Every businessman follows the philosophy that it must be produced at the minimum cost to obtain the maximum benefit and for this he draws up strategies, creates programs, identifies suppliers, conducts market studies and endless actions that ultimately lead to negotiation and signing. of contracts in which agreements are established.
When I say that not everything that seems expensive is expensive, it is precisely due to the fact that this market study and identification of suppliers / suppliers will allow the entrepreneur to have various purchasing alternatives in which variables such as the quality and the price.
But the essence of the message is not directed especially at the price of product
but to its quality. Many times we get blinded by prices and impulsively agree to buy something that "apparently" is going to report a high contribution margin and we do not value its quality. I have had the experience of sharing with entrepreneurs who have confessed to me that this has happened to them and when they arrive with their "cheap" product at the business, their performance is not what was expected.
You may consider the idea that what I express is inconsistent and you are right, but it is something I am doing intentionally, because the essence of the message is that The cheap or expensive of a product is not defined by that price but all the benefit that we can obtain from it.
And indeed that is my reasoning. A box of chicken with supplier “X” can cost me 10 times less than with supplier “Y”, however “X” offers it to me frozen and with all its entrails, which means that when it is defrosted and cleaned I lose the 50% of their weight and they are more than pigeon chickens; but "Y" offers it to me clean and defrosted, therefore, although with the viscera of "X" I could make other products, with "Y" I can offer the main product as I have listed it in my offer, with the promised weight and its performance is superior. Which product was cheaper for “X” or “Y”? that must be the Insights
"Behind every great company there is a good supplier"
Continuing with the popular proverb, one says that "behind every great man there is always a great woman ”
. In the business of services
If you do not have the support of a good supplier, all the efforts that are made will be affected if you lack the raw materials or products already produced to satisfy customer demand. And it is that the selection of suppliers comes to constitute an essential and obligatory act if you want to achieve success.
But long before selecting suppliers, because not all are the same or offer the same services, it is necessary to be very clear about why they decide to buy and take into account the variables that influence this decision. That is why the following questions should be answered before making any type of decision:
These are only some questions to consider, generally the main ones, but others may arise that must be analyzed in order to make decisions.
The very act of choosing a supplier among others is associated with the guarantee of stocks. When the supplier ensures the delivery of orders in the agreed time, without shortages and complying with the specifications that have been provided, a better customer service is guaranteed by being able to adequately respond to changes that may occur in demand and, with This, the variations in the production levels, avoiding interruptions in the service.
One of the techniques that is having great success for small and medium-sized companies, in which fluctuations in sales occur, is that of purchasing without inventories. Certain suppliers with department stores and in order to guarantee a stable clientele for their products offer consignment inventories, that is, you may need a certain quantity of a product, you do not have sufficient spaces and means for its conservation and it is the supplier himself who guarantees the above.
Likewise, many companies have chosen to finance themselves through external resources, which means that based on the agreements established between the company and the provider in relation to the payment period, the products are received but are not paid immediately, but that period itself that is established to pay off the debt allows the organization to ensure the sale of those resources, first, and then liquidate it.
In the current literature you can find other techniques that can be applied to purchase such as open orders, no invoice, electronic orders and funds transfers, among many others.
"Not for much early rises dawn earlier"
And continuing with the repertoire of sayings there I leave another that I will explain depending on the topic.
Generally, and a concern of the businessmen is how to guarantee those products that are in season (fruits, closed animals, etc.) Instinctively and considering their storage capacities, many resort to the act of making excessive purchases of those products that at a certain time of the year they tend to be scarce or suffer a high variation in their prices. Indeed, when that purchase occurs, the price for which they are purchased is quite low compared to what they will achieve in the future, but excess purchases have their consequences and can triple their value if an optimal policy is not applied.
My example is directed to those products to which the entrepreneurs focus their attention given the scarcity that occurs from them at a certain time and for which they do not take into consideration such important issues as their conservation and time. In the following table, in a very synthetic way I expose what in my opinion can condition purchases.
In essence, my message in this section is aimed at Being authentic in the offers does not mean giving what is scarce at the moment, but giving what you have differently.
He who plans his expenses, good purchases shelter him.
Summarizing so far, you will be able to see that without using very scientific terms or complex calculations we have expressed the idea that sometimes we focus on applying theories described in the great books and leave aside the small details that added together. one can generate great conflicts.
Likewise you must have noticed that in the title we also talk about spending, which together with knowing how to buy comes to become a benefit for the organization. And it certainly is. Buying and Spending are terms that go hand in hand, they are almost a marriage that if not properly conducted will end in divorce. When you buy you are spending and it is a law of life that this act occurs simultaneously.
There are many tools and authors that offer theoretical solutions to spending problems. But we all address one in common: the planning. If these are not planned, we will be wandering through a labyrinth, without the famous Ariadna thread, trying to beat the Minotaur of profitability.
