By the end of this chapter, you will be able to:
Mastering these skills will help you control costs effectively and keep your workplace running smoothly, making you a valuable part of any food and beverage team!
Performing food and beverage purchasing and receiving procedures is a critical function in the hospitality industry, especially for professionals managing operations in Kenya's dynamic food service sector. Effective purchasing ensures that establishments such as hotels, restaurants, and catering services maintain quality, control costs, and meet customer expectations. This chapter explores the fundamental concepts, principles, and processes involved in purchasing and receiving food and beverage supplies, equipping learners with essential skills to optimize procurement functions.
Purchasing in food and beverage operations is the planned buying of food, beverages and other supplies of the right quality, in the right quantity, at the right price, from the right supplier and at the right time. It is the first stage of the control cycle: whatever is bought badly cannot be put right later by good storage, cooking or service, and money lost through careless buying is lost from profit. A sound purchasing system therefore sets clear standards, uses written documents at every step, chooses suppliers carefully and uses the buying method that suits each type of item. Example: the catering department of a referral hospital in Machakos buys fresh vegetables on a weekly quotation list, dry goods on a six-month contract and small emergency items for cash, each under written procedures.
Purchasing and receiving use a set of terms that every member of the control team must understand in the same way, because orders, specifications and records depend on them. The three key terms are defined below.
Purchasing is the function of obtaining the food, beverages, equipment and supplies an establishment needs, of the required quality and quantity, at the best price, from reliable suppliers and in time for production and service. It covers identifying needs, finding and selecting suppliers, ordering, following up and paying, and it applies to both food (perishable and non-perishable) and beverages (alcoholic and non-alcoholic).
Receiving is the process of checking goods delivered against the purchase order and the standard purchase specification for quantity, quality and price, accepting or rejecting them, recording them and moving them promptly to storage or the user department. Good receiving makes sure the establishment gets exactly what it ordered and pays only for what it accepted.
A standard purchase specification is a written, detailed description of an item the establishment buys regularly, stating the exact quality, size, grade, weight, packaging and condition required. It is the standard against which suppliers quote and against which deliveries are checked, so the same product is received every time whichever supplier delivers it. Example: a specification for beef may state "beef topside, Grade 1, chilled to 1 to 4 degrees Celsius, fat cover not more than 1 cm, delivered vacuum packed in pieces of 3 to 4 kg".
Purchasing controls the largest single cost in most food and beverage operations, the cost of materials, which commonly takes 25 to 40 per cent of sales. Its effect is felt in quality, cost and service.
Effective purchasing is guided by a set of principles, often summarised as buying the right item, in the right quantity, of the right quality, at the right price, from the right source and at the right time. These principles keep the buyer focused on value rather than simply on the lowest price.
The purchasing officer manages the buying function on behalf of the establishment and is accountable for getting value for money while meeting the needs of the kitchen, bar and other user departments.
The purchasing procedure is the fixed sequence of steps an establishment follows from the moment a need is identified until the supplier is paid. Following the same steps every time creates a document trail and prevents unauthorised buying.
Purchasing documents give written authority for each step, communicate exact requirements to suppliers and leave an audit trail. Each document has a set purpose and is usually pre-numbered so that missing copies can be detected.
The purchase specification is the document sent to suppliers, or attached to a letter of inquiry or contract, describing the exact item required. A good specification states:
A purchase requisition is an internal request from the store or a user department to the purchasing officer to buy goods that are not in stock or have reached the reorder level. It states the item, quantity, specification, date required and the department, and must be signed by an authorised person before any order is placed. It is the starting point of every purchase and the proof that the purchase was needed.
A food requisition is the document a kitchen or food outlet uses to request food items. It may be a store requisition for items already held in stock, or a request to buy perishables such as meat, fish, vegetables and dairy products that are bought for immediate use. It lists each item, its unit, quantity and, once priced, its cost, so that the cost of food issued to each outlet can be calculated.
