As is common knowledge in business, transaction costs are expenses incurred when buying or selling goods or services. These are associated with the work required to bring goods or services to market. Irrespective of the size of business every hotel must choose between “make or buy”. This means they must decide to produce the goods and services that they offer themselves or not.
Tag: purchasing power
The world generates a whopping 3.5 million tons of plastic and other solid wastes each day, and reducing that number is a primary part of protecting the environment. However, when it comes to heavy contributors, many hotels remain guilty of producing massive amounts of waste each year that can contribute to global warming and other environmental issues. For that reason, reducing waste within your hotel establishment is of utmost importance – whether it be related to food waste or other materials.
A purchasing audit provides managers insight into the processes used to order products, highlights what products are purchased, displays the selection criteria used for each product and vendor, and outlines the procedures followed at each step. In the fast-moving hospitality industry where most produce consumed is externally sourced, such audits allow for a review of vendors, products, costs, quality and wastage.
In the catering industry, you know there are many different expenses that can quickly cut into your budget. While there are some corners you should never cut, there are a few tips we can offer that should help with lowering food costs and add some breathing room to your budget. Continue reading today’s post to learn more about restaurant food costs and getting the most from your catering budget.
At Source1 Purchasing, we can offer the tools you need to propel your catering business to the next level. Contact us today to learn more about the benefits we offer, including access, control, and visibility. We look forward to being your dedicated procurement service company.
1. Track Food Prices
In the catering industry, you know that food prices are constantly shifting. It’s important to keep an eye on any increases or decreases as these could potentially have a dramatic impact on your overall food-purchasing costs. Tracking food prices will allow you to plan ahead with any necessary menu changes so that you can include more affordable options. If you choose to continue to use the same ingredients, then be sure to adjust the cost of your services accordingly.
2. Streamline Inventory
Obviously there’s only so low you can go with inventory, but if you find that you regularly have more food on your shelves than you actually need, then it’s time to streamline your process. Reducing excess inventory is a critical step to lowering the amount of food that is wasted or spoiled. Additionally, make sure that you establish a daily inventory for key items in your catering business. It’s important to identify any gap between the actual usage and any point-of-sale usage, as this could indicate over portioning, theft, or another problem.
3. Monitor Trash Cans
At first glance, this tip might seem a little odd, but it could be one of the most invaluable tips for your catering business. Consider your kitchen area and the placement of trash cans. From training gaps and careless individuals to accidents and more, there are a variety of reasons why perfectly good food could accidentally end up in a trash can. When this happens, you are literally throwing away usable, and sometimes expensive, products. One option is to place clear plastic food boxes near each employee’s workstation so that the contents can be inspected at the end of each shift. If usable product is found in the bin, you can use that time for on-the-spot training and avoid losses, which directly impact your budget.
4. Utilize a Procurement Service Company
A group purchasing organization (GPO) can dramatically increase your purchasing power by utilizing their contacts to access the supplies you need. At Source1 Purchasing, we are proud to be the leading GPO, with more than $9.5 billion in purchasing power and contractual relationships with more than 1,000 suppliers. If you would like to achieve your goals while maintaining alignment with your brand standards, then contact us today to learn how we can help you control quality standards and strengthen your supplier networks. Contact us today to obtain your free supply chain analysis!
A smooth procurement system is essential to the operations of your company. When your procurement system runs seamlessly, you probably don’t even notice it, but when mistakes happen, nearly every aspect of your business can come grinding to a halt. To help you avoid this situation, we’ve gathered a list of the most common procurement mistakes made in procurement services.
At Source1 Purchasing, we help you enhance your purchasing power by giving you the control you need over products, contracts, and services you need to protect your brand standard. Contact our procurement services company today for a free supply-chain analysis and propel your business to the next level with Source1 Purchasing.
1. Spending Over Your Budget
Since most businesses work diligently to ensure that they stay within their budget, this is not a mistake that you might expect your own business to make. If your organization is observing an overspend, and can’t find the immediate answer, then it’s likely that you need to more closely observe your communication and coordination protocols, as a gap in one of these two areas is probably the source of your financial leak.
2. Rushing Orders
Typically, rushing a purchase order is more common in a new business. Established businesses, however, can also make this mistake if their procurement department is newly organized. One way that you can prevent anymore rush orders from happening is to work with a procurement service company like Source1 Purchasing. We have the experience and knowledge to help you get what you need in a timely manner.
3. Reinventing the Wheel
While there are many different programs that you can use to manage your supply chain, it’s important to make sure that your system is organized, efficient, and clearly communicates with everyone involved. Source1 Purchasing can offer you the dedicated team of professionals you need to enhance your purchasing power, control your orders, and increase your visibility to track your program performance.
4. Omitting Key Parties
When you make decisions that affect multiple parties or departments, it’s critical to make sure that everyone is looped into the conversation. While omitting someone is likely an accident, it can cause some major hangups in the overall flow of your procurement system. Try to remember that over-communicating is almost always better than under-communicating. Ask for feedback, verify the items on the order are accurate, and communicate all options before submitting orders.
5. Being Inflexible
Even in the most well-oiled machines, mistakes can happen, which means that you need to have alternative plans in place. Whether the items you need aren’t ready at the time you place your order or they arrive damaged, your willingness to be flexible and find other means of obtaining these necessities can help to ensure that you meet your own production deadlines.
At Source1 Purchasing, we are proud to be a leading group purchasing organization (GPO) with more than $7 billion in purchasing power. We can provide you with a free supply-chain analysis, and show you how we can help you provide the services your clients demand at a savings that your business will love. Contact us today.
The hospitality industry is always changing as it seeks to meet the needs of its customers. In this example, change is a good thing, but it can also bring added expenses. While you are likely working on ways to balance the needs of your customers with changing finances, it’s important to find ways to continually improve supply-chain costs. In today’s post, we’ll share the five steps you should follow to effectively manage your supply-chain costs.
