August 01, 2013
As we were promoting this issue of Foodservice Equipment Reports to our advertisers, we mentioned that we like to do things that are hard. When you read the article on how chains choose E&S suppliers and products, written brilliantly by our partner and Founding Editor Emeritus Brian Ward, you’ll realize just how hard it was to get people to talk about this subject. But we have friends and sources. And we know how to do research.
The article is based in part on an exclusive new study probing the equipment and supplies purchasing and specification practices of restaurant chains. We surveyed our chain subscribers in May and June, as many of you who were bombarded with the survey e-mails know. We asked a host of questions on which title/functions are involved in choosing E&S, who has the most influence in choosing the spec and suppliers, what criteria are used to evaluate E&S and suppliers, how and where testing or evaluation of new E&S occurs, and who outside the organization has influence. We ended up with a good, balanced sample of small, medium and giant chains. We learned a lot. Here are some quick highlights.
First, it should come as no surprise that it’s a very complex process with many variations, personnel and criteria involved. Every chain specs and purchases in its own, unique way and these processes can change even within a chain as needs, purposes and/or personnel change.
Size and type of concept matter. Big chains have different processes, criteria and partners than smaller chains. For the biggies, the evaluation processes and the criteria are detailed and very, very rigorous. Changing suppliers is a huge deal, impacting thousands of individual units.
Smaller chains are more flexible and rely more on their suppliers, including their dealers. QSRs, with their need for speed and consistency, their punishing volumes and thousands of units have different needs than full-service chains, chef-driven concepts or multi-concept operators, both large and small. Franchisees purchase differently than franchisors.
So it gets hard to generalize, but there are patterns and priorities, as Brian puts it. In smaller chains, corporate officers and operations management execs are the primary titles involved, followed by purchasing. Larger chains delegate these functions. In such chains, R&D, menu and culinary folks, equipment engineering titles and purchasing are the decision makers, though senior management can get involved, too.
The impact on product quality, defined as food quality, consistency, performance, controls and the like, is by far the leading criteria in choosing a particular supplier or E&S product, chosen by two-thirds of those responding. But ease of operator use, initial cost (no surprise there), labor savings and life-cycle cost also are important, as are energy efficiency and past experience with the supplier.
When it comes to influence from outside, dealers and kitchen equipment suppliers (what the big chains call their distributors) are at the top in a statistical tie with the chain’s purchasing co-op and/or affiliated distribution support. But more than a quarter of the respondents said no one outside the organization has any input.
We know you’ll want to read the full article. There’s a whole lot more there, including guidelines from some very knowledgeable and experienced veterans.
And we also want you to know there will be another article next year in April on how noncommercial and institutional operators buy and spec E&S. These exclusive articles, and the research they are based on, are part of a series of FER examinations of how multiunit foodservice operators buy and spec capital goods and how these processes may be changing. The first article in the series “How the Great Recession Changed E&S Job Functions,” appeared in February this year. If you want a refresher reading of that and can’t find your February issue, you can access it in the archives of our digital edition at fermag.com.