FAQ

What is an Outsourced Purchasing Expert (OPE)?

An OPE is someone trained in the intricacies of purchasing, negotiation and problem solving with an eye to help you reduce cost and drive earnings to your bottom line. The OPE should be able to review all aspects of your purchasing programs to reduce expenditures, making certain that their recommendations in no way impact quality or service parameters. As you know, running a successful operation is a complex undertaking. Delegating the purchasing function to an OPE may allow you to better concentrate on running the other areas of your business.

An OPE can:

  • Increase operational efficiency
  • Consolidate purchasing power
  • Lay the foundation for future growth

Why use an OPE when you can do it yourself?

Chances are you have spent years honing those skills revolving around the ownership, operation and management of restaurants and hotels. An OPE has spent his years focusing on foodservice purchasing, negotiations and problem solving. You could master the intricacies of that profession, but is it worth your time? Most of us are unwilling to invest the time necessary to learn a separate discipline. After all, that's why we hire accountants.

In looking at the large corporate players in our industry, we usually find that each has a purchasing department with a full staff of experts to maximize bottom-line results. Now, the same bottom-line expertise is available to small- and medium-sized restaurant chains - even independents - in the form of an OPE. In tough times, this can be a powerful survival mechanism.

How does an OPE increase your bottom line?

The OPE should be able to review all aspects of your purchasing and supply programs and then customize a strategic plan that precisely fits your needs. There are numerous strategies:

  • Audits of supplier programs
  • Bidding and/or renegotiation of supplier programs
  • Cost avoidance
  • Commodities and futures purchasing programs
  • Additional revenue sources
  • Enhancing relationships with supply partners

To enhance relationships with supply partners, an OPE, on behalf of the owner, forms a mutually beneficial relationship with the supplier. Pertinent cost information is agreed upon and shared on an ongoing basis, which solidifies supplier relationships. A well-rounded consultant should have a strong understanding of how suppliers operate at a fair margin and how efficiencies can be shared. In this way, an OPE should be able to work in your best interests to achieve a "win-win" situation with your supply partners. Most importantly, OPEs should have some level of operation background in the industry in order to truly appreciate what your needs are.

What else can an OPE do for you?

Aside from positively impacting your bottom line, an OPE can:

  • Save you time
  • Act as a source for supply/purchasing-related questions that are pertinent to your operation
  • Review and analyze all supply/service contracts
  • Solve service problems or supply issues
  • Handle the interface with your Chef or primary contact at the corporate level

What will you do to survive?

The Institute for Supply Management calculates that, in terms of impact on your bottom line, every dollar you save in your operation is equivalent to $7-$10 in additional sales (depending on your desired margin of profit). In this case, a dollar saved is truly a dollar earned – and that fact is key to our survival.

One of the strategies that many operators are embracing now is partnering with an OPE to further enhance the purchasing process they currently have in place and drive savings to the bottom line. Give LP Enterprises a call so we can discuss what we can bring to your table.