Managing supply agreements

Supply agreements, properly managed, will minimize daily variances that lead to issues with quality, yield and waste. 

This is a break-out article from Dan Ettling’s Help: The Market is Shifting

Years ago it was typical to simply purchase locally from several suppliers who competed for the business on price or quality. It was a simpler time when baking was many times by hand and processes and formulas somewhat flexible. In the western countries we have gradually evolved to be required to have greater controls and processing efficiencies for profitability. Additionally, food safety rules, the threat of lawsuits and marketing structures require specificity when purchasing ingredients. Deals that used to be sealed with a handshake at the backdoor of a local shop are now in need of careful management for reasons that reach far beyond price.

Every baker understands the concept of flour quality, to pick a key example. When there are inconsistencies in product qualities, yields, even color, we bakers tend to wonder if the flour we received isn’t different than last week. Now for the record many times the changes in our processes and finished products are from lack of control and processing parameters wandering, but anything grown under rain changes from harvest to acre and flour is no exception. Much of my baking career I didn’t see or know how to read a flour specification sheet. One year as I worked for a flour miller and tried to service fellow bakers I learned that I wasn’t alone.

Bakers need to be clear with their miller, and the source of all their supplies, concerning what they are and are not willing to accept across their receiving dock. Determine what the target specification is and then set an over and under tolerance and let the supplier know not to send anything outside of the tolerance. Anything sent can and will be rejected.

Ingredients can have similar specifications and perform differently, however the specifications yield great information concerning what to expect in use, and not least of which is if a change in performance can be expected. In addition to specification sheets giving valuable information for production, if an ingredient is being purchased by the pound or kilo and the moisture level changes then less of the raw material is being received at the same price.

Retail shops are not required to label product and are not as directly incentivized to retain nutritional declaration sheets on ingredients, yet many are now looking at them for health trend information etc. For wholesale bakeries it is now critical to have ingredient companies send nutritional declarations upon agreement to purchase in addition to specification declarations. One must have clear statements on what the ingredients are for a number of reasons including, but not limited to, being sure that the ingredient received is the same for processing, nutritional claims on the baker’s label, and that the correct amount of the ingredient is in each package. Further, don’t accept a “fact panel” as a nutritional statement. It needs to be a complete nutritional declaration based upon a 100 gram sample for standards and clarity.