oh 4-1 agenda chapter 4 inventory project invoices/inventory book set-up physical inventory: week of...

OH 4-1

Agenda Chapter 4

Inventory Project

Invoices/Inventory Book set-up

Physical Inventory: Week of April 6th ; wear uniform or chef coat, appropriate shoes, hair restraints (bring)

Inventory copy, and report due April 14th

Reminder: schedule receiving with Metro chef

Summary of entire inventory project (due by April 28)

Work on group presentations

OH 4-2

Key Term Review

Acceptable trim

Consumer trends

Count

Edible yield

Individually quick frozen (IQF)

Intended use

Make-or-buy analysis

Market form

Packer’s brand name

Portion-controlled (PC)

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Key Term Review continued

Product specification

Quality standards

Shelf life

Stockout

Throughput

Value-added product

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The Procurement Process and Supplier Selection

Inventory and Purchasing

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Chapter Learning Objectives

Outline the process for procuring products and services.

Differentiate between perishable and nonperishable food products.

Understand the importance of assessing and documenting purchasing requirements.

Define perpetual and physical inventory.

Identify optimal sources of suppliers.

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Channel of Distribution

Sources – growers, manufacturers, processors

Intermediaries – Distributors: specialty, full-line, broadline Brokers: do not buy or sell – they promote Manufacturers Representatives/ Agents Commissaries Whole Sale Clubs – Buying Clubs

Retailers (Hospitality Operations)

Consumers

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The Procurement Process

The procurement process consists of

Purchasing the ideal quality of product or service

From the ideal supplier

For the ideal edible portion (EP) cost

At the ideal time

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The Procurement Process continued

Making product (or service) selections does not complete the procurement process!

The procurement process is only completed when products are properly Received

Stored

Issued

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The steps in the procurement process:

1. Assessing

2. Selecting

3. Ordering

4. Receiving

5. Storing and issuing

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Step 1 – Assess needs

Perishable products Meats

Fish

Poultry

Dairy and eggs

Produce

Beverage alcohols

Nonperishable Products Are often nonfood items

Are purchased less frequently

Usually have higher costs

Must be purchased with a long-term view toward replacement and repair

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Step 2 – Select criteria and quality standards

When selecting products and services, as well as the vendors who will be chosen to supply them, purchasers must consider a large number of factors.

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Selection Factors

Intended use

Exact name

Packer’s brand name

Government grade

Product/container size

Type of container

Vendor reputation

Minimum weight per case

Product yield

Point of origin

Product form

Color

Ripeness (and ripening process used)

Preservation method

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Step 3 – Define ordering procedures

Operational needs

Purchase requisitions

Purchase orders

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Ordering products and services can be done

In person

By telephone

Via fax

Via email

Online (Internet)

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Step 4 – Define receiving procedures

The receiving step presents the operation with its final opportunity to ensure that quality standards have been met.

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Professional receiving depends upon:

A suitable receiving dock area that is

Clean

Secure

Well lit

Well located

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Appropriate receiving equipment

Temperature probes

Accurate scales

Pallet jacks

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Capable receiving personnel

Remember that learning to identify quality food products requires the operation to have a clearly stated definition of quality for each item ordered.

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A receiving schedule

Receiving schedules must be acceptable to both the operation and the vendor.

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Copies of purchase orders available to receiving personnel

It is impossible to ensure purchased items have been properly delivered if the items originally purchased are unknown.

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Copies of product specifications readily available to receiving personnel

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Invoice vs. Blind Receiving

Invoice

Receiving clerk checks order against P.O. and invoice for Quality

Quantity

Prices

Invoice also checked against P.O.

Blind

Receiving clerk des not know what should be delivered

Must weigh, count and record all merchandise

Added control, but very time consuming and $$$

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Additional Receiving Duties

Date the delivered items

Price all of the delivered items

Create bar codes

Apply meat tags

Housekeeping

Update AP prices

Backhaul recyclables

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Good Receiving Practices

Beware of excess ice, watered-down products, wrapping paper and packaging that can add dead weight to delivered products. This “tare weight” should be subtracted from the gross weight to compute net weight of merchandise purchased by weight.

Check the quality under the top layer of products. Examine packages for leakage or other forms of water damage, as

well as swollen cans. Check expiration dates and dating codes. Weigh items separately Be wary of drivers eager to help carry items to storage areas Spot check portioned products for portion weights Check merchandise for re-freezing or “slacked out”- supposedly

fresh but actually frozen thawed and made to appear as if it was fresh

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Common Receiving Forms

Request for Credit Memorandum Used when reject merchandise

Pick Up Memorandum Used when you want to return merchandise

previously accepted

Transfer Slips Used to transfer between units (franchise

operations)

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Step 5 – Define storing and issuing procedures

Adequate storage settings include:

Adequate facility and storage space

Adherence to temperature requirements

Storage facilities located in close proximity to the production units and receiving area

Appropriate storage area regulations

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Equipment Needs for Storage Areas Shelving: ideally modular, for refrigeration best is

made from durable plastic or stainless steel coated with vinyl, for dry storage chrome or galvanized metal is ok but stainless steel is preferred

Dunnage Racks: for stacking cases of product and items issued in bulk, i.e. bags of flour, sugar etc.

