Food and Beverage Management - Unit 9

CHAPTER 9
FOOD AND BEVERAGE
MANAGEMENT
PROCUREMENT/PURCHASING
PREPARED BY:
NORHASIMAH BINTI HAMIM
SCHOOL OF HOTEL MANAGEMENT
FACULTY OF HOSPITALITY AND TOURISM
MANAGEMENT

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LEARNING OUTCOMES
At the end of this chapter, students will be able to:
 Define the meaning of procurement and purchasing
 Identify and explain the fundamental steps in purchasing, receiving
and issuing process
 Understand the specifications often used during receiving process
 Learn about storage guidelines

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TOPIC OUTLINES
Introduction
9.1 Procurement/purchasing
9.1.1 Definition
9.1.2 Fundamental steps in purchasing process
9.1.3 Personnel in procurement/purchasing area
9.2 Receiving and Storing
9.2.1 Receiving process
9.2.2 Storage guidelines
9.3 Issuing and Inventory
9.3.1 Issuing process
9.3.2 Inventory and other records

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INTRODUCTION
Overview of the Food Management Process
Receiving
Storing
Issuing
Production
Preparing
Cooking
Holding
Procurement
Serving
Service
Menu Planning

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9.1 Procurement/Purchasing
Goals of Purchasing Process
Purchasers desire to obtain:
 the right product
 at the right time
 in the right quantity
 from the right suppliers
 at the right price

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 Procurement is critical to the financial success
of a foodservice operation
 Purchasing includes a focus on quality, quantity
and price
 Procurement is the managerial function of
acquiring material for production.
 These material includes food & nonfood items
9.1.1 Definition
Discussion:
What is the different between procurement
and purchasing?

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Purchasing Activities and Responsibilities
Production
Issue
Requisition
Storage
Purchase
Requisition
Purchasing
Receiving
Supplier
Supplier
Supplier
Step 1 Step 2 Step 3

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9.1.2 Fundamental steps in purchasing process
Recognition of a need
Description of needed item
Authorization of Purchase Requisition
Negotiation with Potential Supplier
Evaluation of Proposal and placement order
Verification of invoice and delivered material
Closure of the purchase record and
payment for material
Follow-up order
Types of Forms:
1.Requisition forms/market lists
2.Purchase order

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 Recognition of Needs
 Needs occur in the production unit, storage area
 In larger organizations, centralized purchasing has inventory responsibility
 These needs should be followed by action to remedy the deficiency by
preparing a requisition
When to Purchase?
 Fresh produce, baked goods and dairy
products – several times weekly (or more
frequently)
 Dry and frozen items – weekly (or less
frequently)
Managers must consider
 Estimated usage rates
 Available storage space
 Delivery costs

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 Description of the Needed Item
 Initiate a requisition, preferably in written
 Storeroom can supply if it has an adequate supply
 Or else, storekeeper initiate requisition to purchasing for replenishment
 Now day, computer software are available to generate requisition list and
keep track of inventory
How Much Should Be Purchased?
The basic formula:
Quantity Needed – Quantity on Hand = Quantity to Purchase
Sales mix data helps with quantity forecasting
Purchase Quantities Must Also Consider:
 Safety levels
 Minimum delivery requirements
 Quantity purchase discounts
 Length of delivery period

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 Authorization of the Purchase Requisition
 A policy should established to indicate who has the authority to requisite
food or nonfood items.
 No requisitions should be honored unless the person submitting them has
the authority to do so.
 Supplier should know the names of the persons authorizes to issue
purchase orders
 Negotiation with Potential Suppliers
 Negotiation in purchasing is the process of working out a mutually
satisfactory contract
 Is one of the most important parts of the procurement function
 Details such as establishing the qualification of the suppliers, determining
fair and reasonable prices, setting delivery date, terms and condition of the
contract

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 Evaluation of the Proposals and the Placement of Order
 All supplier proposals are evaluated for compliance
 Orders should be in written
 Many software can generate purchase order and for supplier.
 Follow-up Order
 Usually buyer should not have to follow up an order
 However, special function with specific delivery time of certain product to an
occasion, is good to follow-up
Method of ordering:
1.Phone call
2.Fax
3.E-mail
4.Suppliers ordering
system

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 Verification of Invoice and Delivered Materials
 The invoice is the suppliers’ statement of what is being shipped and
expected payment
 The invoice should then check against the purchase order for quantity,
quality and price
 Any difference require immediate action
 Closure of Purchase Records
 Assembling the written records of purchase
process
 Filling in appropriate place
 Authorizing payment for good delivery

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9.1.3 Personnel in procurement/purchasing area
 Oversee the procurement process
 Writing food & equipment specifications
 Communicate with departments and suppliers
 Inventory monitoring
 Paying bills
Role of purchasing manager
Discussion:
Identify other personnel that might involve
in the purchasing process?

