
Price and quality purchasing is a philosophy that balances the cost of products and services with the quality. Purchasers are driven by value and there is a recognition that the best product for a given use may not necessarily be the least expensive.
Restaurants should also recognize the importance of information provided by vendors and understand that there are multiple responsibilities on the vendor side including product quality, information, and service.
Purchaser-vendor “partnerships” are the ideal. Successful restaurants view purchasing as having a much broader role in the organization and see how it can be a competitive advantage. Vendors are considered a resource and supplier expertise is an important consideration in choosing which vendors to work with.
There are a wide variety of considerations to make when evaluating your restaurant’s purchasing strategy, including team member responsibilities, quality standards, ordering and receiving protocols, and effective relationships with vendors.
A successful purchasing strategy is one that is streamlined, price-conscious, and systematic. Dine Market has spent years analyzing restaurant purchasing and vendor relationships to create an simple and intuitive platform and wholesale marketplace to take the hassle out of ordering so that you can focus on your food.
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