Critically evaluate the role of purchasing and supply chain management in restaurant and bar operations while considering how this, and a proactive approach to cost control, can provide these businesses with competitive advantage in a crowded marketplace.
As per the view of Evranuz (2012), role of purchasing and supply chain management (SCM) assists in becoming potential and valuable way of securing competitive advantage in order to enhance the business performance (Evranuz, 2012). It is essential for food and beverage business to maintain good relationship with suppliers by providing them timely payment so that they deliver best services to businesses. However, Lui and Lai (2010), argued that purchasing department within the food and beverage business began to realize that it is not enough to enhance the supply chain of business and attain competitive advantage. It can be evaluate that supply chain and transportation network design technology assists in enabling food and beverage companies to stimulate SCM and reduce the cost and attain competitive edge over rivals (Lui and Lai, 2010).
According to Rutherford (2010), within food and beverage (F&B) industry, manufacturing strategy is one of the crucial decision that firms face and thus it helps in making and distributing their products so that best decisions can be taken. Another crucial decision within such stage is that different challenges faced by F&B operations in relation to lower down the cost operations so that competitive edge can be attained in marketplace (Rutherford, 2010). Companies focuses upon tapping target market and providing them low price food and beverage options so that it gains high profits and success. There are different factors that helps in reducing the cost factors such as transportation, inventory, raw material costs and tax etc. Tsai (2012), stated that it is also essential for firm to implement innovative technology so that they can serve the customers effectively and attain satisfaction. Further, through adopting merger and acquisition strategy it assists in integrating new supply chains into an existing network so that such initiatives fails to meet the expectations of shareholders (Tsai, 2012).
As per the Bottani and Galati (2010), F&B companies also focuses upon undertaking merger and acquisition strategy so that they can develop a new business supply chain initiatives which fail to meet the needs of shareholders. It can be assessed that food and beverage companies mainly try to minimize their cost so that competitive advantage can be attained. Furthermore, using cost to serve analysis is the best method through which food and beverage businesses identifies the value of the product and thus decide the price so that profits can be attained. Here, purchasing and supply chain department plays a crucial role in identifying the cost of the products which needs to be lower down so that competitive edge can be attained over rivals (Bottani and Galati, 2010). In the current era of globalisation, there are various competitors available within food industry which give tough competition to each other. Therefore, it is essential for businesses to introduce innovative products or control its cost so that target market can be attracted towards firm in order to enhance the market share (Díez-Leturia and García-Jalón, 2011).
McGinnis and Kraak (2006), stated that F&B businesses plans to improve its production capacity planning by utilizing existing capacity for lowest total cost so that firm can perform more effectively in order to produce quality good and bar products in order to enhance customer base. Firm also aims to lower down its cost and ensure producing fresh products so that quality of firm can be enhanced among rivals and attain competitive edge (McGinnis and Kraak, 2006). Food and beverage industry identifies the significance of fostering an environment that stresses the best communication and teamwork among all the departments within the firm. Hotel business involves purchasing and supply chain management as an crucial department that helps in controlling the cost so that supportive and collaborative environment allows business to support each other while working towards department and company goals. However, Suh and Eves (2010), argued that supply chain is used in order to describe the collaboration of different businesses in regard to assist firms and move products or services from suppliers to customers. Food and bar options involves different suppliers of raw materials, producers of final products and the end users in regard to develop relationship with suppliers and purchasers so that it does not impact upon the overall success of firm. Adopting cost control measures and advantages obtained from building best relationship and partnership in the industry helps in attaining desired success (Suh and Eves, 2010).
Further, F&B business aims to develop purchasing functions by adopting effective raw materials and develop relationship so that best responsibilities can be attained. Here, in order to reduce cost, company identified different supplier opportunities and paying attention to industry trends and develops new products so that competitive edge can be attained over rivals (Julien, 2011). Hence, it is crucial option that helps firm to focus upon through purchasing and attaining supply options so that cost can be minimized in relation to obtain success. Hotel businesses focuses upon their purchasing and supply chain management in restaurant and bar operations so that it assists them to control the cost within firm and thus provides chance to firm to obtain competitive edge in terms of high market share as stated (Davis and et.al., 2012). Food and bar operations within hospitality firm aims upon managing its purchasing and supply chain management functions so that they can carry out the best responsibility towards firm and satisfy individual needs. For instance, purchasing raw material assists in identifying the development of new raw materials in order to develop product development professionals so that best relationship can be developed (Dimitriadis and Stevens, 2008).
As per the opinion of Drake and et.al., (2013), internal relations assists in identifying the different business functions which must work together in order to achieve maximum efficiency and thus attain optimal profits. Hence, the purchasing department should work with the accounting and finance department in order to secure the funds and track payments for material purchases and try to minize3 cost so that competitive edge over rivals can be attained (Drake and et.al., 2013). However, Ferreira and et. al. (2012), argued that purchasing department must also work with production and forecasting teams in order to make sure that they timely delivery of materials and thus involve marketing and sales department so that hotel can enhance its market image and thus improve the efficiency so that desired goals can be attained (Ferreira and et. al. 2012).
Moreover, in order to maintain customer satisfaction helps in attaining ultimate goal so that change can be implemented within marketplace and attain customer service. French, Story and Fulkerson (2002), stated by firm possess the ability to adopt essential information and desired products in order to give tough competition to rivals in the market. Also, businesses are able to obtain effective food and service department helps in improving the business success. Attaining competitive advantage helps business to enhance the market share and attain satisfaction (French, Story and Fulkerson, 2002). Purchasing department is responsible for procuring supplies and thus it largely involves order placing and influences the people to improve the market share. However, Gomes and Lobstein (2011), argued that purchasing and supply chain within restaurant and bar operations assists in improving the competitive advantage so that success can be attained in an effective way. Business uses effective purchasing and supply chain so that cost control needs to be practised in relation to attain satisfaction. Another crucial role of the purchasing department is the source supplies and parts and then purchase them so that business decides to purchase the raw material in such way that helps in lowering down the cost in order to improve the efficiency of firm in market (Gomes and Lobstein, 2011).
As per Gootman, McGinnis and Kraak (2006), food and bar operations are required to manager supplier relationship and negotiate contracts for the supplies so that they are responsible for monitoring the supplier's performance. Purchasing department needs to assess the suppliers' performance and quality control in order to monitor deliver times, quality, cost and performance so that best results can be attained. Here, suppliers helps in maintaining effective relationship with the environment so that working conditions can be improved in relation to enhance the performance targets and thus improve the training and development program in order to attain desired results (Gootman, McGinnis and Kraak, 2006). Moreover, purchasing department undertakes cost control measures in order to enhance the performance and thus responsible for maintaining strict cost control measures so that purchasing raw material for hotel assists in enhancing the sales and profitable of firm. However, Man, Lui and Lai (2010), argued that firm aims to buy the products at best price therefore purchasing department requires ensuring suppliers themselves to get the lower cost and thus enhance the sales and profitability of firm. Further, it assesses that purchasing department needs to be aware regarding applying the purchasing and supply chain management so that effective regulation can be developed in order to attain desired results. It is also essential for the purchasing department to be aware of all the different laws that could be applied to the purchasing of raw material within firm. For private firms, it is the primarily contract law that helps in benefiting the government bodies in order to regulate the purchase so that competitive advantage can be attained (Man, Lui and L