Taking The Time To Get Inventory Right – A Bizimply Guide

Now is a better time than ever to optimise the organisation of storage and inventory in the hospitality industry. We've prepared a few tips to help you out.
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How to keep track of everything in your inventory

Many businesses in the hospitality industry may find that they have a lot of free time on their hands – taking advantage of that opportunity, it may be prudent to delve deep into your inventory and optimise the organisation of your back room! Now is the time to improve the backend of your business, and what better place to start than with inventory & storage?

We’ve prepared a few approaches and tips for managing your storerooms better, so read on to find out more about how to improve the organisation of your goods!

The toothpaste theory

Perhaps the most important general point on storage is that it pays to keep stock levels low. Having excess stock levels means that your cash is sitting on a shelf. And so long as it is sitting on a shelf, it is not making you profit. Another reason for keeping stock levels low is that excess stock encourages wastage (and increases the risk of theft). If stock levels are low, staff tend to be more conservative in using ingredients, equipment etc. It’s just human nature … why take care to keep kitchen implements clean and in working order when it is easier to go and get another from the storeroom? Likewise, chefs will be less concerned about portion control if there is plenty of stock.

One of our customers even redesigned the storage space in all of his restaurants so that there was between 20% and 50% less shelving. It instantly discouraged managers and staff from ordering excess goods.

Most important of all, you do not want to have excess perishable stock – but that’s a subject we will deal with under another heading, waste.

Oh, and in case you are wondering why we called this post the “toothpaste theory”. Well, think about it. The end of the tube seems to last almost as long as the rest of the tube. Every time you clean your teeth and think, “I really must buy another tube …” you are saving money!

Everything has its place

It is often a low priority but by organising your stock rooms, fridges and freezers you can make an impact on the efficiency of your operation. Ensure that there is a place for everything, and everything has a place. That will make it far easier for you to see if items are running low. You can then order it “just in time” thus eliminating the need to panic-purchase from the wrong supplier at a higher price.

It is also important to keep all storage areas clean and organised. The cleaner and more organised your storage areas are, the easier they are to maintain and find items “on the fly”. If you keep all similar products together in one place and neatly placed on properly labelled shelves, you will save staff time too – if they are spending time hunting for ingredients and other items, they are not spending time putting money in the till.

Take it one step further: some of our customers have created a “planagram” for their storage areas, which they then label. That way checking inventory and carrying out stock-takes will be made much easier. 

A graphic makes this easier to understand. Take a look at the two grids above. Count how many green squares are in the first grid, now count how many are in the second grid. There is actually the same amount of each colour square in each grid. But see how much easier it is to count them when they are grouped and organised: so avoid multiple storage areas for the same product types. 

The Stock Take: a pivotal point in the weekly calendar

Most managers and chefs see stocktaking as a tedious chore and often rush through it. Instead stocktaking should be seen as a pivotal point in the week. We recommend that you complete your stock-takes at least weekly because if you leave it any longer it becomes very difficult to troubleshoot when things go wrong. It is relatively easy to remember what happened over the past seven days, but any longer than this becomes a blur.

The objective is not just to get a total financial value for the stock on hand; it is also an excellent opportunity to get an understanding of your business. It can also assist in the detection of pilferage and shrinkage.

The key to success: be systematic!

  1. And it starts with goods received. You need to make sure all of the stock Items have been received and recorded before starting the stock take. Otherwise there is no way that you will be able to get an accurate cost of goods value for the period of your stock take report. Check to ensure that there are no outstanding orders in your system. Do not attempt to conduct a stock take while inventory is being delivered – you will end up double-counting.
  2. Always keep your food stock sheets arranged and updated to meet the needs of the restaurant. Make sure that all of the sheets are updated, the old foods are changed with new ones. Alternatively, for non-perishable goods, wait until you have used them all up before ordering again to save costs.
  3. Having your storerooms well organised before the stock take will make the process much easier, so get the staff to clean and organise all stock rooms prior to doing the stock take, sweeping the floors and facing all packaging outwards. 
  4. Complete the inventory using a two-person process to reduce the error rate in counting. One person counts and weighs product and calls the results aloud. The other person records and calls back. Remember all inventories should be completed by management. 
  5. Use the same staff to take inventory. They will not only get faster at it, but they will tend to be more consistent.
  6. Be thorough. Complete each storage area before moving on to a new area. Make sure there are no mistakes.
  7. Start counting from the back of the kitchen and move forward. Count at the same time every week and ensure that the same managers are counting every time. Enter counts immediately; the person who counts should also always enter the date to avoid confusion.
  8. Spot checks can be made to ensure that accuracy in the stock take has been obtained. Have a goal every week after you do that inventory – set out an action plan.

Stocktaking: trouble-shooting variances

Regular stock-taking enables you to understand the items that are costing your business money. But why? If you are running a restaurant, bar or café, there are several possible causes of anomalies:

Firstly, you need to check variances on an item by item basis, and trouble shoot what is causing the variance. There are four main issues that may cause variances which you will need to check so that you can be confident the variance on each item is accurate.

Counting

Despite counting and recounting you might still have made an error. Never rush things. Triple-check. It never hurts to be cautious when a single mistake can cost you a lot of money.

Received goods

You need to keep an accurate record of goods received or your stock take will not be based on up-to-date information. So, double-check this too, and make sure that you are recording what you are taking in, not just what is there and on the way out.

Usage

How accurately are you calculating usage? It may be that the source of anomalies is the front of house, not the storeroom. Also, if the recipes you have created do not accurately reflect portion sizes these must be updated.

Scales

When doing your stock take, ensure that you do your weighing on a stable surface, or you will get inaccurate results. Instruct staff never to pick the scales up by their plate and to keep them in a place where they will not be dropped. Check that your scales are accurate using standard weights on a weekly basis and recalibrate as necessary. 

Once you have eliminated these possible causes of anomalies you are left with a list of the items that are losing you money

Create a plan for doing something about it. This plan then needs to be communicated to your team and implemented, ideally at a weekly team meeting. It is when you do something about reducing variance at an item level that your business will start saving money.

Be clear on who does what

Stock has a tendency to grow legs and walk out of the building while nobody is looking. It must do, because nobody owns up to taking it with them. Therefore it is a good idea to play safe and lock stores, fridges and freezers whenever they are not in use.

But who holds the keys? Establish a clear policy as to who has access or authority to issue or take items from the secure store. Of course, you need to balance this with the need to always have someone who can get the stock when it is required, i.e. you need to roster your authorised staff accordingly.

Bizimply is obviously your best friend here!

Do not tempt people – even your most trusted employees! Keep small and expensive food items in a place where you can keep an eye on it, not in a storeroom. That includes both ready-to-consume products such as confectionery and valuable ingredients such as saffron and vanilla.

Make sure that all staff who have authorised access to the storage areas communicate with each other effectively and make it easier for them to keep track of things. E.g. have marker pens available and tied up near the storerooms, fridges and freezers so that items can be labelled easily and quickly.

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