101 Ways to Deal with Food Cost
This article deals with restaurant food cost problem areas, specifically in the line of "Purchasing and Receiving", part 4 in our current series "101 Ways to Deal with Food Cost". Purchasing Tips: The goal of purchasing is to obtain wholesome, safe foods to meet your menu requirements. The operation must have food to serve customers when needed. The food needs to be the right quality consistent with the operation's standards and purchased at the lowest possible cost. Inventory Levels The first step in computing what item to order and how much you need is to determine the inventory level, or the amount needed on hand at all times. This is a simple amount you need to order, you must first know the amount you have in inventory. Walk through the storage areas and mark in the " On Hand" column the amounts that are there. To determine the "Build to Amount" you will need to know when regularly scheduled deliveries between deliveries. Add on about 15% to the average amount used; this will cover unexpected usage, a late need to order is the difference between the 'Build to Amount' and the amount "On Hand". Experience and food demand will reveal the amount an average order should contain. By purchasing too little, the restaurant may run out of suppliers before the next delivery. Ordering too much will result in tying up money and putting a drain on the restaurant's cash flow. Buying up items in large amounts can save money, but you must consider the cash flow costs. Purchasing and Ordering What exactly is the difference? Purchasing is setting the policy on which suppliers, brands, grades and varieties of products will be ordered. These are your standardized purchase specifications; the specifics of how items are delivered, paid for and returned. These specifications are negotiated between management and distributors. Basically, purchasing is what you order and from whom. Ordering, then, is simply the act of contacting the suppliers and notifying them of the quantity you require. Purchasing Specifications By creating purchasing specifications, you can control which items you purchase and you can maintain which items you purchase consistency. This information is extremely important if you have more than one person that does ordering in your operation. |