Procurement Interfaces Improving Efficiency and Lowering Food Cost

1. Procurement Interfaces Improving Efficiency and Lowering Food Cost Presented by: Kim Davis RDN, LD, CBORD

2. Agenda 1 The Procurement Process 2 Vendor Integration Interfaces 3 Accounts Payable (AP) Interface

3. Foodservice Procurement

4. Foodservice Procurement Purchasing Receiving Payment

5. Purchasing Process How many vendors do you order from? How many orders per week? Which ordering methods are used?(fax, email, web form, handheld device, notebook paper) How many different items are ordered? What is the price of each item? How many venues do you order for?(patients, students, retail, franchises, kiosks, food trucks, catering)

6. Receiving and Payment Processes How many invoices do you process in a week? How many locations do you receive product for? How much time is spent receiving? How is information relayed to accounts payable? How is payment sent to the vendor?

7. Procurement is a Complex Process

8. Survey Says 2016 Healthcare Census from Foodservice Director (FSD) 184 Hospitals • 76% surveyed are self-op • 86% provide a mix of patient and retail services (40% patient / 60% retail) • Retail includes alternative venues (catering, kiosks, food trucks, community engagement) • Average of 237 patients fed daily Annual Food Budget • 34% $1,000,000 - $4,999,999 • 13% > $5,000,000

9. Survey Says 2018 C&U Census from Foodservice Director (FSD) 136 College and Universities Polled • 4% more Dining departments are responsible for areas other than dining halls • Only 3% of respondents do not manage additional services • 6,416 average number of meals served per school per day • Keeping up with the footprint • Hot Trends customer demand

10. What are your challenges? Rising Food Costs Budget Cuts Demand for New Services • Room service • Alternative retail concepts (food trucks, kiosks) Market Demand • Locally-sourced • Health-conscious • Specialty items (gluten free, ethical grab and go, vegan)

11. How can we help? • Adding Vendor Integration and AP Interfaces can: • Reduce the cost of ingredients and supplies • Reduce inventory costs • Improve efficiency with decreased labor hours • Reduce manual data entry errors

13. Vendor Integration

14. Vendor Integration and Purchasing • Importing Vendor Catalogs and Price Files • Automatically create vendor items from a catalog or order guide • Update item prices on a routine basis • Ability to add new Vendor Items to the catalog • Reporting details on purchasing history and price changes

15. Vendor Integration and Purchasing • How Catalogs and Price Files Work • Vendors send files on a regular basis (weekly, monthly, on demand) • Files can be sent via ftp or manually uploaded • Several file formats supported including EDI, X12, or proprietary data formats

16. Vendor Integration and Purchasing • Price Files in Action • User initiates price update process in FSS • Review log report indicating changes, additions, and or deletions • Link any new vendor items created to a general item

17. Vendor Integration and Purchasing • Sending Purchase Orders • Takes the guesswork out of ordering • Reduces ordering errors • Allows ordering closer to cut off time • Prompts confirmations from vendors • Makes reporting easier

18. Vendor Integration and Purchasing • How It Works • Create an order via a template, order scheduler, or worksheet • Send Purchase Orders via FTP, or locally create a file to upload to vendor website • Vendors can send a confirmation file to update the order status • Vendors may send email confirmations indicating shortages and substitutions

19. Vendor Integration and Purchasing • Purchase Orders in Action

20. Vendor Integration and Receiving • Importing Invoices • Updates Purchase Orders or creates a new received PO • Updates quantities, prices, and substitutions received • Reports variances from originating order • Updates on-hand inventory totals • Updates Last Price Paid (LPP) • Reduces manual entry time

21. Vendor Integration and Receiving • How It Works • Vendors send files daily (day of delivery or next day) • Files sent via FTP • Several file formats supported including EDI, X12, or proprietary data formats

22. Vendor Integration and Receiving • Receiving in Action

23. Vendor Integration and Receiving Do the Math! (these are just estimates) Multi-site Environment 600 invoices/monthsingle vendor 2 minutes each to process 2 x 600 = 1200/60 = 20 hours per month At $10/hour, you are saving $200/month! Single Small Site 30 invoices/monthmultiple vendors 15 minutes each to process 15 x 30 = 450/60 = 7.5 hours per month At $10/hour, you are saving $75 each month — a whole person day!

