Please only choose one question:

1. How will you determine what information is required in creating product specification sheets?
2. How important are product specification sheets for every inventory item. Does it matter? If so why?
3. What would you say to the owner-operator to convince them that product specification sheets are critical to the control process of the operation.

v With granular insights into managing inventory better such as inventory turnover rate, cause of waste and pilferage, you can start implementing strategies and policies for saving money and increasing revenue which is the ultimate goal in inventory management. To help you achieve this goal, here are a few ways to optimize your food inventory management process for maximum effectiveness. v Create a Team and Provide Continuous Training Motivate employees on the idea of a food inventory management process,to achieve their buy-in. This is a time to train a team for carrying it out the procedures and tasks of management inventory. Identity team members who are trustworthy, detail-oriented, and are able to manage basic kitchen math formulas Train them in your process whether it's an execl inventory management system or a customizied cloud base inventory system. Many cloud base systems are provided by seller/suppliers as added value to the chain of distribution to support customer ecommerce proecesses. Define clear inventory categories, purchase units, etc to ensure data input is correct. Remember food inventory management doesn't have to be the sole task of your inventory team (purchaser, reciever and storage clerk). Other employes such as cooks, bakers can identify and report waste and spillage when it happens, along with beverage service staff such as bartenders and servers. The key takeway is to focus the entire team on carrying out the policies and tasks of managing inventory, steamlining processes to enhance efficiency and reduce costs. > Cross Utilize Inventory > Safe Guard Inventory Levels > Food Inventory Management Software > Reference > 1. Purchase of right quality > 2. Purchase of right quantity > 3. Purchase at the right price > 4. Purchase at the right time > 5. Purchase from the right source 0 Reuse In general, management terms, the following eight objectives of the purchase function may be stated in the following manner : 1. To provide an uninterrupted flow of materials and to ensure continuous production. 2. To buy wisely and contribute to the competitiveness of the end product. 3. To maintain inventories at the optimum level to help result in low-cost operations. 4. To bring about better coordination with other departments in the organization, i.e., with production, performance, engineering departments, etc. 5. To select suitable sources of supply. 6. To develop and maintain good relations with suppliers. Suppliers provide better service to their regular customers and also lend them useful information regarding the availability of possible substitutes and price trends. 7. To develop adequate purchase policies and rational procedures. 8. To train and develop purchasing personnel working under the purchasing executive. Drag the words into the correct boxes k Product Cycle and Procurement The purchaser or food service manager responsible for purchasing products and services for the operation needs to understand the "product cycle" of each product and service as utilized by the operation. This information helps the purchaser procure the best product with the best overall value in the marketplace. Food and beverage operations involve a multitude of activities that engage the staff right from purchasing raw material, preparing food and beverage, keeping the inventory of material, maintaining service quality continuously, managing various catered events, and most importantly, analyzing the business outcomes to decide future policies. Let us look at the product cycle. Foodservice Product Cycle The purchasing department in F&B Services is responsible for purchasing, storing, and issuing the supply of raw food items, canned/bottled beverages, and equipment. The following is a typical product purchasing cycle: , Purchasing \\ O k Setting Up Inventory Courtesy of https:[/opentextbc.ca/basickitchenandfoodservicemanagement/chapter/basic-inventory-procedures/_ 8' One of the reasons you take inventory is to determine food costs and to work out cost percentages. There are several procedures that simplify finding the value of goods in storage. These techniques are based on keeping good records of how much supplies cost and when supplies were purchased. The temptation in small operations is to treat inventory control casually. Perhaps there are only one or two people doing the purchasing and they are usually aware of the supplies that are on hand. This doesn't eliminate the need to track purchases against sales to see if you are managing your costs as well as you can. Almost all inventory control procedures are time-consuming. Moreover, such records must be kept up-to-date and done accurately. Trying to save a few hours by cutting back on the time needed to keep inventory records may be money poorly saved. The simplest method for tracking inventory is using a spreadsheet. A simple spreadsheet might list all of the products that are regularly purchased, with the current prices and the numbers on hand at the last inventory count. The prices can be updated regularly