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Procurement management covers all product, material, products, and service procedures needed for streamline company operations (Li & Biying 2021). This paper defines procurement management strategies to help Bravo Patisserie increase market share in Australia's case and pastry production business. This paper describes the company's procurement strategy for identifying, sourcing, assessing, and managing external resources to launch new products and become an industry leader. This goal will be achieved by demonstrating the important parts of procurement and growth plan. The report will examine meeting procurement core criteria after presenting the company's history, equipment needs, and procurement strategy.
Strategic business operations are affected by procurement management (Mena, Remko & Martin 2018; Benchekroun, Zoubida and Hanaa 2019). The plan presented here will clearly define procurement management. Equipment and ingredient, manufacturing, commercial refrigeration, point of sale, and display cabinetry procurement requirements will be classified. Recent study shows that demand forecasts help determine product or service feasibility (Liang et al. 2021; Bag et al. 2020). In this report, a clear demand forecasting technique will provide average selling price, purchase budget, and other factors used to calculate predictions. The study will emphasize on procurement alternatives and decreasing overall cost to boost competitiveness for better demarcation. The paper will include ways to enhance procurement-related processes such recognition, buy request, evaluating requisition, order management, invoice approval, and record keeping.
The firm wants to be one of Melbourne's top 10 bakeries and Australia's top five in brand recognition. These methods will do this:
Bravo is a Melbourne patisserie. For young people and women, it makes high-quality cakes and pastries. The firm wants to become a national brand and cake and pastry aficionados' go-to.
This will happen through:
Bravo will introduce a new chocolate cake flavor to complement its current ones. This product will be the star of a 12-month intensive marketing campaign targeting the two market segments in Melbourne. The new Raspberry Chocolate Mousse Cake was the most popular of five desserts served to samplers in a marketing study. To accommodate egg-allergic consumers, the cake will be egg and eggless. This product should boost firm sales and brand recognition.
Bravo Patisserie is in Malvern at Wattletree and Burke Road, beside Stonnington's Central Park. The firm makes personalized chocolate cakes for mainstream and niche Vegan audiences, including young people and mothers' organizations.
With an expected 24000 people (Australian Bureau of Statistics 2020), 70% of whom are working age (City of Stonnington 2020), Malvern is recognized for its gardens, green lanes, architecture, and café culture. The population is expected to grow 21% in prework age and 15% in working age during the next five years. Potential clients include local households and 24 Early Learning and kindergarten centers (City of Stonnington 2020), including Caulfield Grammar Malvern, within a 5-minute drive of Bravo Patisserie (Appendix 1).
The area is competitive, thus serving the desired population is crucial to company success (Chang, X, Li, J 2019). COVID-19 limitations and uncertainties have affected local shopping. The Bakery Industry's success depends on innovation in product, price, place (location), and promotion, as well as supporting local businesses and showing community loyalty (Linzalone, R. and Lerro, A. 2021).
Internet searches identified 24 specialty cake shops within a 10-minute drive and 9 within 5 minutes. Benchmarking rivals or peers provides a view of similar product price and increasing performance (Maltz, E, Bi, HH & Bateman, M 2018). Similar chocolate and vegan cakes marketed by rivals averaged $62 and $54, respectively.
Product position forecasting alone cannot handle risk migration when product development and delivery plans are modified and created (Derbyshire, J,Giovannetti. E 2017). Product positioning helps reduce risk when introducing a new product. Initial procurement from trustworthy local vendors provides a material cost preview (Appendix 4) and an indicative bill of materials (Appendix 5) for budgeting and forecasting. The danger of large financial outlays or wholesale supplier bulk goods purchases is reduced.
During product development and market expansion, a supplier efficiency and cost-cutting buying strategy is offered. Estimating inventory profiles involves researching customer and market demand, making judgments, using local knowledge, and watching competitors (Rekik, Glock & Syncetos, 2017). As described previously in this study, ingredient volume and delivery needs are calculated using a 12-month demand prediction. The forecast findings (appendix Table 9) are used to calculate demand, ingredient, and delivery amounts in tables 6 and 7. Delivery amounts would be adjusted to match manufacturer package sizes and volumes. To maintain standards, inventory will be consumed last in, first out. Another product categorization helps identify high ingredient volume to meet manufacturing demand (Group A), ingredients sourced through specialist suppliers (Group B), and perishables (Group C), scheduling smaller volumes but increased delivery frequency for perishables to reduce inventory waste and financial loss due to product degradation.
