Best Purchasing Practices For Food Manufacturers

Purchasing Food ManufactuingYou’re deep into the supply chain and you are seeing firsthand that it branches out in endless directions. If you’re not careful, you could end up bleeding out money by overpaying for any given product. Here are some best practices to tighten your purchasing practices.

    1. Start with the right supplier. That means doing your homework. Who are their other customers? How do supplier reputations compare against each other? Should proximity be a consideration? Not all suppliers have the same standards, so don’t base your decision on cost alone.
    2. Know what you need and what you’re willing to pay. That’s not to say you should be rigid about negotiations, but you should know your budget and what you’re planning to purchase before engaging a supplier. Get multiple quotes for comparison. You could find a supplier that perfectly fits into your budget, or you might realize that you need to adjust your business model to be leaner.
    3. Keep the contract top of mind. Enter negotiations knowing your contract arms everyone involved with a certain amount of leverage. Make sure that you’re firm. If you have doubts that the deal will pay off, settle them or walk away. Your contract is also your best defense should things go south.
    4. Build a strong relationship. Behind the contract is another person with a job to do. Get to know the team on the other side. More than knowing the food supply demands involved, all parties should trust one another. You want a relationship that is cordial and friendly, but not at the expense of professionalism and high standards.
    5. Be willing to adapt. Not all circumstances are in your control or in the control of your supplier. As such, make sure your business model is agile enough to adapt if needed. That could mean having other supplier contacts in your back pocket, or it could mean ingredient replacements and other contract modifications.

With all of this in mind, be sure you’ve got a solid spend analysis program in place. This is especially important for large and growing manufacturers, as you’ll likely be juggling several vendors at once. It’s easy to let the process swamp you and lose on obvious savings. A spend analysis program will closely monitor when and where your money moves so that you can take advantage of efficiencies such as bulk purchases for some products or consolidating smaller orders. A thorough spend analysis program keeps constant watch over your spending and provides you with usable data regularly.

Further Reading: What’s behind the rise in demand for specialty foods? 

What Can PacMoore Do for Me?

At PacMoore, we specialize in food manufacturing from start to finish. We know the industry inside and out, and we know how to best serve your specific sector. Most importantly, we view customers as partners who share the same goal. To learn more about PacMoore’s food manufacturing and packaging solutions, and to find out how we can help you meet your business needs, contact us today.

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Nallely Ayala

Corporate Buyer

Nallely started at PacMoore in August 2017 as a Customer Account Manager and was promoted to Corporate Buyer in 2018. She attended Robert Morris University. Before joining PacMoore, she held various leadership roles within Starbucks and Luke Family of Brands.