The Challenges of Procurement in the Food Industry

By: Widad Tanveer

We usually procure a lot of supplies in the corporate world to keep the operations running. Some companies need to have around 45-75 different items to keep their operations running but on the other side, if we look into the food industry, we will see that the company in the food industry need to have around 300-500 items readily available at all the time to full fill the customers need. The reason why the food industry needs to procure a lot of supplies to fulfil customer need is that every food restaurant in the market have a lot of items to offer to the customer and each item’s raw material needs to be available in the kitchen inventory to fulfil customer desirable demand, so that’s why procurement of each of the item and the ready availability of each item is the most important assets to fulfil customer demand in the food industry. Also, readiness availability doesn’t mean that you procure in a huge quantity. We should always buy the supplies in the optimal quantity that will help us to achieve less disposal and less Out of Stock level of a particular item.

The other challenge the food industry has to face is the managing of the sale price with respect to the highest fluctuating price of the supplies. In the food industry, the customer buying frequency is high as compared to other industries like (clothes etc.), also the customer remembers the price of the product in the food industry. So, increasing or decreasing the sale price of the product frequently due to fluctuation in the price of supplies can be the cause of customer dissatisfaction resulting in losing customer loyalty. So, this pricing factor is a huge challenge in the food industry.

So, these are the two major challenges a food industry face while procuring their supplies and companies should work proactively to overcome these issues.