Management: Developing a Purchasing Process

Introduction

It is no secret that developing a purchasing process is one of the most relevant and complex issues, especially when it comes to hospitality. The main purpose of this paper is to develop a new purchasing process for a single restaurant unit and demonstrate how new technologies and alterations affect the business. To develop a new process of election and procurement, it is needed to take a look at the present purchasing process and find out what exactly has to be erased, developed, or changed from A to Z to make the new lucrative purchasing process.

      1. A Brief Overview

  1. As it was mentioned above, for developing a new purchasing process, it is important to make a brief overview of current business of the global chain. This paper represents Burger King, that is also famous as BK. Burger King is a globally known chain of hamburger fast food restaurants based in Florida, United States. The chain was started up in the early 1950s named Insta-Burger King. Unfortunately, later in 1954, BK’s founders Kramer and Burns did not manage to run the business and got into financial difficulties. This company’s failure resulted in that two talented franchisors McLamore and Edgerton bought the whole business and renamed it. Over these years, Burger King changed dozens of owners and successfully went public in the early 2000s. In the end of 2010, Brazilian business holding 3G Capital acquired the major shares of Burger King. (Toussaint-Samat, 2009). Today BK is one of the most famous and popular fast food restaurant chains in the world. According to Forbes, it is the second in the list “The Best Global Fast Food Restaurant Chains” (Forbes, 2012).
  2. When it comes to the type of cuisine and theme of the BK, the main product of this restaurant is burger and all about it. The concept of the restaurant is that everyone is worth a good hamburger, and everyone can be a burger king – in addition, in each restaurant’s unit, everyone can get a paper crown that is branded as Burger King.
  3. According to the company’s official website, in 2014 Burger King had more than 14,400 restaurants all over the world; 52 of them are now held by the company, and the rest is franchised. The company runs the business in numerous countries, including the United States, France, Russia, Thailand, and many others. (Burger King’s official website, 2016)
  4. As for the average restaurant size, it constitutes from 2,800 to 3,500 square meters and provides average seating capacity from 90 to 100 customers. In addition, the majority of BK’s restaurants have drove-through service windows and convenient parking areas.
  5. The restaurant boasts of one of the widest choice of hamburgers and cheeseburgers among world’s fast food restaurants. Moreover, the Burger King’s menu boasts of French fries, hot dogs, salads, and sweets. The main BK’s proposition is value menus or season menus. In addition, the restaurant offers such drinks as Coca-Cola, Sprite, juices, milk, etc.

       2. Describing the Restaurant Chain’s Central Commissary

When it comes to Burger King’s election and procurement, this business does not have its own production, so the company supplies more than 90 per cent of its products.  First and foremost, BK supplies meat, vegetables and bread. Usually, the company picks top-of-the-lime manufacturers and suppliers, focusing on quality of the products. As for the price, due to the large scale of sales, the suppliers and Burger King manage to find the middle ground. The restaurant chain does not supply alcohol, fabric sweets, and it rarely supplies fish. Another good thing about such quality and organized procurement process is that the central commissary benefits a single restaurant unit with a clear structure of purchasing process. That is one of the reasons why there are thousands of people who want to start up a franchise business with Burger King – the single process is organized from A to Z, and it is easy to understand as A-B-C, although there are still some things to be altered.

  1. Developing a New Purchasing Process with New Technologies

To develop a new process of election and procurement, three technologies have been picked: storage management, product ordering and bar-code reader technologies. To begin with, restaurant storage management is probably the most important thing when it comes to the process of election, procurement and purchasing (Brown, 2003). The main problem in this issue is that each restaurant unit must have its own storage space and organization, which depends on the restaurant’s square and its facilities. BK has storage management system, but it is not electronic – all products are just tagged by their names. In addition, there is a problem when a new employee arrives – it takes much time to recognize where this or that product is kept. If BK’s storage management system is changed to electronic scheme, first of all, such optimization will save time. Second, it will save much money as an electronic storage management system will give a possibility to automatically find locations of any products (in a restaurant), to know how much is left (for example, how many liters of mils a restaurant has in rest), and, finally, all restaurant units will get a report on products spent. 

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The second feature to develop a new purchasing process for Burger King restaurant chain will be product ordering system. For the time being, the company lacks efficient analytics, and sometimes the chain orders more products that they actually need. The production ordering system, first and foremost, has to be fully online and gathered in a schedule. Endless phone calls and even e-mails only take time and distract employees from the main goal of the election and procurement process – optimizing the purchasing for the chain. The company has to build its own IT-scheme where all product ordering sections will be controlled. It will surely optimize the purchasing process, because everyone from customer manager to purchasing process manager will have an access to this system. This one will allow to keep the finger on the pulse and to order as many products as needed. In addition, all employees who have access to that system can leave comments of quality, advantages or disadvantages of the ones. Plus, using this system, the purchasing process manager can gather get-togethers to discuss election and procurement process alterations.

Last but not the least, the barcode scanner technology would be surely advantageous for the BK’s purchasing process. Needless to say, this one is one of the most popular, relevant and up-to-date issues applied to any successful and lucrative business. This technology is the best when it comes to optimization of the purchasing process. As mentioned about, both storage management and product ordering processes must be online or kept electronic and the bar code reader technology is probably the key tool that would help to organize and implement a new purchasing process. The barcode scanner technology can help business providing efficient and profitable way to manage all levels of business processes (Palmer, 2011). There is just one of thousands examples: a customer calls to a restaurant and asks if there would be some special hamburger in the next month or not. To find this out, the manager does not have to be aware of marketing issues. He can look though the upcoming procurement processes and using barcode find out the needed information about this or that product. Another example would be the client who comes to a restaurant and asks about this or that ingredient – as it often happens in fast food chains. Using bar-code reader technology in purchasing process, the manager will surely answer about any ingredient in Burger King’s menu.

  1. How the New Process Abides by Major Purchasing Objectives

When it comes to five major purchasing objectives, they are value for money or, in other words, revenue; long-term relationships with suppliers; constant evaluation; quality control; and minimizing the operation’s investment in restaurant’s inventory. As for providing a rationale for the value for money and minimizing the operation’s investment inventory objectives, it goes without saying that numbers of income are indicators of any business.

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All new technologies found in a new purchasing process: storage management, product ordering electronic system and bar code reading technology can surely help in optimizing and raising company’s revenue. In addition, they help to minimize and organize investments to inventory objectives. As for such major objectives as long-term relationships with suppliers, constant evaluation and quality control, all of them follow one rationale and two up-to-date technologies mentioned about – well-organized and properly used bar code reader technology and product ordering can organize a new purchasing process from A to Z as they help to control quality of current purchasing, keep a finger on the pulse when it comes to cooperation with suppliers and make constant evaluations to know the next direction.

Conclusion

In conclusion, Burger King is one of the leaders on the lucrative market of fast food restaurants; however, there are some whitespaces in its purchasing process that have to be corrected. The new purchasing process consists of such up-to-date and relevant technologies as storage management, bar code reader technology, and production ordering electronic system. All of them would help to organize and build a structure for a new election, procurement and purchasing products process that improves business at all levels and gives a raw of possibilities to raise company’s revenue.

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