Your new menu has been developed, and the daily food cost falls within the dollar amount allotted for each resident’s food. Nothing to worry about, right? If it were that easy, every foodservice department would be under budget.
Unfortunately, this is not the case. There’s a big difference between theoretical cost and actual cost. Food dollars disappear for many reasons, such as overproduction, spoilage, waste and theft. With an inventory-management process, you can identify the holes in your food-budget and implement strategies to plug them.
But who has time to implement and maintain a best-practice inventory management program?
You do, because the money you can save is worth the effort. Isn’t there some way to make it easy? Well, yes, there are shortcuts (and who isn’t looking for time-saving shortcuts?) that help foodservice managers accomplish some inventory management in a fraction of the time.
We’ve identified the best-practice for inventory control as well as the shortcut—what I like to call the “that’s good enough” method.
Before implementing a regular inventory-tracking process, you need to have a clear idea about what product codes you want to track. Best practice dictates a tightly controlled order guide—your list of all products purchased from vendors accounted for in full. Your count sheets would be static and they would reflect everything that could potentially be in your care centre.
If this sounds like a bit too much work, consider a managed list of carefully selected products. This list may be your highest-cost items, perhaps proteins or some produce. If spoilage of fresh dairy is a problem, perhaps adding some dairy products to your list makes sense.
The point is you don’t have to track everything. And, when it comes to sourcing products, consider adding the closest comparable product from your main distributor to streamline the inventory process. This is especially relevant if you use an inventory management system linked to the distributor’s products. This is because from distributor to distributor, prices will be comparable, which means you’re likely to recoup any price difference by saving time and simplifying the inventory process.
The gold-standard of paperless inventory is having specific storage slots for every item you buy. If you do this, you can place laminated product barcodes on the front of each slot to enable you to use a Bluetooth-enabled scanner, linked with a smartphone or tablet, to take a paperless inventory!
But tracking every slot and every item can be a lot of work. It might be more realistic to mark specific storage slots—those with key items you wish to track regularly. Identify each slot with a colourful sticker to draw the attention of the person taking the inventory. Everything else, while it would likely have a specified storage area, wouldn’t be restricted to a single slot. Setup for inventory in a scenario such as this would take a fraction of the time.
Traditionally, inventory counts are taken at regular intervals—yearly, quarterly, monthly or even weekly. The physical inventory is counted outside of assigned duties, adding additional labour hours to your operation. An alternative is to piggyback your mini inventories on your pre-order stock taking.
While the foodservice worker is walking through each storage location to see what’s on hand prior to placing an order, if they simply had the list of key items (30 or so) to account for they would see the colourful stickers and enter the amounts.
There’s very little additional labour required to account for this small list of items because your employee is already conducting a stock check. The bonus to this approach is getting a more frequent check of inventory, accounting for your key products whenever you’re preparing to place an order. If you have two deliveries per week, you could even divide your inventory checklist in half. Perhaps pink sticker products are looked at on Mondays and green sticker products are looked at on Thursdays, making this task even easier.
Once you’ve started collecting inventory data, you need a method of analyzing and tracking it over time. This is the only way to detect and fill the holes in your budget, such as overproduction, spoilage or theft. Some might say a spreadsheet is a viable alternative to an inventory management system, but it’s not.
Pricing in the spreadsheet would have to be manually updated, purchases and credits would have to be manually entered and you would need a complex equation to understand your cost of goods. An inventory management system should be able to do all of these things for you. Plus, it should be automatically linked to your distributor so you can track everything in real time.
If you aren’t taking regular inventories outside of your yearly physical counts, you may be missing a savings opportunity. By utilizing the above approaches and linking to an inventory management system you can start quite quickly and fairly small, perhaps even 5 or 10 items that are a concern for you. From there, adding a few items at a time is much more manageable for staff, once the process is underway.
Gordon Food Service can help simplify inventory. GFS Connect Inventory Manager links pricing, purchasing and inventory so you can quickly track the numbers important to running your business. Talk to your District Sales Representative for more details.
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