A beverage requisition is the document a bar or other beverage outlet uses to request drinks, usually from the cellar. It lists each brand, bottle size and quantity, and in most establishments a full bottle is issued only in exchange for an empty one of the same brand, so the requisition also serves to control stock in the bar. It is signed by the bar head and the cellarman.
A letter of inquiry is a formal letter or email from the purchasing officer to possible suppliers asking whether they can supply stated goods, and on what terms. It attaches or states the specification and quantity and asks for the price, discounts, delivery schedule, payment terms and validity period of the offer. Sending the same letter to several suppliers ensures they all quote for the same thing.
A quotation is the supplier's written reply to a letter of inquiry, stating the price per unit, discounts, delivery terms, payment terms and how long the prices are valid. Quotations are entered side by side on a quotation comparison sheet so the purchasing officer can choose the best-value supplier and show management why that supplier was chosen.
Selecting suppliers means choosing, from all possible sources, the firms that can reliably supply goods that meet the establishment's specifications at a fair price. A poor supplier causes late deliveries, inconsistent quality and disputes, so suppliers are chosen with care and kept on an approved supplier list. Example: a teachers' training college in Kilifi visits every new fish supplier's premises to check the cold chain before placing the first order.
Supplier rating is the regular, measured assessment of each supplier's performance, so that buying decisions are based on records rather than opinion. Each supplier is scored on price, quality and delivery, the scores are weighted according to their importance to the establishment, and the total gives an overall rating used to keep, warn or drop suppliers.
Price performance measures how a supplier's prices compare with the lowest acceptable price available for the same specification. It is usually calculated as:
Price performance = lowest price quoted ÷ supplier's price × 100
A supplier charging Ksh 125 per kg when the lowest price is Ksh 120 scores:
Price performance = 120 ÷ 125 × 100
Price performance = 96 per cent
Quality performance measures how much of what a supplier delivers meets the specification and is accepted. It is calculated as:
Quality performance = quantity accepted ÷ quantity delivered × 100
A supplier who delivered 1,000 kg of tomatoes of which 950 kg were accepted scores 950 ÷ 1,000 × 100 = 95 per cent.
Delivery performance measures how often a supplier delivers the right quantity on the agreed date and time. It is calculated as:
Delivery performance = deliveries on time and complete ÷ total deliveries × 100
A supplier who made 18 of 20 deliveries on time scores 18 ÷ 20 × 100 = 90 per cent.
The three scores are combined using weights set by management. Example: a lodge in Narok gives price a weight of 40 per cent, quality 35 per cent and delivery 25 per cent, and compares two vegetable suppliers.
| Factor | Weight | Supplier A score | Supplier B score |
|---|---|---|---|
| Price performance | 40% | 100 (Ksh 120 per kg) | 96 (Ksh 125 per kg) |
| Quality performance | 35% | 95 | 99 |
| Delivery performance | 25% | 90 | 100 |
Supplier A rating = (100 × 0.40) + (95 × 0.35) + (90 × 0.25)
Supplier A rating = 40 + 33.25 + 22.5
Supplier A rating = 95.75 points
Supplier B rating = (96 × 0.40) + (99 × 0.35) + (100 × 0.25)
Supplier B rating = 38.4 + 34.65 + 25
Supplier B rating = 98.05 points
Supplier B is rated higher even though its price is Ksh 5 per kg more, because its better quality and reliable deliveries give better value overall.
The method of purchasing is the arrangement under which goods are ordered, priced and paid for. The right method depends on how perishable the item is, how much is used, how stable its price is and the size of the establishment, and most operations use several methods at once.
Cash purchasing means paying for goods at the time they are bought, by cash, mobile money or card, usually from petty cash or an imprest. It suits small, urgent or occasional purchases such as a few kilograms of herbs needed for a function, and purchases from small local producers who do not give credit. Each cash purchase must be supported by a receipt and entered in the petty cash book, because it is easy to abuse.
Under a contract the establishment and the supplier sign an agreement to supply stated goods, to a specification, at fixed or formula-based prices, over a set period such as six or twelve months. It suits items used regularly in large quantities, such as bread, milk, rice, flour and cooking oil. It secures supply and stable prices and saves the buyer from seeking quotations every week, but the buyer may lose if market prices fall below the contract price. Contracts in large organisations are often awarded after a tender, and may be blanket orders where the total quantity is agreed and deliveries are called off as needed.