Monthly purchase orders provide ingredient group, delivery frequency, and planned delivery dates based on business need and delivery replenishment lead times, as shown in the Gantt chart. The report's Gantt chart shows two 6-month periods of the 12-month period for example.
A pre-qualification approach identified ingredient suppliers via due diligence and quality certification (Table 8), creating a pool of competent enterprises. Flexible buying strategies reduce supply risk via inventory management while sales and demand data optimizes a purchase and supply plan (Wang, Fan, & Gong 2018). A “value-at-risk” strategy may control price risk exposure and evaluate risk by defining risk limits based on investment value at any moment based on market information and operational factors (Wilson, Naaje, & Hawes 2017).
The average cake price is $62, which determines the sale budget. Monthly sales budget for 2022 is $139,744.49, calculated by multiplying monthly demand by unit price.
Sale budget is based on average cake price of $62.
A preliminary evaluation of local suppliers' commitment and capacity to supply industrial-specific goods and services to fulfill corporate demands. Ingredients and equipment were purchased. Manufacturing, commercial refrigeration, point of sale, and display cabinetry equipment supply was prioritized owing to its capital-intensive nature and restricted possibilities. (Mwesiumo, 2021) Ingredient suppliers offered more alternatives and varied supply routes. Supplier accreditation and product distribution affect food industry equipment providers. Equipment and supplier certification are based on four Food Industry standards. ISO 9000 documentation, HACCP food hygiene system (FSANZ), ISO 45000 occupational health and safety, and ISO 14000 environmental management are examples. (International Standards Organisation c. 2022) Local supplier product profile and capabilities, quality systems and certification, delivery and support network, inventory and cost control management, innovation, and location. specified the major supplier criteria. T. Clauss & N. Tangpong (2019)
Establishing a cooperative supplier connection is the foundation of an efficient supply chain, managing risk, decreasing buying costs, and enhancing efficiency (Jiang Z 2017).
Initial equipment and ingredient providers
Potential equipment and ingredient providers are included in the above table and may help identify application, specification, and procurement procedures. The raw data table lists extended supplier capabilities.
Market research by Inox, Varoooy Machinery, Hospitality World Direct, and Petra Equipment estimates $50,000 based on the equipment specified in the "Procurement needs" section previously in this study. Before budgetary inclusion and planning, the purchase requires application definition and capital equipment expense justification. Spending approval would invite preselected approved vendors in the table above to submit bids. Expect 4- to 6-month product delivery lead times.
Rental or lease equipment may be needed if delivery timeframes surpass production and product launch.
The supply chain diagram shows Bravo patisserie's upstream and downstream partners in fulfilling a client request. Supply chain management maximizes profit by managing product and information flow, minimizing inventory costs, and delivering expected quantities on time and in place. Supply chain management reduces the bullwhip effect by showing product delivery and volume plans. Ordering more goods upstream to meet downstream demand may cause the bullwhip effect. If delivery time frames are not controlled to meet downstream demand, surplus inventory might occur. (Dai, Li 2017).
A quality management system (QMS) uses specification and measurement methodologies to ensure enterprise-wide uniformity and quality. Total Quality Management (TQM) includes QMS and management and staff leadership to guarantee every process is done appropriately in their area of responsibility (Antunes et al 2021).
Total Quality Management-based purchasing methods that reduce costs and standardize procedures encourage suppliers to provide excellent service, delivery, continuous improvement, and innovation. 2020 Calda-Miguel et al.
Federal and State laws and Food Industry Standards safeguard businesses, suppliers, and consumers, standardizing industry business practices. These include ISO 9000 and ISO 22000 for quality management systems, documented procedures, and manufacturing and processing standards. The Australian and New Zealand Food criteria Code (FSANZ) mandates three food preparation, equipment, and hygiene criteria for enterprises. Australian and New Zealand Food Standards 2020. The Food Safety Practises Code cites HACCP, an internationally recognized food safety system that uses quality control to monitor biological, chemical, and physical risks during food processing. 2020 (Zupanets et al.).
Quality encompasses all processes and work practises within a business to produce goods and services that meet or exceed customer needs and expectations.
