How to save money when procuring your catering

4th November 2016 at 11:05
Funding
Whether your catering is inhouse or outsourced, there are some important considerations. Here are our top tips to help you cut costs
  • Align the school menu with seasonal offerings: these products will be cheaper than high-cost imported foods.
     
  • Replace branded offerings with own-brand, similar products which are cheaper.
     
  • Formal agreements: ensure your suppliers specify clearly their service level agreements and/or complete detailed procurement documents that clarify your product needs and service levels expected. Negotiate fixed prices for a fixed period.
     
  • Technology: invest in software that enables you to track purchasing spends and supplier invoices so that you can spot anomalies. Some software products update your stock levels so that you can order according to your needs.
     
  • Review suppliers: do they offer the best deals? Are cost increases due to market conditions or the supplier hoping to improve its profit margins? Consider joining buying consortia to negotiate better overall deals. Compare the costs/benefits of inhouse catering vs outsourcing:

Benefits to catering inhouse:

o  Retained profit.

o  Greater integration within the school.

o  Role-sharing/flexibility.

Limitations:

o  Greater financial risk if costs not managed effectively.

o  Potential lack of expertise.

o  Increased leadership time.

o  Potential for greater liabilities for employee costs.

Benefits to outsourcing:

o  Greater opportunity to optimise revenue and control costs.

o  Capped costs.

o  Specialist central support.

o  Legal responsibilities can pass to the third-party.

Limitations:

o  Not all cost savings and economies passed on to the school.

o  Lack of cultural fit.

o  Potentially reduced controls (but could be managed with service level agreements).

o  Increased management time monitoring contract performance.

o  Profit share/management fee paid to third party.

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