The daily market list is used for highly perishable items such as fresh fish, vegetables, fruit and herbs, whose prices change daily. Each day the storekeeper and chef list the quantities needed for the next day; the buyer telephones or visits several suppliers, records their prices on the list, and orders each item from the supplier with the best price for the required quality. It keeps perishable stocks low and fresh but takes time every day.
Under the quotation list method, approved suppliers are asked to quote prices for a standard list of items, valid for a stated period: daily for the most perishable items, weekly for items such as eggs, poultry and dairy products, and fortnightly for semi-perishable items such as potatoes, onions and some dry goods. The prices are entered on a quotation comparison sheet, and orders during the period go to the supplier with the best value for each item. The method keeps prices competitive while reducing the work of daily price checks.
Cash and carry means that the buyer goes to a wholesale warehouse, selects the goods, pays on the spot and transports them back. Wholesale prices are lower than retail because the wholesaler does not deliver or give credit. It suits small establishments and emergency purchases, but the cost of transport and the buyer's time must be counted, and receiving controls must still be applied when the goods arrive.
Under the paid reserve method the establishment buys a large quantity of an item when the price is favourable, pays for it in advance, and the supplier keeps it in its own store and delivers it in agreed lots as needed. It is used for items whose prices are expected to rise, seasonal items and items such as wines or imported products where supply may be short. The buyer gains a lower price and secure supply without needing storage space, but ties up cash and must trust the supplier to hold the stock safely.
Total supply, also called one-stop buying, means that one supplier provides all or most of the establishment's requirements of a type, such as all dry goods or all cleaning materials. It reduces paperwork, deliveries and ordering time and gives the buyer strong bargaining power, but competition is lost and the establishment depends heavily on one supplier, so prices must be checked against the market from time to time.
Under the cost plus method the supplier charges the price it paid for the goods plus an agreed percentage or fixed mark-up to cover its handling and profit. The buyer has the right to inspect the supplier's own purchase invoices. It is used for items whose market price changes often, such as meat and fresh produce, and in long-term supply agreements; it is fair to both parties but requires trust and checking of the supplier's records.
Centralized purchasing means that one central purchasing department buys for all the units of a group, such as a hotel chain, a university with several campuses or a county's hospitals, rather than each unit buying for itself. Example: a supermarket chain with outlets in Kiambu and Ruiru buys flour, sugar and oil centrally for all its in-store cafés. The large combined orders earn bulk discounts and consistent quality, and specialist buyers can be employed; the disadvantages are less flexibility for individual units, extra transport and slower response to local needs.
Public hospitals, schools, colleges, prisons and county governments buy food and beverages under the Public Procurement and Asset Disposal Act, 2015, which adds formal methods to those above.
Create a free account to open more of this chapter.
Free: practical guides, quick cards, workplace scenarios and more.
Create a free accountThis chapter explores the essential processes involved in food and beverage purchasing and receiving procedures. It begins by defining key terms related to purchasing and receiving specifications, emphasizing the importance of purchasing in maintaining quality and cost control. The principles of effective purchasing are outlined alongside the critical duties of a purchasing officer, guiding the entire purchasing procedure supported by relevant documentation. Various methods of purchasing, including quotation lists and paid reserves, are examined to ensure transparency and value. The chapter then shifts focus to receiving objectives, detailing the delivery and receiving procedures, methods, and the importance of scheduling deliveries to maintain operational efficiency. It further covers the necessary documents involved in receiving, the specific practices for receiving food and beverages, and the significance of material tagging. Finally, the chapter discusses the dispatching process to stores and user departments, completing the cycle from procurement to storage and usage.
At the start of this chapter we promised you would be able to:
Tick each one you can genuinely do.
So, are you there yet?
You're competent when you can confidently do 50% or more of what this chapter promised.
Sign in to record how you're doing.