Procurement Intelligence Unit

The PIU recently held a roundtable on the catering sub-category of facilities management. As one of event attendees pointed out "catering is a very emotive subject"; it can produce a significant workload for procurement staff.

For an area of relatively low spend, catering can cause category managers a lot of headaches. The stakeholder population for catering can potentially extend to the entire workforce.

Not only is the stakeholder base highly fragmented, it can also be vociferous in expressing its views. Complaints over apparently trivial issues, such as coffee or vending machine availability, can escalate into tides of email correspondence, affecting everyone from the CEO down to the category manager.

One respondent mentioned that staff were becoming increasingly active in expressing their views on Twitter and other social media sites. The interactions are accessible to senior managers just as much as to the public. Indeed, it has reached such a volume that the organisation has deployed a dedicated team to monitor such conversations.

Notwithstanding comments on quality, questions can be raised over the sustainability and organic and other credentials of food offered. These complaints have the potential to embarrass individual category managers, as well as harm the organisation's reputation. Hence, the focus of catering moves from its traditional transactional past of minimising cost to the broader concern of minimising risk.

The resolution to this problem seems to be two-fold. First, install a system that classifies and manages complaints to a more digestible stream of information for relevant staff. Second, to make use of this information in order to inform and improve the catering offering to the company.

One attendee noted that his organisation moved towards a more open use of specifications, where cleaning KPIs were based on staff satisfaction surveys. As a result of this, the level of cleanliness within the workplace significantly rose and hence employees' satisfaction over their office environment increased. A similar model could be used for catering outsourcers, which can tap into an already rich vein of data and opinion.

However, the question that some organisations are asking is whether previously subsidised staff canteens can be transformed into revenue generating concerns within the office. Most companies are aiming to move to a zero-subsidy system wherever possible, and this allows procurement competitively to enter a market from which others had extracted significant profit.

Once catering is considered as a category that can potentially create money for procurement, its positioning with the traditional division of spending patterns comes under question. One event attendee asked whether catering was appropriately housed under facilities management. Unlike many areas of FM, catering cannot be easily bundled into other functions. Security can help to manage switchboard spillover, cleaning staff can assist with maintenance. However, there are relatively few opportunities for similar efficiencies or synergies within catering.

There may be potential crossovers within non-FM categories, such as planning or corporate hospitality. Many companies offer a 'fine dining' element to their catering offerings, which can be deployed to both provide a high-end venue for client meetings, as well as act as a time-saver for managers unable to find appropriate meals nearby.

It is only by returning to first principles and re-examining catering roles within the business - and just simply looking at its legacy role within procurement - can the potential opportunities be identified. In this way, purchasing can potentially extend its reach to the sales function and exert a broader influence over the running of the business.

The above ideas express the means by which a category that was previously considered 'transactional' and 'non-core' can be converted into an area where procurement can demonstrate its skills and its value to the business. The PIU will produce a white paper which goes into more detail on the some of the interesting ideas that organisations are putting into place to resolve some of the common issues that occur in catering.