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Assessment 3

Report - Sourcing a Supplier

<Name>

<Submission date>
Introduction

In the capacity as the Head Chef of the Steakhouse restaurant, my current task is to source a new
meat supplier. A research was undertaken to shortlist and selects the meat supplier. Potentially
three meat suppliers were shortlisted who could qualify as our designated supplier. An analysis
and comparison was done amongst the three of them so as to select the best of three. The ideal
supplier must be able to provide the required steaks for our restaurant. The quality supplied must
match our standards and the supplies must not be delayed. Moreover the supplies must be at
reasonable cost. If the supplier matches our criteria then this supplier would be finally selected
and the contract would be signed with the supplier for at least three years, and the contact could
be extended or terminated based on the performance delivered.

Requirements

Our restaurant is one of the best steak suppliers in the region. We specialize in the steaks and we
are known and reputed for our variety of Sirloin, Rib Eye, T-Bone and Tenderloin. As there is a
stable demand for our variety, so it was estimated that per week we would require no less than 55
Sirloin, 40 Rib-Eye, 155 T-Bone & 110Tenderloin. Our restaurant has the policy to order at least
10 per cent more than the forecasted requirement. It is not good to store lot more than what is
required as we do not want to over-store a perishable item. There are chances f getting it stale
and low in quality and risky in consumption. In fact there is a policy in place that beyond a
certain time, if an item is not sold it is disposed off. Hence, the experience is that 10 per cent
more of what is actually required is safe as there can be errors in the forecasting. Basically the
forecasting is done on the basis of moving averages. Any type of forecasting cannot accurately
predict the demand. Sometimes we get more than the expected orders and the restaurant policy is
that the customers must not go just because the item was not available. It is alright for the
restaurant to bear the wastes rather than a customer returned de to non-availability of the product
he wanted to order. One more clause was also put under selection that apart from the regular
requisition, a supplier should be able to supply the products at an express request.
Selection criteria

There are many steak suppliers nowadays, and thanks to internet and the improvement in supply
chain and logistics, many new entrants in this area appear with a promise to match the demand
and requisitions in desired time and with good quality. The policy of the restaurant was however
that the supplier must have an experience of over 3 years so that we can actually take th review
of the past supplies and the way the prospective supplier fulfilled the demand. The prospect must
have a very good feedback from the existing clients and the delivery must be timely and has
matched the quality specifications.

Other criteria were the proximity and the source of the supplies. The steaks must match the
desired quality specifications. Therefore, it is important that the supplier has the ready source for
its supplies and must be able to regularly fulfill our demand. The cash flow position of the
supplier is also important. It is good that the supplier has a very positive feedback in the market,
but if the financial position is not string then there are chances that the supplier may fail at some
given point in time. Frequently, this business requires lots of cash transactions as the supplier;s
own partners who source the meat to them may deal in the cash or in some manner through
which the supplier is able to pay money. Therefore liquidity is very important for the supplier
this needs a quick turnaround time so that the supplier is able to pay its dues and this is possible
only when he has a sound financial position and good cash flows as well as better professionally
managed company.

Another important measure is the price. Other things constant, the best supplier for the restaurant
would be the one who could match our requirement at the best price. There must be no
compromise on the quality and when there is a bulk order they can also provide some discounts.
Flexibility is an important deciding factor as during certain occasions there is a surge in the
demand. At that time the restaurant may like to increase the order or during a lean period
restaurant may reduce the quantities normally requisitioned. There can be other occasions also
where the restaurant would like to deviate from the normal orders and the supplier must agree to
be flexible with reasonable requirement. The supplier can also accommodate the change in the
agreed payment arrangements, if the exigency so arises. At times, due to some internal problems
or temporary non-availability of funds, the restaurant may like to delay the payments and the
supplies needs to show sufficient flexibility to accommodate any emergency as may arise.
Purchasing methods

A regular arrangement has to be made for the purchasing and payments. Restaurant prefers to
provide the payments after the quality department approves the quality of goods delivered. The
purchases have to be undertaken by the purchase department and as the requirement is stable so
the standing instructions are given to the supplier for a regular supply of items. The payments
could be done through some arrangements like ECS/EDP Link or through standing instructions
through the bank.

Competitive Quotes

Often more than one supplier can be selected for the ad hoc based requirements. On the festivals
there are bulk orders for this the one supplier cannot cater to all the needs. In that case if there
are more than one supplier as approved on board, then the competitive quotes can be invited so
that the bulk requirements can be fulfilled a the competitive prices. Competitive quotations are
can also be used for the smaller purchases when the competitive bidding is not practical. These
are known as competitive proposals (Kansas City Steaks, nd).

