Friday, June 24, 2011

"USDA To Probe Companies Running School Cafeterias"

Article from EdWeek

Summary: "The U.S. Department of Agriculture's watchdog arm plans to look closely at whether the food-service-management companies running many school cafeterias are passing along all the discounts and rebates they receive from their suppliers to the districts that hire them."

Stock up on your favorite cereals, too, especially if they are of the “sweeter” variety. Nanny-do-gooder government is going after the cereal companies, too.

Next they’ll being showing up at our houses on Thanksgiving Day to see if we had one too many pumpkin pies.


This ought to be good for generating some kickbacks for the USDA.


So you start a cafeteria servicing company and by running it real well you get several school contracts.
Through good management you can do volume purchasing your vendors can give you a lower price, that is based on end of year purchases and there is a rebate associated with that volume.

How does any rebate they get belong to the customer?


I'm in supply chain management for a mid-sized manufacturing operation. I simply do not have time to check on every vendor to see if they are passing along every discount and rebate to us. What's more, I don't even care, because I have alternatives for most of our suppliers. If they get too expensive (or too unreliable or too late with deliveries or too anything else), orders go to their competitors.
That's the way it works in the real world.

FWIW, we pay less for almost everything than the local school district which has a far bigger budget. I know because I use many of the same vendors and we talk. We also throw out relatively minor amounts of obsolete inventory from time to time, a pallet or two at a time. The school districts, meanwhile, throw out truckloads.

Now why do you suppose it is that our plant can get better pricing on smaller quantities when we don't have the manpower to go out and audit every vendor for rebates and discounts and the school districts do?


A good portion of this money will wind up going to the Democrats for elections.

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