It is impossible to disassociate from this issue of logistics. It is that she very accurately studies all those aspects related to purchases, offering options so that they can be carried out at the lowest possible cost and obtain the maximum profit. In other articles I have exposed the formulas that allow us to obtain information about the optimal order quantity, as well as the Insights
that can be derived by presenting various states of nature and various strategic
alternatives, I invite you to review them, but certainly today I move away from them to expose issues that are rarely discussed, that occur frequently and that we ignore until it affects us. Therefore, if it has not happened to you, be aware because you may be a victim of it and not have noticed.
For example: You establish a raw material purchasing program so that they can be processed in the kitchen
or at the bar and generate a final product that will be consumed by the customer in the restaurant
. That is certainly the essence of our purpose, to provide sales points with the necessary resources so that they can produce income. And so, whenever exhaustions occur, a new purchase is generated and consequently new expenses are incurred.
A few years ago I had the opportunity to be part of a team of researchers who carried out a study in a restaurant
very profitable, highly marketed, but high expenses were noted in their reports. For some of the members of that team, it was normal that when such a sale took place, expenses of this magnitude were incurred. However, others were of the opinion that something was happening, and of course, being able to identify it would help the organization to ensure that these rates of income and expenses behaved properly, that is, the former were higher and the latter lower.
We follow a daily supervision program during one period and a surprise supervision program in the second stage of the investigation. Each member assumed a different responsibility: Some checked invoices and their corresponding entries to inventories, others checked detailed sales reports by orders against exits from inventories and some dedicated ourselves to only observing the work of members of the restaurant
The documentary checks were fine, but it was the observation that yielded the problem in question, would you like to know what happened?
Well look at you. The main expenses that were being generated and that constantly led to the purchase and replacement in the restaurant
, were associated with poor control and registration of expendable materials. (Napkins, straws, removers and many others), as well as the uses of those that constituted elements of costs
like the mini doses of sugar, salt, oil and vinegar from the angarillas, the flour that was sprinkled on bread and pizza dough preparations, to give a couple of examples. It happened that since they are expendable materials or indivisible raw materials, they were charged to the entity's cost and expense account once they were received at the point of sale.
While the accounting department assumed that expense in the established cost center, the use of the same was not as it was considered. In some points of sale these were surplus and in others they were scarce. Where they were left over, as they were already considered worn out, they were given different uses and destinations, to give an example, we found napkins such as toilet paper in the employees' bathrooms. No transfers of removers and straws were made at a point to those where exhaustion occurred, but the latter processed a new order for them.
The technical data sheets of the dishes did not report minimum and maximum amounts of complementary raw materials for the preparation. The calculations for spills of the drinks in milliliters or the amounts of flour, sugar and salt were added to the expense without taking into account whether they were produced or not. In this way, sellers were given the opportunity to obtain an extra profit for something that was going to create a problem. Certain sales that occurred were not recorded as there were surplus products and the company had to replace them.
What was the solution?
Well, have you heard something called Kitchen
o Relevé. Once the stage of Insights
We proceeded to carry out all the closings of the points of sale during a fortnight, enough time to measure the variation in expenses at the points of sale and make the necessary comparisons in the same period.
We developed a sheet that collected the description of all the raw materials and expendable materials that were in the points of sale. We instructed the accounting department not to record the expense upon receipt but to do so once they occurred. We participated in the elaboration of those products such as pizza and bread sticks to measure the weight of the raw materials that constituted an ancillary expense in their elaboration and thus, detail by detail, we obtained at the end of the day of operations a real existence of the products.
In this way we check the following:
Beverage spillage did not always occur, therefore the values that were set per drink served had to be reduced by 50%.
The final stocks of mini doses and auxiliary materials were counted and we were able to verify that the expense reports for this concept exceeded 70% of the current reality.
We contrasted that the reported sales for cocktails were lower than the consumption of straws, stirrers and coasters.
That disposable coasters were discarded after the sale of a cocktail, when they were recyclable. However, we suggest that the entity replace these with personalized and non-disposable coasters, so that due to this concept, there are no long-term replacements.
That the salt and oil products were inadequately regulated, that the ideal would be at the end of the work shift to reflect in this document the final existence to deduct the actual expense on the day and compare it with the sales made.
These are just some of the details that we could observe, those that I have exposed have been only to argue my theory that to be able to buy you have to know how to spend. If I told him that other areas of expenses were affected by the misuse that their members gave them, such as an employee communicating with another by phone from one office to another being only 5 meters away. Copies of the same document were reproduced in different departments, and thus there would be little space to give more details.
In essence, dear reader and administrator of restaurants
To close how I started, I use the famous saying that penny to penny you get to the weight
and is that sometimes we concentrate control on the most expensive resources and we do not stop to evaluate the use of those that apparently will not affect our finances.
Finally, I hope that the message has arrived, that we cannot focus on buying what we do not know how to save or use properly. It is everyone's responsibility to take care of what everyone gives us daily bread.