Wall Racks: spices

Can Racks

Scales, work tables, sinks, thermometers

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The Procurement Process continued Other Storage Considerations:

Group similar category items together such as bakery supplies, canned vegetables, pasta, oils, seasonings, paper goods, frozen meats, frozen vegetables, dairy items, etc.

Store glass products and other breakables close to the floor

Store items that weigh more that 30 lbs at waist level or below and lighter items on upper shelves

Use dunnage racks for cases and heavier bulk items

Shelves and bins should be labeled

Rooms should have enough lighting to see all products

Equipment for reaching/moving product such as stepladders, carts and stools should be available but out of the way

Doors should be wide enough to allow carts and pallets through

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Step 5 – Define storing and issuing procedures continued

Issuing perishables

In most cases, perishables are issued directly to the departments that will use them.

Issuing nonperishables

In most cases, nonperishable food and nonfood items are sent to a central storage facility.

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Agenda Chapter 4

Inventory Reports Red Lobster – Brigida & Erin

Ted’s Nebraska Grill – David Campbell

Blue Sushi – Brandon Thomas

McKenna’s – Meredith Beaver

Omaha Hilton – Stephanie Hatch

Stephanie Gigax

Red Robin - Kyle Shoemaker

Village Inn – Jessica Thomas

Michelle Hood

OH 4-31

Agenda Inventory Project

Invoices/Inventory Book set-up

Physical Inventory: Week of April 6th ; wear uniform or chef coat, appropriate shoes, hair restraints (bring)

Inventory copy, and report due April 14th

Reminder: schedule receiving with Metro chef

Summary of entire inventory project (due by April 28)

Chapter Five

Work on group presentations

OH 4-32

Supplier Selection

Supplier types

One-stop shop—the operation selects one (or two) suppliers to meet all of the operation’s buying needs.

Bid buying—the operation allows for various suppliers to periodically respond to a request-for-bid or request-for-price (RFP).

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Supplier Selection Criteria

Supplier facilities must be sanitary.

Facilities that supply meat, poultry, and eggs must be inspected by the U.S. Department of Agriculture (USDA).

Suppliers must comply with applicable local, state, and federal laws.

Suppliers should be able to provide a list of references.

Suppliers must have adequate delivery equipment (trucks and temperature control units).

Supplier personnel should practice proper personal hygiene.

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Contract Points to Include

After selecting a supplier:

Arrange a supplier visit to the operation to ensure the supplier understands the unique features of your operation.

Review the receiving area for adequacy, exits, entrance doors, and the like.

Establish allowable delivery times.

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Supplier-Related Terms to Know

Independent delivery services

Stockless purchasing

Cost-plus purchasing

Standing orders

Return and replacement policy

Credit terms

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Cost of Paying Early

If You Pay $50,000 Two Weeks Early and Bank Pays 3.5% interest $50,000 x 3.5% = $1,750

$1,750/52 weeks = $33.65 lost interest per week

$33.65 x 2 weeks - $67.30 lost interest

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Cost of Paying Late

Incur Interest and Penalty Charges

Damage Credit Rating

Suppliers Could Insist on C.O.D.

Legal Difficulties

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How Would You Answerthe Following Questions?

1. A (purchase requisition/purchase order) is an internal purchasing document.

2. Which of the following is not an important procurement step? A. PayingB. OrderingC. StoringD. Assessing

3. Which items are typically delivered directly to the department that will use them?

4. Suppliers of meats, poultry, and eggs voluntarily choose to have their facilities inspected by the USDA who may/will at the same time grade their products. (True/False)

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Inventory Project – 100 points

Students will be required to set up an Inventory Book from invoices provided by the instructor (in class directions will be provided) – 20 points

Handout & Instructions

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Week of April 6th, each student will participate in the process of physical inventory at a site to be chosen by the student and submit a copy of the inventory sheets. Students must wear ICA uniform; chef coat, appropriate shoes and hair restraints ( bring your hat or hairnet)– 30 points.

An interview will be conducted by the students at the inventory site with the purchasing manager or general manager – 20 points. Interview questions must include the topics on the interview sheet provided.

The students will present a 5 minute group report of their inventory experience to the class on April 14th, the week following the physical inventory, including the information from the manager interview – 10 points.

The copy of the inventory and report are due April 14th

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Students will participate in the receiving function for one vendor order (to be scheduled with Metro Kitchen Chef or if student can receive an order at place of employment, this may also be done if arranged in advance with instructor) – 10 points

The form for the receiving component was included in the Purchasing Project Worksheet or can be found on Sharepoint.

The entire project is due April 28th

Any questions of the Inventory Project?

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Chapter Learning Objectives— What Did You Learn?

Outline the process for procuring products and services.

Differentiate between perishable and nonperishable food products.

Understand the importance of assessing and documenting purchasing requirements.

Define perpetual and physical inventory.

Identify optimal sources of suppliers.

oh 4-1 agenda chapter 4 inventory project invoices/inventory book set-up physical inventory: week of...

Documents

procurement process

ripening process

repair slide

ideal time slide

stored issued slide

portioncontrolled pc

email online internet

ideal quality of product