Foodservice equipment buyers that want to generate maximum value from their supply chain can do so without having to play hard ball, writes Nigel Crunden of Office Depot.
The catering industry is estimated to generate in excess of £4.25 billion in turnover for the UK. It is a highly valued contributor to the economy and, at a time when the industry is growing, foodservice management businesses must constantly strive to ensure they are gaining the best deal from the suppliers that they work with.
While price and quality of goods are important factors in the buying process, it is arguably as significant for those in the sector to ensure a balanced and healthy working relationship is in place with equipment suppliers to drive efficiencies and innovation from both sides.
Catering businesses must realise the value of forging strong relationships with suppliers to create what should be a mutually-beneficial relationship to open up opportunities on both sides of the fence.
It goes without saying that buyers should be procuring from a supplier that possesses knowledge of the catering industry, but establishing a close relationship with suppliers will allow the supplier to develop bespoke solutions for partner businesses and ultimately support growth.
The art of maintaining a healthy buyer-supplier relationship
At the heart of good supply chain management is the ability to work with suppliers and encourage them to go above and beyond their remit. One key tactic for ensuring a long and productive working relationship is to agree a set of key performance indicators (KPIs) with your supplier before signing off any contract.
Seek out dedicated suppliers that not only want to grow with you but look beyond core objectives. A proactive supplier is one that understands the needs of its clients’ customers and what the business hopes to achieve — one that is willing to go the extra mile is worth keeping.
Maintaining strong supplier-client relationships makes certain that suppliers do not hold back potential business growth. Equally, on the other side of the fence, it is about ensuring that suppliers get a fair deal for their goods and services. Transparency is important when it comes to a balanced buyer-supplier relationship to make certain that both businesses are benefitting from the partnership.
Only recently, supermarket giant Tesco announced plans to reform the way it works with suppliers in a bid to make the supermarket industry more open and so that suppliers’ products and services aren’t becoming devalued. In a post-recession economic climate, it can be tempting for buyers to drive a harder bargain with suppliers but pushing vendors too far could have a knock-on effect on the business’ reputation.
The supermarket industry has been in the spotlight for forcing dairy farmers into cutting prices of their produce. What buyers of catering equipment can learn from this is how to manage loyalties within the supply chain and that it is not best practice to put unfair pressures on suppliers to gain an advantage.
Quality control measures are another step businesses can implement to ensure regular communication is taking place between buyers and suppliers. This can allow both businesses to provide regular updates on growth, outlook and challenges for the future so that any supply chain kinks can be ironed out and best practice is shared.
For larger companies in the food management sector, it can be easy to lose sight of the whole supply base when dealing with numerous suppliers and distributors. Working closely with suppliers and having regular contact ensures excellent supply chain management. However, this is easier to control when fewer suppliers are selected to drive growth and that’s what catering businesses should be striving for in this flourishing market place.
It has been well-documented that rising energy costs are impacting on overheads for many restaurants, pubs and coffee shops. Sustainability targets and driving efficiencies in the supply management process is therefore becoming increasingly important for businesses to work out where savings can be made.
Equally, when it comes to meeting energy and carbon reduction targets, check that a supplier’s culture is in line with your organisation’s. Being clear from the outset that your business is thinking laterally and wants to work with suppliers to calculate where savings can be made in the supply chain could relieve some of the pressures from factors out of your control, such as soaring energy prices.
In summary, the buyer-supplier relationship should be an open and equal one where both partners understand in which direction the other is heading. Responsible businesses understand that it can be detrimental to hide parts of the supply base and this is where plans and core values that are led from the top can easily stray.
Nigel Crunden is a business specialist at Office Depot UK, a leading global provider of workplace supplies and solutions. Office Depot services customers through 1,629 worldwide retail stores, a dedicated sales force, catalogues and e-commerce operations. https://online.officedepot.co.uk