HOSPITALITY COMPANIES IN Barbados and the Caribbean might be paying the price for having inadequate purchasing and cost control practices.
Caribbean hospitality consultant Lisa Beckles, of Lisa Beckles Consulting, feared that at a time when regional economies were struggling, corporate profitability was being hurt by the failure to manage costs and procure properly.
Beckles, who developed an Introduction To Purchasing & Cost Control training programme, is holding it here at Dover Beach Hotel from April 25 to 27.
“Purchasing and cost control is important because persons are in business to derive profits and if they are able to establish systems that manage costs effectively, then they can derive enhanced profits more easily,” she told BARBADOS BUSINESS AUTHORITY.
“The costs of items purchased are a part of those costs that must be controlled and hence any attempt to manage costs of goods and other inputs, should include being more efficient and effective in procuring items, inclusive of using methods other than purchasing them.”
Beckles, who is from Trinidad and Tobago, and has held her training programme here before, as well as in her homeland, Grenada, Dominica, and St Lucia, said proper purchasing and cost control “is particularly important in Barbados and other Caribbean countries in these economic times because our businesses are faced with increased competition, not only locally and regionally but also from the impact of globalisation, and reduced disposable income in some former markets.”
“For companies to increase the gross profit on any item, they can try the route of increasing revenue, or reducing costs. Because of the economic situation and increased competition, in most businesses you can hardly increase total revenue by increasing number of units of sales,” she noted.
“Also, if you try to increase it by increasing your selling prices, in most areas, competition would mean that you may end up selling less units and end up in a worsened revenue situation. Hence the focus is now on [how to] better control your costs, as most of them would be within your control.”
The three-day training programme will cover six modules – The Right Supplier . . . my perfect fit; Controlling; Basic Income Statements; Recipe Costing; Labour Cost Control; and Cost Reduction Strategies.
Beckles said in previous editions of the training programme several concerns emerged while interacting with participants.
“Some of the concerns have been attendees realising that their companies have not been systematic in these areas, have few documented standard operating procedures and systems and so some are daunted by the thought of what they need to start implementing after the programme,” she said.
“Some suppliers also are not as educated about the required standards and certifications as they should be and this impacts on the establishment of purchase specifications. In all the islands I have done this programme, there have been complaints about the lack of consistency in the availability of some items. The matter of duties applied on items imported has also been raised in most of these islands.”
Beckles added: “I have been also concerned by the prevalence of businesses having the same person responsible for purchasing and receiving of items. This is not desirable and participants understand why very clearly after our programme.
“I have noted that even in some four star properties and very fine restaurants in these islands, even basic standards such as purchase specifications and standardised recipes are not present or are improperly done. The result is that items being sold are not properly costed and cost and profit targets may not be met.”