This report forecasts and predicts demand using exponential smoothing. The approach needs minimal history data recording, making it straightforward to utilize. The study generates historical data from industry data to start the prediction. The 2017 Canadean bakery and cereals market analysis in Australia predicted a 2020 market value of 858,400,000 Australian dollars for cakes, pastries, and sweet pies. Cakes account for 27.2% of Australian cake and pastry production sales (Yeoh, YH 2021). 30.2% of industrial businesses are in Victoria, and 30% of income originates from SMEs (Yeoh, YH 2021). These percentages extrapolate market value estimates to $21,153,722 in 2020 revenue from Victoria SMEs' cakes. SMEs in Victoria earned $21,716,411 in 2021 from cakes due to a 2.66% demand rise (Yeoh, YH 2021). The analysis utilizes the average price of chocolate cakes ($62) to translate revenue statistics into the number of cakes SMEs in Victoria sold in 2021, or 350,000 cakes. Australia has 518 SMEs (Yeoh, YH 2021). For simplicity, utilizing 30.2% of those enterprises in Victoria yields 157 SMEs in Victoria. Assuming these enterprises split the Victorian market evenly, the analysis estimates that each SMEs patisserie sold 2,200 cakes in 2021, or 184 cakes each month. To account for assumptions in calculating the 2021 monthly average, the report will utilize a lower smoothing constant α, such as 0.2. Using genuine demand data during period t-1 to calculate the prediction for period t, the report will assume the firm has gone until 2022 using certain liberties. Figure 1 depicts the prediction under the assumptions.
Outsourcing bakery procedures will allow the organization to manufacture new items like cakes quickly. The company's payroll is crucial to outsourcing. Outsourcing payroll lets the firm concentrate on pastries and product development (2020).
The second most essential outsourced piece is staff training. Having a recruiting business handle staff training will save the company money and provide excellent workers with the expertise to expand the Bravo pastry brand.
However, outsourcing has risks for the organization. Outsourcing reduces pastry shop control since we must trust other parties with our assets. Communication concerns are the second danger of outsourcing. Contacting other parties daily is difficult and delays services. The last danger of outsourcing is that you may lose your brand's individuality since outsourcing businesses provide the same services to everyone. Because they outsource to numerous organizations, your requirements may not be their first focus.
To improve quality and optimize profitability, the organization should outsource IT and marketing. Outsourcing lets companies focus on their core tasks, according to Lair (2019). Outsourcing lets the cake company focus on customer demands. According to study, outsourcing gives organizations more control over certain of their non-core tasks (Liar, 2019).
Additionally, if the cake store outsources certain services to other businesses, it will save money on recruiting, employing, and training staff. Since reputed Melbourne companies would provide the services, the cake store will get greater value from outsourcing. Outsourcing is assigning company tasks to skilled and competent businesses, according to Liar (2019).
However, outsourcing has dangers that must be addressed before signing a contract. Outsourcing forces organizations to depend on others for survival since they lack the skills to do specific tasks (Lair, 2020).
This paper describes the company's procurement strategy for identifying, sourcing, assessing, and managing external resources to launch new goods and become a top Australian pastry brand. An proper timeline of organizational introduction shows competitive advantages and procurement needs. Management also discussed location and target market for future product launches, demonstrating suitable orientation. Additionally, location, target market, procurement strategy, sales budget, equipment and ingredient supplies, supply chain, quality system, demand projection, and outsourced procurement are clearly shown. A demand-based buying strategy is envisaged. Additionally, the demand prediction said that quality management system helped identify a year's sales demand. Additionally, federal and state regulations are addressed before buying plan.
The company's new product market strategy usually involves evaluating customer demand, market demand, product setup, and market development cycle. According to projected findings, delivery amounts must be adjusted. Supply chain diagrams showed Bravo Patisserie's upstream and downstream stakeholders. Quality systems that assist comprehensive quality management have also been defined for improved progress. Increasing performance by addressing customer needs is a strategic development area. With implementation of the aforementioned procurement strategy, the patisserie can increase its customer base and achieve its goal of becoming the best in the Australian market.
For strategic patisserie objective improvement, procurement efficiency must be improved by embracing the higher position in the firm. For strategic growth, implement the following suggestions:
Supplier list consolidation: The patisserie might concentrate on supplier list consolidation to achieve economies of scale. Establishing significant and credible suppliers for procurement clarity is also important.
Reassessing needs: Operations affect procurement requirements (Bandara et al. 2019). Thus, assessing requirements periodically is crucial to manage strategic growth. To properly manage experience, trial and error must be strategically considered. Because procurement for comparable organizations might vary, emphasizing one strategy may not work.
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