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Importance of supplier: For some managers, supplier selection options are limited. Specially buyers in isolated areas, even in major metropolitan areas buyers option may be limited since manufacturers grant exclusive territories as in large specialized branded items. This create a seller's market in which manager's decision becomes one accepting a product or revising the menu excusing the need of the product. (1) Informal buying methods: Products are expensive and operating problem arise when products are purchased in incorrect quantities. Therefore an organized method should be used. Some purchasers may order regularly from the same supplier. Because they have complete trust in the supplier, they may use very informal method of buying e.g. they may call in an order without making any enquiry, agreement etc. These types of purchasing are usually ineffective and often lead to errors. (2) Formal buying system: In this systems they maintain all the formal records like:1.
2. 3. 4. 5.
Quality requirements are identified in standard purchase specification (SPS). Copy is given to the supplier of SPS for defined quality as per the price. Contracts or agreements are made. Suppliers are asked to respond to price quotation so that it can be used in purchase order. Purchase orders are made for delivery.
CHARACTERISTICS OF SUPPLIER: 1. 2. 3. 4. The supplier must have the capability and commitment to perform well. The supplier must provide timely information regarding price changes. The supplier must understand the market served by the operation. The supplier must be able to consistently provide proper quality and quantity of product. 5. Supplier should inform buyers as to new or improved products. 6. Supplier must have interest in improving products and service provided.
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Supplier must be professional. It should be easy to follow up on problems and to resolve difficulties that arises and to negotiate. 8. Supplier must be concerned that facilities meet or exceed accepted level of satisfaction. 9. The supplier must be financially capable of growing.
IDENTIFICATION OF SUPPLIER: The objective is to have as few suppliers as possible yet still obtain the desired levels of quantity, service and price. Experienced hospitality managers typically are aware of the suppliers who carry the products required, but they may not be aware of the best sources of supply. Among the techniques to identify supply sources are the following. 1. Previous experience, what has been the operator's experience with suppliers. Is it good or bad by contrast, experiences suggest the need to identify other sources of supply. 2. Sales representative-knowledgeable sales people will know who the best suppliers are within the territory. 3. Written information: Many suppliers issue catalog, descriptive brochure and related information, which can help. 4. Trade publications-suppliers often advertise in journal and news papers. 5. Trade exhibits and conventions. 6. Competitors during visits with competitors at professional meetings, trade shows etc; operators can get answers to specific questions regarding sources of particular items. 7. References- The supplier should be able to provide a list of reputable references. DEALING WITH NEW SUPPLIERS: Purchases should not be afraid to purchase from other than established suppliers. Many professional purchasers initiate trail or sample orders with a new supplier. In order to reduce the possibility of surprises during initial order, detailed agreement should be made between the buyer and supplier about the products; quality; quantity, time of delivery and related concerns. Reference should be requested of the new supplier and then contracted. Purchasers should be aware that suppliers may offer large discounts and provide exceptional service as their business is developing.
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