In the hospitality industry, purchasing may be thought as " a function concerned with the search, selection, purchase, receipt, storage area, and last use of the commodity relative to the catering plan of the establishment". (Davis and Kotas, 1986:47)
Davis and Kotas (1986) suggest that purchasing is a simple function in the drink control circuit. If this function is been able effectively, then any hotel can attain quality drink products anyway cost possible based on the company's financial objectives.
The aim of beverage purchasing is to procure the best quality of items, at the cheapest price for a specific purpose. It is a must to provide considerable focus on the drink cost control since beverages will normally throw in more revenue than food. Fewer staff must process beverage into a completed item for usage by the clients compares to food. (Davis et al, 2008)
3. 2 The Purchasing Personnel
Staff members that are responsible for the beverage buys vary depending on the type and size of the establishment. (Davis and Kotas, 1986)
The purchasing director is accountable for the beverage purchasing function in Hotels One and Two. In Hotel-Three the purchasing supervisor and the meals and beverage manager are accountable for the beverage purchasing function whereas in Hotel-Four the purchasing administrator and the price controller are accountable for this function. In Hotel-Two when there's a special theme evening, the meals and beverage administrator will become a member of the purchasing supervisor for such occasions.
The purchasing function is centralised as hotel purchasing for Hotels One and Four. Alternatively the purchasing function is centralised as a group purchasing for Hotels Two and Three. It was agreed by all the interviewed workers that the purchasing personnel have to be experienced and knowledgeable about the products that they have to order. Actually the purchasing supervisor in Hotel-Three has over thirty years of experience in this function. Regarding Hotel-Two it was described that although experience and knowledge are essential for the purchasing function, most items in Malta are standard. It also was also remarked that the purchasing function will depend on the demand of other departments. There need to be cross functional clubs (that is team work) and strong communication among all the hotel departments.
Standards for beverage purchasing are developed for all the four hotels interviewed. Quality is given primary priority in every the hotels interviewed aside from for Hotel-Two where the first preference is on the price. Regarding Hotel-One, the merchandise have to fulfill the bar director and afterwards the purchasing personnel will deal for the best price for the pre-established quality. They'll try to obtain the best price at the best quality. In Hotel-Three the purchasing personnel will try to realize a balance between price and quality however 'Quality is on top of the agenda. ' It is vital to consider the purchase of a few of beverage components of each outlet independently. Including the wines offered by the pool pub will be at a lesser quality with less price when compared to the main bar. Each product can have a good quality, very good quality or best value. The purchasing workers have to find the quality that is enough for the precise outlet. In Hotel-Four both quality and price receive right of way however quality will usually get. In Hotel-Two price is given precedence in the sense that, whenever choosing between two products with similar quality but different prices, the purchasing workers should go for the cheaper product.
The levels of drinks to be ordered are dependant on the storekeeper with the skilled assistance of the purchasing supervisor using a par stock level. When required in Hotel-One the price controller will help out to determine the volumes to be ordered. In Hotel-Three the meals and beverage supervisor will assist when had a need to determine such quantities.
3. 3 Selecting Suppliers
Full details of the organization and the number of items it is reselling;
Copies of recent price lists;
Details of trading conditions;
Details of other customers they offer with;
Samples of products.
Ideally there must be a trip to any potential dealer to enhance know-how about how big is the company; the range of the merchandise; how big is processing and storage facilities and also to meet people of the management team. All these factors help a ecological long-term method of trading. (Dopsen, Hayes and Miller, 2007)
Suppliers can be chosen on the basis of their reputation in the market, upon a study of a distributor and on the basis of their performance. "The very best supplier is the main one who provides the firm with efficient service in regards to to amount, quality, price and delivery performance''. (Davis and Kotas, 1986:53)
In all the hotels except for Hotel-Four there is a list of arranged suppliers from whom products are bought. Hotel-One has a list of preferred suppliers from whom the purchasing workers will buy regularly. It is a preferred suppliers' list rather than an approved suppliers' list. The good thing about using a preferred rather than an approved list is the fact if any particular company will provide you with trouble (not reliable for the hotel), then this company can be immediately substituted. Hotel-Two has an approved supplier when it comes to carbonated drinks and beers. With regards to spirits, the suppliers are preferred rather than approved.
Hotel-Three has agreements with the suppliers comprising pre-agreed prices and pre-agreed quality of the shown products, however if something won't vary including the quality will deteriorate, the purchasing personnel will adjust the distributor if the issues will never be tackled. Although there is a contract, it isn't a set contact that is the hotel personnel aren't obliged to buy the drink products from the precise supplier. Hotel-Four doesn't have any suppliers' list. With this hotel the suppliers are chosen in line with the quality of the merchandise, the type of brands required and the services that the distributor will offer you to the hotel.
When selecting the suppliers, the criteria evaluated by Hotel-One are credit term, quality and prices. The credit term period is given top priority. According to Hotel-One it is worthless to go for the best quality and the best price if the credit conditions period is brief. In Hotel-Two price is given top priority when choosing suppliers while quality and business lead time are also analysed to help make the right decision. In the other two hotels quality is the most important factor used to look for the suppliers to be chosen for the drink products.
