After almost forty years in the business, it still surprises me how many restaurants choose not to take inventory of your restaurant food and beverage. I’m a big believer in being held accountable and knowing where my food cost and beverage cost is. I mentioned in my last blog that “the world makes room for those who know where they are going”. If you choose to ignore your physical inventory and not take stock of it literally you, will end up in the lost and found of food service. We are going to address your food inventory because it is the most vulnerable of all in the restaurant business. There are other inventories that are just important. Another inventory is the adult beverage cost ( beer, wine and alcohol). Both the food and beverage inventory play a significant role in the profitability of your restaurant.
One of the most common mistakes in restaurants is that operators not using a two method procedure. The par stock ordering method causes high inventories, and the second method doesn’t require a par stock, but rather an exact amount forecasted from past sales records. The par stock method keeps levels of inventory and only get replaced after a clerk or chef requisitions food needed. The forecasted method runs on your past sales record. If you know you, use certain amounts of a food item then you purchase that amount and a little more. Example, say you use hundred pounds of potatoes every three days, and you buy twice a week. You would order two hundred pounds each time. Hundred pounds for the first three days and the hundred will hold you until the next food order comes in. Understand these two method can work in harmony as long as you are diligent in monitoring your inventory.
Deal or No Deal
Along with another part of the equation is your frequency of deliveries and taking advantage of volume deals. Volume purchases consist of two different deals. The first volume deal how much you buy at one time. Example is french fries. The deal is you buy ten cases of french fries, and they give you two additional cases of french fries at no cost. The other volume deal is called “drop size”. Drop size has a dollar amount attached to it. The drop sizes are setup different for each operation. The volume deal I was on was if I would buy four thousand dollars at one time I would get one percent rebate from the purveyor each month. Keep in mind that volume deals from distributors can help you save money but you have to have the storage to hold the inventory.
Why do they call taking an inventory physical? They called it physical inventory for two reasons. The first is because it is a perishable product that has a shelve life for a period of time. The other reason is that you have to count each item physically. Someone has to take the time and physically go from storage rooms, walk-in coolers and the deep freezers. Maybe this is one of the reasons operators choose not to take inventory. If you are going to put the time in and take an inventory, you want to make sure the inventory is accurate.