Tracking: Linking purchases to sales

Oct. 15, 2013


That's a number we so often neglect in the purchasing process. We are consumed by gaining a profit and thus seek the best price for the products we buy for our operation.

Yet, you can have the best suppliers with the best product at the lowest cost. But if you lost track of that product's usage, did not sell it or use it as intended, then you have lost everything: product, labor and profit.

So, where does reaching a zero sum come into the equation and how do we get there?

As simple as 1 – 1 = 0

Tracking involves a simple calculation: The Amount Received - Amount Sold = 0. Any answer less than zero is a loss. That may sound simple enough to any buyer worth his salt as long as the purchasing pro knows where that salt is going.

The key to tracking is to discover where the products you buy go, how they are used and if they are sold, stolen or wasted. Causes of lost product may include:

  • Over-portioning - Are your products being used as intended?
  • Poor receiving methods.
  • Abuse – Proper handling? Overcooked, rotated properly, so they do not go out of date. There are varieties of mishandling issues that occur in the kitchen that are easy to track.
  • Yield - Are your kitchen workers using three ounces of grated cheese when the recipe calls for two?
  • Theft – By tracking your products correctly, you see what sort of shrinkage you have and take the steps to stop it.

Just grab a pencil and paper

If you are not tracking now, you should be. Start with easy high-cost products such as chicken, steak or seafood.

Track consistently and in a timely fashion. Daily tracking works best — it is easiest to find the loss the closer to the event. By the end of the month, it's too late.

Tracking does not require sophisticated software although there are plenty of systems out there. But you don't need an expensive tracking system. A pencil and yellow sheet of lined paper or an excel spreadsheet work just fine.

Show your staff you care

Communication with your entire staff is imperative in the process. It shows them you care but also that you are watching what they do and how they do it. By not tracking, you run the risk of being an absentee manager and allowing your staff to make decisions for you. Worse, by not keeping track of your product usage, you encourage waste and possible theft.

Bring everyone into the process from receiving and inventory regarding receipts and invoices; cooks and chefs for production; and administrative support for sales reports.

Ultimately, they will appreciate your concern for your business. In addition, you will be very happy when you hit the magical number: Zero.

Topics: Food Cost Management , Operations Management

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