24. Vendor Integration and Receiving Customers Report Saving Time Advanced Meal Saves 20 hours/Week with importing invoices California Institute of Technology Saves 30 hours/Week with importing invoices

25. Vendor Integration • Implementation • Site obtains credentials from vendor • IA works kicks off project with the site and vendor • Review operational considerations that might impact the integration • Media built in house and delivered to site for testing • Each vendor integration is a separate interface

26. Vendor Integration • Installation (CBOTM) • Low overhead, can be centrally placed on a server or on individual workstations • Interface media is independent of FSS software and does not need to be upgraded when FSS is upgraded • CBOTM works behind the scenes when users initiate process

27. Vendor Integration • Installation • Requires internet and FTP access through your firewall • If using FTP, we support FTP, SFTP, FTPS • Permissions, Permissions, Permissions…

28. Accounts Payable (AP) Interface

29. AP Interface and Payment • Sending Invoices to Accounts Payable System • Automate process of sending purchasing data from CBORD directly to your Accounts Payable System • Maintain data integrity by eliminating duplicate data entry • Allows for timely payment to vendors increasing rebate opportunities • Validates Data

30. AP Interface and Payment • How It Works • File based one way interface sending data to AP system • Highly customizable and unique to each customer to meet the requirements of the AP system in terms of • Data content • File format • Frequency • Can run on demand or part of EOD processing

31. AP Interface and Payment • Data Validation

32. AP Interface and Payment • AP In Action • Export Invoices marked as Status of Received

33. AP Interface and Payment • AP In Action • Review Pre-Post Export Reports

34. AP Interface and Payment Are you leaving money on the table?

35. AP Interface and Payment • Savings from an AP Interface • Sample Rebate Incentives for timely payment • Payment within 7 days .36% • Payment 8-14 days .24% • Payment within 21 days .12% If you could get a .36% rebate for paying a vendor in 7 days… $350,000 monthly invoices x .0036 = $1,260 savings in food cost/month That is $15,120.00 per year!!!

36. AP Interface and Payment • On the flip side- late payment can be costly • Sample Upcharges for late payment • Payment within 31-45 days +.25% • Payment 45-60 days +.50% If you pay invoices after 30 days … $350,000 monthly invoices x .0025 = $875 additional food cost/month That is $10,500 in additional food costs annually and the loss of $15,120.00 potential savings: $25,620.00 each year in additional food costs

37. AP Interface and Payment

38. AP Interface • Implementation • IA assigned to project • Know your key players (FS, Accounting, IT) • Review specifications, operational considerations • Media built in house and delivered to site for testing • Use case and volume testing • Prep for Go-live

39. Integrations Working Together

40. Value and Benefits of Procurement Integration • Reduce food cost by making timely payments and receiving discounts and rebates • Improved vendor communication with accurate purchase orders and timely updates on vendor items and pricing • Reduce inventory cost by tightening purchasing controls • Improve efficiency by eliminating data entry errors and reducing labor in Foodservice and Accounting • Reporting and Analysis • Dedicated Interface Analyst for duration of project

41. AP Interface and Payment

42. Value and Benefits of Procurement Integration

44. Questions To Ask • Who is in charge of purchasing? • Is CBORD the system of record for purchasing and receiving? • What is the current workflow? • How many vendors are in scope? • What financial system (AP) is used, how is data transferred? • Contact us with questions—we are here to help! ?

45. Education. Technology. Networking. Thank You Questions and Answers

46. We want your feedback! Please evaluate this session in the ERMobile app. Your feedback helps usimprove future sessions. Find this session in the app,and touch COMPLETE SESSION SURVEY. Thank you!