Posts tagged Controlling Food Costs
What Is An Order Guide? And Why You Should Request + Review Them Regularly
 
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Last week I discussed the Top 5 Benefits of Using a Custom Order Guide, and I got a few questions about what exactly an Order Guide is and why they are an important tool for Chefs + Buyers. So, here is some basic and essential information regarding what an Order Guide is, how to obtain them and why it's so important to request and review them regularly. 

WHAT IS AN ORDER GUIDE? 

An Order Guide is a report of all of the items you have purchased (or plan to purchase) from a vendor, and the associated pricing. 
Each vendor you work with (your produce vendor, meat vendor, seafood vendor, cheese vendor, cleaning + supplies vendor, etc.) typically creates an Order Guide for your business at the beginning of your relationship based on the specifics you give them about the items you want to order and the volume in which you'll be ordering them. 

For example, if you've indicated that you want only Bellwether Farm's Ricotta cheese, that information will be stored in your Order Guide so when you request "Ricotta", the vendor knows which brand of Ricotta to send you.
The guide also includes the price you pay for that Ricotta. It is true that not all businesses pay the same price for a product ~ depending on the volume of product that you purchase or your overall spend, you will pay more or less for a product than your neighbor. To ensure that you are charged the appropriate price, vendors create Order Guides for each of their customers. As time goes on and you purchase additional items that were not in your original order guide, they are added.

After working with a vendor for a few months, you can request an Order Guide for a stated timeframe. Unlike the initial Order Guide the vendor created, this will show the count of each item that you ordered within the stated time frame, the total spend per product, any price changes etc.  I'll discuss the importance and benefits of reviewing your Order Guide regularly below.
 

How DO YOU OBTAIN AN Order Guide?

Obtaining order guides is very easy.  Simply request one from you sales representative(s) and specify the date range that you want the guide to show. The last 3-6 months is generally a good place to start, especially if you are a seasonal restaurant.  

If you are a fairly new business, or you are just getting started with a new vendor, ask to meet with your sales representative and detail the products that you would like to source from them.  Be very specific about the brand, quality and unit size that you desire for each product, and your best estimate of how much you'll order per month. Your rep will take this information back to their team and produce your order guide, complete with pricing. 
If you are exploring possible vendor partners, do this exercise with all the vendors you are considering working with then compare the product quality and pricing that each has offered to determine the best possible partners for your business. 

When you choose your vendors, hang on to the initial order guide(s) and in 3-6 months request your order guide history.  Compare your actual volume to your estimated volume, your actual costs to their initial quotes, and review items #1-5 below to see if there are any changes or requests you can make to save money without hindering product quality. 

Note: Many companies now offer online order systems that allow you to easily access your Order Guide or "Profile" with current pricing.   This is helpful for obtaining current pricing and reviewing the items in your Order Guide, but won't provide the order and pricing history that is necessary to obtain the benefits in items #2-5 below.


What are the Benefits of REQUESTING + Reviewing Your Order Guides? 

Reviewing your Order Guides regularly (or creating a Custom Order Guide) is key for making informed purchasing decisions and ensuring you are getting the best quality products at the best price. It also ensures that your vendors stay competitive and helps your business run smoothly.
Here’s how…

1. ENSURES THAT ONLY THE ITEMS YOU'VE SPECIFIED GET DELIVERED
Many clients have run into the problem where incorrect products are being delivered regularly and need to be returned.  The cause is most often that somewhere along the line their ideal product was unavailable and a substitution was delivered and accepted.  The substitute product was then added to the order guide and deemed an acceptable item for delivery by the vendor.  Resulting in the substitute product being delivered without notice.
Reviewing your order guide to remove any items that were mistakenly added will prevent the incorrect item from being delivered again in the future, unless absolutely necessary.
 

2. GIVES YOU THE ABILITY TO REQUEST VOLUME DISCOUNTS BASED ON ACTUAL PURCHASES
Vendors are unlikely to offer you a break in price without you asking for it.  Reviewing your order guides regularly and understanding the volume you are using allows you to recognize if your order volume has increased for a particular item, and if it has you may be able to request a volume discount. 
 

3. HELPS IDENTIFY IF BULK PURCHASING CAN SAVE YOU MONEY
In reviewing your order guide, you may see that you're using an average of, let's say 15# of garlic per week. Frequently ordering 3 to 5 5# containers rather than purchasing one 20# bulk case, which is less expensive per pound. You can make the switch and start saving money right away!  
Similarly, you may see that your monthly spend on mushrooms is very high compared to other items in your guide.  If the mushrooms aren't center of plate, or are being chopped up very small for a dish, you may be able to get #2 mushrooms from the same farm at a lower price, because they are broken or a less desirable size ~ both of which are fine for your use. This change will also save you money without affecting the quality of your finished product.
 

4. ALLOWS YOU TO COMPARE PRICE + PRODUCT INFO WITH OTHER VENDORS
I am not an advocate for sharing order guides amongst vendors to obtain competitive pricing. I am however, an advocate for sharing the product info and current order volume that an order guide details with other vendors at least once a year to obtain their product availability and pricing, and then comparing it to current pricing. Hopping back and forth from vendor to vendor to get the best price is exhausting and won't lead to valuable long-term relationships.  Privately comparing prices and product availability across vendors and being open and honest about it, ensures that you continue to get the best product possible for your business at the best price, and keeps you informed. 
 

5. HELPFUL FOR CREATING INVENTORY + ORDERING TOOLS
Order guides are very helpful for creating inventory sheets - the sheets that list all the products you keep in inventory, their location in the kitchen, standard pars and who the items are ordered from. A well organized inventory sheet will allow your team to walk through the kitchen and storage areas just once, identifying inventory quantities and order needs, and enabling them to easily place orders by vendor directly from the sheet, or via the custom order guide template.
 

6. PROVIDES EVERYTHING YOU NEED TO CREATE A CUSTOMER ORDER GUIDE
A Custom Order Guide is resource that holds information about every item you source, from every vendor you work with,  with order unit, price and other important details, in a single location.  It is created by gathering your individual Order Guides and entering the product information into a Custom Order Guide Template (we call ours the Ultimate Ordering + Budgeting Tool).
In its most basic form it is a spreadsheet, but it is an extremely powerful spreadsheet utilized for ordering, receiving, price + product quality comparisons, tracking food costs, and creating an in-house seasonal guide.  
It can be a critical tool for success in your restaurant, catering company, brand, market or other food-driven business.  Learn more about Custom Order Guides and the benefits of utilizing one here


Got Your Guides, But Need Some Help?

Requesting and reviewing your order guides is pretty straight forward, but I know that Chefs and Business Owners often don't have the time to add another project to their list ~ regardless of the money-saving potential ~ there are simply too many fires that need your attention!  

Get in touch and we can set up a time to review your current vendors, order guides, usage patterns + pricing. If you’d like, I can also create a project plan for building your Custom Order Guide and offer suggestions for partner + pricing improvements.