Author: rvadmin

Smallwares and supplies are generally purchased infrequently and the expenditures for this category can drastically increase if there are no controls in place. With out controls, expect the average product cost to be from 10-30% higher than necessary. Infrequent buying is not a rationalization for poor buying decisions. The savings can add up to thousands per year depending on the size of your operation.

A minimum amount of research and planning can go along way to reduce costs.

First, rank products in terms of usage. This list may be ranked and categorized as follows:

1. Chemicals & Disposables
2. Glassware
3. Flatware
4. China
5. Miscellaneous Tabletop (salt & Pepper etc.)
6. Miscellaneous Kitchen & Bar Supply

The most crucial and difficult part of this is specifying. When specifying always use the manufacturer brand and factory model number. This will standardize and identify your product requirements and help you to avoid paying a higher price for less than expected quality. It will also make it easier for the DSR to source and avoid errors by ordering and shipping the wrong item. Obtain this information from existing product packaging or previous invoices. If you do not have a specification, do the necessary research to obtain it. Remember the important control is to have this information available before buying. If a substitute is proposed, which it will, scrutinize that item by getting a sample. A substitute may not work if the product must stack with existing product. The most difficult specification to identify will be category#6 but it is also the least significant, ranked at the bottom of the usage list.

With the brand and model number, competitive pricing can easily be checked on the internet.  Example: The brand and model number of a 10” fiberglass tray keyed into a search engine immediately displays $71.82, 77.76 and 82.52 per dozen, a 14.6% pricing difference. Freight is always a factor so be sure to require a delivered prices.

Finally, review product availability and return policies with all potential suppliers. These items must be on hand for immediate delivery. If not, inventory should be kept on hand or anticipated to allow for lead times. Work with your local E&S or Broadline distributor and insist on a delivered price to simplify price comparison. Maintain an inventory list with the last cost paid. Use this indicator for future orders and look for it to remain stable for one full year.

Obtain equipment recommendations, sourcing, and basic information to help you qualify your buying decision by going to restaurantvalues.net

In both theory and practice many of the techniques applied in food cost control can be applied to E&S depending on the type of product and usage requirements. Heavy equipment however, is a long term capital investment with useful life and long term operational considerations added to the buying decision. If managed correctly, cost control methods can easily be implemented to insure compliance with specifications, pricing guidelines and product availability. By planning, specifying, and maintaining equipment properly, a well trained staff will be empowered to deliver the highest level of quality and service and the return on investment can be accelerated significantly.

There are three types of E&S Procurement scenarios; (1) new facility – contract package purchasing, (2) on going replacement of supplies and smallwares and (3) the replacement or addition of heavy equipment. This article will focus on new facility contracts.

New Facility, Contract Purchase – Start up Package

Bid Documents

Completed and approved architectural drawing and specifications will provide most of the bid requirement details. Equipment will be listed on the equipment schedule indicating quantity, brand, model number, description and utility requirements. Bid forms can be created and are recommended. The floor plan will show the layout and location of equipment. Other sections of the drawings pertinent to the equipment bid will include elevation drawings, wall backing plan, walk-In refrigeration, and hood ventilation details.

Equipment Vendor / KEC Contractor

Not all foodservice equipment distributors specialize or get involved in contract sales. It is recommended that contract specialists bid a new contract package. A contract specialist is a full line equipment distributor that has staging facilities with separate project storage bays. Avoid internet and mail order suppliers. They most likely lack the ability to consolidate and do not have a system in place for contract work. Negotiate line item price variations with the supplier you are dealing with keeping the package intact. This will maximize service levels and help to insure expected results.

Scheduling

After the contract is executed, a turn over and grand opening date is established based on the construction schedule. Equipment Purchase orders are placed with the required ship date specified to meet scheduled deadlines. Equipment is shipped from the manufacturer to a distributor warehouse location. As equipment is delivered to the staging facility, warehouse personnel carefully receive, look for damage, and check in each item. Coordinators update reports daily, and issue job status reports weekly to insure the project line items are received on time. One late item can hold up the entire project delivery.

Delivery & Installation

A complete contract package includes consolidation, installation and one or two deliveries to the job site depending on the size of the package. Direct shipment of the hood system and walk-ins are standard practice to avoid excessive shipping costs and the likelihood of damage due to double handling. Another reason to ship these items direct is due to the construction schedule normally requiring the hood and walk-in to be installed on site before the balance of the equipment package is delivered. The KEC will quote the complete hood system delivered and the HVAC contractor will be responsible to install and balance the ventilation system. The fire suppression system can be included with the hood package and installed by the KEC. The KEC will normally be responsible to hire a refrigeration contractor to receive and install the refrigeration system complete for the walk-in and any other remote refrigeration items in the contract. Beer systems, millwork and furniture are also typical items for the KEC to furnish and install, but not always the case. These items may also require direct shipment. The main equipment package will be loaded at the consolidation warehouse and delivered on site. An installation crew normally a part of the KEC’s contract will receive, unload, unpack, assemble and set in place ready for final connection by the various trades. A start and check service order should be included with the KEC contract and performed after all the equipment is connected. Shortening should be on site for accurate calibration of the fryers.

Smallwares & Supplies

If smallwares are provided by the same distributor a lump sum total can be represented as a line item and a breakdown can be attached as a separate bill of goods. Smallwares are normally delivered one week after the equipment installation is complete.

Bid Outline

Itemize and compare bids competitively as follows:

Equipment – Consolidation Package – Itemized
Freight out – Hood
Freight out – Walk-In
Freight out – Furniture / Millwork
Incoming Freight – Consolidated Package
Delivery – Consolidated Package
Installation – Consolidated Package
Installation – Refrigeration
Installation – Fire System
Installation – Beer System
Total
Sales Tax
Grand Total

Terms & Conditions

Application, Terms and Security Agreement should be included for review and signature. Typically in two or three parts with an initial deposit of 40-50%, second payment 45-55% one week before delivery and the balance one week after satisfactory completion. Some suppliers require the full balance before delivery. Applications are required to set up an account and UCC forms are filed to protect the distributor. Responsible distributors release the UCC filing immediately after final payment.

Obtain equipment recommendations, sourcing, and basic information to help you qualify your buying decision by going to restaurantvalues.net