Supplier Selection based on the competitive Matrix and Merit

A competitive matrix was drawn through the top three shortlisted suppliers. From the various
supplier screening methods, the top three potential suppliers were selected and the scores were
given. The supplier who had the topmost score was selected and emplaned as the regular
supplier. Amongst the shortlisted suppliers, following emerged as the top 3 suppliers as listed
below:

SN Company

1 Astra Foods

2 Prime Steak Company

3 Russell Steak Supplier

A set of parameters were selected and the scores were given to each potential supplier against
each parameter. The parameters chose were Price, Flexibility, Feedback, Experience, Quality,
Financial Health & HACCP certification. Some of the suppliers were not having the
certifications and so they were outright rejected as the score for this parameter was purposely set
as 0 and 1. Those who did not have the certification secured 0 and were eliminated. The
shortlisted suppliers were having the certifications. The next important parameter was pricing
and the relative scores were given based on the price quoted by them for the contract (Astra
Foods, nd). Quality was also very significant parameter and they suppliers were assessed based
on the quality they have provided to their other clients. Similarly their rating was checked based
on the feedback they had received from their existing or past clients. The number of years they
had worked in this business provided them the score for their experience in the relevant business.
The overall assessment is presented below:

Parameters

Financial HACCP
SN Company Price Flexibility Feedback Experience Quality Health certification Total
1 Astra Foods 7 8 8 9 9 9 1 51
Prime Steak
2 Company 8 7 9 8 7 8 1 48
3 Russell Steak Supplier 9 9 8 8 8 6 1 49

The suppliers were assessed on the scale of 1 to 10, 1 being the least value and 10 being the
highest. The supplier Astra Foods came out as the leader among the suppliers and therefore
qualified as the regular contractor for all the supplies to the restaurant. The other 2 suppliers also
follow close behind and were empanelled so that their supplies can be ordered as and when
required. They were also found to be suitable to fulfill the bulk order or the short irregular based
supplies, Thus, all three are considered as the valuable suppliers for the restaurant and one
another benefit of having more than one supplier empanelled is that if the main supplier defaults
then the restaurant already has the recourse to fall back to the other suppliers (Donald Russell,
nd).

Conclusion

This is how the valuation was done for these suppliers. The parameters were most relevant to the
supplier selection and the templates were preserved to use it for similar selection in the future.
The contracts were signed with the selected suppliers so that in the case of default appropriate
action can be undertaken. This comes out as a very durable and ribust selection process so that
even if there is a default then the services of the restaurant would not get affected.

References

Astra Foods (nd) Taste a Philadelphia Tradition. Retrieved from http://www.astrafoods.com/

Donald Russell(nd). Frozen to Lock in flavor. Retrieved from http://www.donaldrussell.com/

Kansas City Steaks (nd). Kansas city Steak Company. Retrieved from
https://www.kansascitysteaks.com/

Appendix

Super Trimmed™ Filet Mignon

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Super Trimmed™ Filet Mignon is most popular steak. Butter-tender, cut from the center of the
finest aged tenderloin and hand selected from premium corn-fed Midwestern beef.

Kansas City Strip

4.4 (189 Reviews)

$54.95 - $244.95

Kansas City Strip Steaks are world famous for rich steak flavor. Named for the city where they
originated, Kansas City Strip Steaks are from the world's finest beef for delicious, boneless
perfection.

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4.8 (52 Reviews)


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Two unique and delicious steak experiences:

Super Trimmed™ Filet Mignon

Kansas City Strips

Beef Steaks

Grass fed, traditionally matured on the bone and hand cut by butchers who passionately uphold
the standards of craft butchery. Donald Russell beef steak is a deep red colour, has a superior
texture and outstanding flavour. From the 'Big 4' of fillet, sirloin, rump and ribeye, to steakhouse
and restaurant favourites like flat iron steak and chuck eye - they're all here ...

Beef Steak Offers

some suggestions at a good price worth...

View Fillet Steaks

Fillet Steaks

Matured for 21 days...

View Sirloin Steaks

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Most popular in the UK...

View Ribeye Steaks

Ribeye Steaks

The Butcher's favourite...

View Rump Steaks

Rump Steaks
Aged for a full 35 days , lean, guilt free steaks!...

Steaks

Beef

Fillet Steaks

Sirloin Steaks

Ribeye Steaks

Rump Steaks

Lamb

Pork

Veal

Bone-in Speciality

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