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 Competent Personnel
 Facilities and Equipment
 Specifications
 Critical Control in Receiving
 Sanitation
 Adequate Supervision
 Schedule Hours
 Security

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9.2.1 Receiving process
Inspection against the Purchasing Order
Inspection against the Delivery Order/Invoice
Acceptance or Rejection of Orders
Completion of Receiving Records and Invoice
Removal to Storage

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 Inspection against the Purchasing Order
 A written record of all orders must be kept to provide a basis for checking
deliveries
 The PO becomes the first control included: product description, quantity,
price, supplier
 Inspection against the Delivery Order/Invoice
 Upon receiving, the delivery should be compare with the invoice prepared
by supplier
 Receiving Methods:
Invoice receiving
Blind receiving
Electronic receiving

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Receiving and Inspecting Specific Food:
 X
 X
 X

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 X  X
 X  X

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 Completion of Receiving Records/Invoice
 The information is helpful in verifying and paying invoices and provides an
important records for cost control of all food delivered to kitchen and
storeroom

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 Removal to Storage
 Products should be transferred
immediately from receiving to the
secure storage area
 Security measures are important
to prevent theft and pilferage
 Should have procedure for
marking and tagging products for
storage
Discussion:
What is the difference between invoice
and delivery order?
Terms of payment:
1.Cash
2.Credit terms

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The Storing Process
Three basic types of storage:
 Dry storage (50o F – 70o F; 10o C – 21.1o C ) – for grocery items such as canned
goods, cereal products such as flour and alcoholic beverage products such as
liquor.
 Refrigerated storage (less than 41o F ; 5o C ) – for items such as fresh meat,
produce and dairy products.
 Frozen storage (less than 0o F; -17.8o C ) – for items such as frozen meats,
seafood, French fries and other vegetables purchased frozen.
9.2.2 Storage Guidelines

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Quality Concerns During Storage
a) Label potentially hazardous, ready-to-eat food prepared on-site
b) Deplete product on a regular basis
c) Transfer food between containers properly
d) Keep potentially hazardous food out of the temperature danger zone
e) Check temperatures of stored food and storage areas
f) Store food only in designated storage areas
g) Keep all storage areas and equipment clean and dry
For protection against possible chemical poisoning, insecticide dispensers should not be
within 12 feet of exposed food, food preparation, or serving areas or food contact
surfaces. This includes all food equipment, utensils, tables, counters, and similar articles
and space used in the preparation of food and drink.

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The storing systems
 FIFO stands for first-in, first-out, meaning
that identify the use-by, expiration, or
preparation date of products
 Shelve products with earliest dates in front
of those with later dates
 Use products stored in front first

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 LIFO stands for last-in, first-out,
meaning that the most recently stored
items are used first.
 Often used for items that consumed in
bulk and frequent that stored in
containers such as flour, sugar and
rice.

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 Issuing is the act of distributing the
food items to production
 Two methods:
 Direct issues - Products issued
immediately into production from
the receiving dock
Should be recorded in
storeroom’s inventory for
recordkeeping purposes
 Storeroom issues
9.3.1 Issuing process

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Definition:
 Inventory is the total amount of goods and/or materials contained in a store or
factory at any given time.
Conducting Inventories
 Physical inventories are done in the
storeroom or cooler
 Perpetual (virtual) inventory
9.3.2 Inventory and other records

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Inventory Management
 Process of controlling inventory volume until it is to be issued
 Consider shelf life (Good food is a financial loss if left to spoil)
 Informal systems of control
 Check sheets used by employee when items are removed from stockroom
 Formal systems of control
 Consists of a system for tracking issues
 Must have staff to do this
 Employed by larger food service operations
 A system to determine when and how much product to order is needed

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Inventory Record Systems
 Storeroom inventory database should contain:
 Stock item number
 Storage location code
 Product description and specifications
 Approved brand names and suppliers
 Inventory information, and more

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Other records
 Bin Card is a stock status recording document for a particular material/item held
in a stock room.
 Par Stock is the estimated quantity required or needed for operation.

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