Small changes that make a big difference – Inventory (7)
Welcome to the next in our series of articles on small changes that can make a big difference to your bottom line. It’s stock taking again – this time we are looking at how to identify possible reasons for variances.
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.
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.
As pointed out in our last post, 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.
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.
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.