OH 5-1 Agenda Chapter 8 – Purchasing Follow-Up Tour of receiving area Physical Receiving Inventory Book Set-Up Unit of Measures Worksheet Project: Standardized.

OH 5-1

Agenda Chapter 8 – Purchasing Follow-Up

Tour of receiving area

Physical Receiving

Inventory Book Set-Up

Unit of Measures Worksheet

Project: Standardized Recipes

Complete Chapter 1

Update Sign-up Sheets

Next week

OH 5-2

Purchasing Follow-Up

Purchasing

8OH 1-2

OH 5-3

Chapter 8 – Learning Objectives

Explain the basic procedures to monitor vendor compliance with quality standards at the time of receiving.

Summarize the basic requirements for effective product receiving.

Explain the necessary documentation and procedures that should be followed to pay vendors for product purchases.

Describe the importance of and basic methods that can be used to evaluate the purchasing process.

OH 5-4

Case Study

Page 193 of text book

Discussion questions

Has this happened where you are employed?

OH 5-5

Receiving

Definition: Receiving is a series of activities that ends with the transfer of product ownership from a vendor to a restaurant or foodservice operation.

Business volume may dictate receiving procedures and control.

OH 5-6

Receiving continued

Control procedures for receiving tend to increase with property size.

OH 5-7

Receiving continued

Let’s look at examples of each of the following sizes of operations:

Examples

Who might be responsible for receiving

Small operations

Midsized operations

Large-volume properties

OH 5-8

Receiving continued

Effective receiving practices are essential in any operation

Managers responsibilities Develop & implement policies and procedures,

monitor and corrective action taken if not used Designate and train responsible employees Train in identifying quality standards Provide equipment needed and train in use and

maintenance Inform vendors of receiving process

OH 5-9

Receiving continued

Characteristics of successful receiving staff:

Maintain food safety standards

Use available technology

Meet physical demands of position

Recognize and resolve problems

Part of team to meet organization goals

OH 5-10

Receiving continued

Basic Receiving ProceduresAdequate space for proper receiving and storageProper equipment….

OH 5-11

Receiving continued

Steps in Receiving must be followed

Deviances noticed and corrective action taken

OH 5-12

Receiving continued

Let’s identify the parts of the invoice.

Open text to page 199

OH 5-13

Receiving continued

Determine Quality Standards

Develop product specification

Define A Items

Spot check quality; look for trends

Contact vendors if problems persist

OH 5-14

Receiving continued

Keep a log of receiving

Document credits immediately

Follow up if additional product needs to be ordered

Communicate issues to intended user

Keep food safe

Watch for theft

OH 5-15

Receiving continued

Daily logs may be used to calculate food costs

OH 5-16

Technology and Receiving

Paperless receiving Electronic purchase orders

Check incoming products

Bar code labels

Radio frequency identification (RFID) – real time inventory

Inventory management

OH 5-17

Security and Receiving

Guard against common problems: Short weights

Assorted contents

Missing items

Limited access

Authorized personnel only

OH 5-18

Payment for Purchases

Vendors must be paid in a timely matter and according to contract terms

Documentation and communication to accounting staff

Responsibility varies upon size of operation

OH 5-19

Payment for Purchases

Internal flow of documents page 205 of text

OH 5-20

Payment for Purchases

Internal flow of documents

Small volume: one person

Mid-volume: Department heads requisition product from purchaser

Large-volume: Team of receiving, storage, supervisor/manager, accounting

OH 5-21

Managing Credit Procedures

Used when: Incorrect price Back order Short weight Product rejected

Forward to accounting

Follow up with vendor

OH 5-22

Payment Procedures

Verify invoice information No quantity or price difference All extension correct

Pay invoice By Invoice By Statement – example page 209

Mark invoice paid (date, amount)

File for reference

OH 5-23

Petty Cash

Necessary evil!

Establish step by step control/process

Minor expenses

Keep secure and do not co-mingle with cash drawer

Balance daily

OH 5-24

Petty Cash

Completed and signed form

Receipts replaces cash

Secure Limit amount

in fund No borrowing Use

monitored by management

OH 5-25

Purchasing Evaluation

Reasons to Evaluate Purchasing Recognize importance of purchasing (25-35% of

costs)

Determine improvement benchmarks

Control costs

Monitor, measure and award positive behavior

Improve purchasing function

OH 5-26

Purchasing Evaluation continued

Step 1: Reduce product cost without sacrificing quality Step 2: Determine average costs and monitor Step 3: Quantity and price Step 4: Review standards/goals, strategies for improvement Step 5: Did corrective action resolve problem or further action

required

OH 5-27

Purchasing Goals and Evaluation Concerns

Purchasing goals should be developed based on desired results

OH 5-28

Operational Concerns

OH 5-29

Operational Concerns

On-going process of evaluation and improvement

Relationships with departments

Creative assistance

Effective purchasing policies and procedures

Vendor performance

OH 5-30

Review Your Learning

Questions on page 220 of text

OH 5-31

Key Terms

A item The more expensive items that an establishment purchases.

Audit trail A step-by-step record that traces financial data to their source.

Bar code A label that has numerous machine-readable rectangular bars and spaces arranged in a specific way to identify a product.

Bona fide occupational qualification (BFOQ) A job qualification legally judged reasonably necessary to safely or adequately perform a job.

Credit memo A document used to adjust information about product quantities or costs recorded on a delivery invoice.

OH 5-32

Key Terms

Extension (calculations) An arithmetic calculation made on a delivery invoice; for example, the item quantity and the unit price are multiplied to determine the total cost for each product.

Pallet A portable platform, or rack, typically made of wooden slats, used to store and move cases of products stacked on it.

Petty cash fund A small amount of cash on hand that is used to make relatively low-cost purchases.

Receiving A series of activities that ends with the transfer of product ownership from a vendor to a restaurant or foodservice operation.

OH 5-33

Tour of receiving area

Physical Receiving

OH 5-34

Inventory Book Set-Up

Unit of Measures Worksheet

Project: Standardized Recipes

Complete Chapter 1

Update Sign-up Sheets

Next week

OH 5-35

Complete Chapter 1

OH 5-36

Next Week Update Sign-up Sheets

Next week Read Chapter 2 & 3

Due: Inventory Sheet Set-Up

Due: Original recipe input onto recipe form

Due: Receiving Sheets