At Source1 Purchasing, we offer great products at great prices, which means that you can optimize your supply chain, increase your purchasing power, and boost profits. If you are interested in learning more about what we can do for you, then please call today to get a free savings analysis.
1. Maintain Quality Customer Service
As a hospitality professional, you already know that it’s important to offer customers what they want while avoiding products or services they don’t. The danger of adding items that your customers don’t want could result in increased supply-chain costs for you. Likewise, eliminating a service they expect could also have negative impacts on your business.
For example, if the restaurant in your hotel offers filet mignon year-round, then it’s important to be sure that you’re tracking the annual changes in cost for that item. By planning for the months when the cost of the meat is higher, you can make the necessary adjustments to alleviate any increase in spending. You could place a larger order while the costs are lower, adjust the pricing on your menu, or vary the size of the portion serving. By honoring your commitment to offer filet mignon year-round, you will keep your customers happy, while adjusting your procurement orders will keep your bottom line happy.
2. Utilize Proper Sourcing
Procurement is the act of purchasing goods and services at the best possible prices at the right time. At Source1 Purchasing, we offer access to our team of procurement experts, visibility to leverage purchasing data, and control over the products, contracts, and services you need. We care about your brand’s standard, which is why our services start with a free supply-chain analysis, so that we can offer you the insight you need to make the best decisions for your business. Proper sourcing is critical to the success of managing your supply-chain costs, which is why you can trust us to provide you with cost- and time-saving opportunities.
3. Evaluate Total Cost of Ownership
The total cost of ownership (TCO) refers to not only the purchase price of an item, but also the total cost of operation over the lifetime of that item. This means that you need a hotel procurement company that can carefully compare the original amount of the item with the long-term costs. To fully evaluate the TCO, it’s important to consider the following items:
- Preparation time
- Customer expectations
A thorough evaluation of these categories should help you to make a decision about which product offers the lowest TCO. At Source1 Purchasing, you can trust our team to make decisions that will provide the greatest value for your supply-chain costs.
4. Minimize Product Handling
Working in the hospitality industry requires you to provide reliable services for each of your customers. The farther away that your suppliers are from your customers, however, the less reliable your supply-chain network is. Whether you need to source particular towels, soap, or bedsheets, you know that it’s crucial for you to have those products delivered as quickly as possible and in perfect condition. In order for that to happen, it is necessary to minimize product handling. The more that each order is “touched”, the greater chance there is for error and damage. When you partner with Source1 Purchasing, we can offer the ideal procurement solutions for your company. With more than 22 years in business and more than $7 billion in purchasing power, we can offer the award-winning service you deserve.
Working with a supply-chain management company is one of the best decisions you can make to better manage your procurement services costs. At Source1 Purchasing, we can help you save money, provide access to a number of assets that you need, and increase your purchasing power. By partnering with us, you can take advantage of our contractual relationships with more than 850 food and beverage suppliers and more than 250 OS&E (operating supplies and equipment) suppliers.
Source1 Purchasing is a leading Purchasing Services Organization (PSO), that provides innovative procurement-based solutions, and we work with companies that range from single-location and multi-unit operations to major corporate facilities. If you are in the hospitality industry, then we can help you improve your offerings by leveraging our purchasing power. Contact us today for a free supply-chain analysis and discover a better way to manage your supply-chain costs.
If you are in the hospitality industry and do not currently have a procurement services company, then continue reading to learn how your business can profit from working with one. Source1 Purchasing is your Top Rated Local® procurement solution whether you are in the hospitality industry, entertainment industry, or catering industry. Contact us today to start your free supply chain analysis.
The Purpose of a Procurement Service Company
Procurement serves the function of spending the profits of an organization in order to procure the goods or services that are needed to address the requirements of the business. At Source1 Purchasing, we work to provide your business with the best possible prices for the goods and services you need so that you are able to spend wisely and save as much as possible.
What Procurement Services Are Not
Contrary to what some might think, procurement service companies do not function like bulk warehouses that allow you to purchase what you need in large quantities at low prices. Rather, our purpose at Source1 Purchasing is to provide a strategic analysis of your company’s operational spending so that we can help save money for your bottom line through more efficient purchasing.
Why You Should Use a Procurement Service Company
When you work with Source1 Purchasing, we can provide a rapid analysis of your current supply chain to see what is functioning efficiently, as well as what changes need to be implemented to help keep spending low. We will negotiate with sellers to obtain the best prices for your business while still allowing you to utilize the best practices for your industry. Source1 Purchasing is proud to offer:
- Systems and processes that limit risk and promote transparency
- Programs that assist you in developing the specifications you need
- Pre-qualifying processes for suppliers
- Negotiating your contracts to ensure fairness and profitability
How Procurement Service Companies Help You
As part of our job, Source1 Purchasing can help you vet all third-party vendors so that you can rest assured that the goods and services they sell are of the best quality and value for your industry. Sometimes there are unreliable and unverified vendors that will try to gain your business before disappearing with your money and without supplying the promised goods or services. Source1 Purchasing can help by making sure that all of your suppliers are fully validated so that you can avoid these potential pitfalls.
Choose Procurement Services
One of the greatest services that a procurement service company can offer to your business is detailed knowledge of your particular industry as well as insights into saving your management time and money. Source1 Purchasing leverages actionable data, creates a program tailored to your needs, and offers the widest range of contracts available so that your business can get the best value for your needs.
Source1 Purchasing offers buying that you can believe in. If you work in the hospitality, lodging, or entertainment industries, then you need to contact us to see how we can help strengthen the supply networks you currently have, grow the ones you need, and provide the savings that your business deserves. Contact us today to get started!