Dopsen, Hayes and Miller (2007) explained that the supplier performance can be evaluated using the ranking system which usually includes: price, quality and delivery performance. Potential suppliers' performance is merely assessed by Hotel-Three. Every now and then the purchasing administrator will decide on some items and validate if there is a much better product in the market than the the one which the hotel happens to be using. The purchasing director without involving employees in procedure will grab different products and will make a blind demonstration and tasting of the product. The purchasing department will decant the merchandise that will be identifiable (delete the label and the distributor' name) and the food and beverage director will rate the merchandise using a ranking sheet including quality, yields among other factors. The person rating the merchandise will not know who the provider is.
Although the decision taken will not be based on price, the meals and beverage workers will know the price to be able to match the product being tasted with its price accordingly. There have to be a balance between quality and price. It could be that the merchandise quality is superior set alongside the hotel standard thus the merchandise will not be affordable. Then your ranking sheet is filled out.
Hotel-One pointed out that the suppliers' evaluation and performance is not well prepared because this will not add any value on the hotel sales.
The cheapest item is not automatically the better to buy since low-cost products can result in poor. Normally the accountable persons go for the supplier on the basis of the quality required and then discuss the best price for this. There's always a trade-off between quality and price.
3. 4 The Purchasing Procedure
The initiation of the request to buy drinks by an authorised employee like the head of division or restaurant supervisor;
The selection of the source of supply that the goods should be purchased, and the price to be paid;
Entering into a deal with the provider by cell phone, electronically or on paper;
Obtaining a reasonable delivery performance from the provider in regards to to time, day and host to delivery;
The approval of goods purchased and the copy to the ordering department or to the stores.
"Purchasing is not really a individual activity. What, how and when you buy should always reflect the overall goals of your establishment. Styles change - so must you, the customer. " (Dark brown, 2005:396)
Dopsen, Hayes and Miller (2007) recommend that the task should reflect the sort of the establishment and the market where it works. Those responsible should consider: the positioning of the establishment in relation to its suppliers; how big is the storage facilities of the hotel; the shelf life of the beverage product; and the company's purchasing power. Regardless of the establishment is, it is very important to have a sound purchasing policy so that acceptable standards will be achieved.
3. 5 Purchasing Orders
In every hotel it is essential to own purchasing insurance policies and procedures which can be planned to allow business transactions to occur smoothly between company and device. Documentary research should concur that the procedures are in reality being implemented.
In Hotel-One purchase orders are authorised by the purchasing official and the financial controller while in Hotel-Two these are authorised by the group purchasing director. In Hotel-Three the purchase purchases are authorised by the price controller or the general supervisor while in Hotel-Four these are authorised by the head of division and the last mentioned will also talk to the financial controller and the overall manager, if regarded necessary. In all the hotels those authorising purchase requests are independent from those in charge of issuing requisitions. This avoids certain abuses that may be completed when the same person will be in charge of both authorising purchase purchases and for issuing requisitions.
In Hotel-Two the persons issuing requisitions are the mind of departments or the supervisors. Then the storekeeper will deliver the items that were recently ordered and the cost controller will validate that every order is its perspective. In Hotel-Four the purchase requests are prepared by the head of departments while for the other three hotels, the purchase orders are ready by the purchasing director.
Every hotel has a system of par stock level. In Hotel-One the price controller will work to make a par stock level which will depend on the time of the year, the sort of functions that the hotel has, and the kind of clients that the hotel has. The aim of these par stock levels is to involve some components of every stock with a limited quantity since high stock means cash deposit the drain. On top of that ineffective stock will lead to negative cash moves.
In Hotel-Two it was remarked that the par stock level used is an informal the one that will be modified based on the company needs. A spot to note is the fact in Malta, hoteliers work a lot on a last minute purchases. This is used since ranges are short and so if there is a stock item lacking, you can contact the supplier and the second option will bring the item in a few hours. In Hotel-Three the cost controller is sensible to ensure that companies in the stores are retained lowest as is feasible as these will stand for idle money.
The information contained in the purchase orders of each hotel is nearly identical to each other. Hotels One and Three does not have the conditions of payments posted in the purchase purchases. The purchase order of Hotel-Three contained a disclaimer that declares that if the distributor (who will have the purchase order) won't buy into the purchase order in terms of volume or price or he does not have the pre-agreed brand, the company shall advise the purchasing director before the delivery. In Hotel-Four the kind of brand is not posted in the purchase orders.
All the hotels have sequentially pre-numbered purchase orders. Normally a backup of the purchase order has been received by the provider. The goods received clerk/storekeeper will also have the purchase order and the same duplicate will go directly to the cost controller who'll affix it with the invoice and passes it through his system and then the cost controller will give the purchase order to the accounts clerk who will cross it through the accounting system.
On receipt of any authorised requisition form, it is vital to check on the economic quantity to be purchased by examining the existing stocks and options and the sales amount forecast. After creating the purchase requirements, a formal written purchase order is ready. This acts as the basis for purchasing. Written information lessen misunderstandings so that it is better to maintain some written record of acquisitions, preferably on a purchase order, to verify the correctness of deliveries received. (Dopsen, Hayes and Miller, 2007)
3. 6 Concluding Remark
"Think about purchasing as a routine, not a one-time activity. Purchasing is not only a matter of phoning or emailing another order. You don't want to run out, nor would you like to overstock. '' (Brown, 2005:395)
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