How easy life would be for Jeffrey Lipson, if only he had a crystal ball.

Then the director of purchasing for Boston-based restaurant chain Legal Sea Foods would know well ahead of time when bad weather would stymie fishing boats from going to sea for fresh catch or when a major drought would hike the price of fruits and vegetables in a certain region.

"I could buy long on produce when I know the weather will be good," Lipson says with a wishful optimism. "I could predict droughts on the West Coast that affect the prices of nearly everything important to us. We have hurricane season coming up and there will be problems in Florida. If it's not one thing, it's another."

But alas, Lipson lives in the real world and his only crystal ball is his experience and expertise.

Supply chain professionals in the restaurant industry are more used to variability than their manufacturing brethren who can devise a more stable production forecast and source components ahead of time. Still, Lipson and his purchasing colleagues are focused on keeping the financial waters as tranquil as possible for Legal Sea Foods' 34 restaurants in eight states and the District of Columbia.

Lipson oversees the sourcing of dry goods for the restaurant chain, as well as office supplies and shrimp. (Because shrimp is sourced more like a commodity than other foods, it comes under Lipson's jurisdiction). About 20% of Legal Sea Foods' spend is dry goods, such as spices, dinner rolls and French fries. Lipson will buy more than 100,000 cases of dinner rolls (150 rolls per case) over the course of a year for the company's 34 restaurants. He also has a budget to purchase more than 1 million sanitary gloves annually for food handlers and other employees.

For dry goods, the company has a national distribution agreement with Houston-based Sysco Corp. to supply its restaurants from four of its local warehouses. Perishable goods, such as fruits and vegetables, come from local produce suppliers.

Global sourcing has its place in the restaurant supply chain. Legal Sea Foods taps suppliers from all over the world for its seafood supply. Vietnam, for example, is the main source for shrimp, while fish comes from different regions of the world, depending on the time of year and availability.

Bill Haller, vice president of seafood operations, and his staff are the folks on the fish piers, buying the daily catch at auction.

Fresh fish only: All of Legal Sea Food’s product comes through its Quality Control laboratory in Boston before being shipped to its final destination.

"Even though it may seem somewhat inefficient to buy some species from Florida, bring it all the way up to Boston for quality assurance and send it back, it is the only way we know to make sure it is the freshest fish possible," Lipson says. "We do supplement that supply with local suppliers, in case there is an emergency."

Turnaround time, of course, is critical, Lipson emphasizes. "If the fish is approved and portioned today, it will be on its way tomorrow morning to its next destination. It spends very little time here." The restaurants get a pre-portioned fish that is individually "cryovac-ed" and they use it within days.

Buying the restaurant business does have its similarities to manufacturing. The biggest procurement challenge for Lipson is reacting to price fluctuations on items that are not under contract.

"When I am dealing with perishable commodities, Mother Nature is the biggest obstacle," he says. "If it is dry on the West Coast and lemon production is down, the price of lemons goes through the roof. We're a seafood restaurant and we have to have lemons. We have to stay ahead of the game."

Fuel surcharges have been the biggest headache of late. Suppliers are adjusting their price upward, especially if their products have a petroleum base.

"Just trying to get our arms around all the factors, whether it is political or environmental, is a full-time challenge," Lipson says.

And like manufacturing, often a seemingly less important item can cause major headaches if it's not showing up to the right place at the right time. For example, Lipson recalls when a supplier ran out of placements.

"The supplier didn't send it to the distributor, so the distributor couldn't send it to the restaurants and we didn't know until it didn't show up," Lipson recalls. "You have to react quickly, because you need placemats. We are buyers, but then we have to take off the technical hat, put on the strategic one and see how we can fix this for the long term."

And like many manufacturers, the procurement team at Legal Sea Foods is working to consolidate its supply base. With fewer suppliers to manage, the company can realize savings, in part, through "soft" costs. If a certain region or restaurant is buying from four different produce suppliers, there is a cost savings in processing just one invoice instead of four.

"In this day and age, it isn't just about getting the best price through your loading dock door. It is about getting the best overall value," he adds. "You may not be paying the least amount for an item, but when you look at the entire package, you are getting the best deal."

Legal Sea Foods recently reviewed its travel spend in an effort to gain more visibility. "Everyone was booking their travel on various sites on the Internet, so we couldn't keep track of who was traveling where and who was paying for what until it came back on expense reports," Lipson says.

The company contracted with a national travel agent, which charged $15 for a reservation, compared with a $5 fee for online travel services. However, the savings from the national firm booking the best airfares and hotel prices "saved tens of thousands of dollars," Lipson estimates.

Legal Sea Foods has a vice president of information technology, who is in charge of the IT procurement. The company is continually upgrading IT, whether it be point-of-sale terminals in the restaurants or general IT improvements within the corporate infrastructure. A capital budget also is in place to keep its four-year-old facility running smoothly, with a portion of that allocation earmarked for preventive maintenance.

The company has a "theoretical food cost," Lipson says, "which may be 1% of sales. That's the goal. From a purchasing standpoint, we have contracts with produce companies. It is basically a cost-plus program with each one. When their costs go up, they are allowed to pass that along. Certain commodities we contract long."

Legal Sea Foods tries to have as few items as possible—if any at all—labeled "market price" on the menu. "We will take the good with the bad," Lipson says. "When the price of lobster is very inexpensive, here is our price. When the lobster market goes through the roof, everyone has to go to market price until it corrects itself again."

In the winter, when fishing boats can't leave the port, the company may be short on certain species for several days. When a boat does go to sea and returns, the catch becomes part of an auction, which in the winter means paying a premium.

"The guest sitting at the table doesn't care about the logistical nightmares of getting the product to the plate," Lipson says. "They are there to indulge, enjoy a good meal and relax. If we were to raise prices on clam chowder because the price of cream goes up, we'd hear more complaints."

So, the next time you sit down at a restaurant, take a moment to think about all the planning and logistics it took to get today's special to your plate. And don't forget to leave a generous tip your waitress or waiter, too.

For more case studies on buying in the food and beverage industries, see:

Brewer keeps his buying simple (Harpoon Brewery)

Recipe for Success (Cains Foods)

Managing better to reduce costs at Welch's