as invoices are processed for payment, and a schedule can be set to count the product on hand. In large operations, the systems need to be more sophisticated as there are more people involved. Purchases might be made by a separate department, inventory records might be kept by a storeroom clerk, and the tracking and counting of inventory might be tied to a system using scanners and barcodes, which in turn may be linked with your sales system so that there is always a record of what should be in stock. No matter the depth of detail used, having a system to track inventory gives managers a good idea of supplies on hand and a tool to use to manage costs. k Managing Inventory Test your knowledge of how best to manage inWh-Wrst in first out) and then calculate the value of The food service manager needs to recognize when arranging purchases of products and services that the correct order size and its counterpart, the correct order time, are the most important keys to inventory management. By ensuring the correct quantity and delivery at the correct time will maintain an ideal inventory level of food, beverages, and nonfood supplies. Furthermore finding the optimal price, when combined with the optimal quality and supplier services produces the overall value. The emphasis should be to ensure the optimal inventory is consistently maintained. Therefore the food service manager needs to determine the ideal amount of inventory that best serves the operation without having to suffer the costs of excess inventory held on hand. Foodservice organizations view inventory as an investment and unlike other industries is highly perishable and easily pilfered if not managed wisely and correctly. g The principal objective of inventory "as, management is to maintain only the '43 necessary amount of food, beverages, and nonfood supplies to serve guests without running out of production required for production. Too much inventory or overstock is a risk of spoilage or pilferage which results in cost and increase expenses. In the hospitality industry, the PAR level is an industry term for effective inventory management. PAR is short for "Periodic Automatic Replacement" is a system for figuring out the specific minimum level of inventory required on hand for a given period of time. The time is often determined by the supplier's delivery schedule, the organization's needs and minimum purchase amounts. When an inventory item falls below the Par stock level an order must be placed with the vendor to replenish the inventory. The emphasis is on setting an acceptable par stock level and then ordering enough products to bring the stock up to the acceptable level. With the right PAR level system, you'll achieve a healthy inventory turnover that ultimately reduces your costs and boosts your profits. Principles of the Par stock system are: 1. Accept the supplier's ordering procedures and delivery schedules. a nzz:4_ L|,_ .A____.__|_|z __,_...,.. _c:._..z..L_.A.. L- L-..z 1.. -1\" _|. _: z_4|_ mu.\" _.,_1 LI_~ __zz__.._|z|_ c.a__..z._ N. A: .n_|:..zu:__ a failure to do so can impact financial repercussions. One small stock management error can lead to food shortages, unnecessary food waste and inaccurate forecasting and food production. All of which impacts food and beverage cost control for your food and beverage business. Canadian foodservice statistics report that up to 10 percent of the food inventory a food service operation purchases is wasted, meaning that 10 percent of their food cost will not generate revenue. It is the responsibility of management to know the cost of products and services that the kitchen produces. A good manager is keenly aware of where the operation is losing money. Detailed usage, loss, and sales performance reports tell the manager what's of current inventory and where the operation is losing money. It is the responsibility of the manager to improve profitability and grow revenue while minimizing costs. It's imperative that the manager consistently and actively reduces costs to maintain the current level of success and margin of profit by following the 5 key principles of inventory management. Effective inventory control can be broken down into a few important steps: 1. Set up systems to track and record inventory 2. Develop specifications and procedures for ordering and purchasing 3. Develop standards and procedures to efficiently receive deliveries 4. Determine the frequency and processes for reconciling inventory 5. Analyze inventory data and determine any areas for improvement Learning Activity - Principles of the Inventory Control . . . .Image source: iStock According to the Canadian Hospitality Industry foodservice operators spend close to half of every dollar on the procurement of products and services. This represents a tremendous amount of buying power in the marketplace. The AP (as purchased) price can influence buyers in many ways. Often inexperienced purchasers shop the marketplace on the basis of AP price. This practice succeeds only when buyers know exactly what they want in terms of quality and supplier services. Often this information is available to purchasers to make sound decisions without further consultation with the vendor, their department, and conducting comparisons with other similar products and services. Best Practices Foodservice managers need to gain sufficient practice in relating AP prices to EP costs (EP stands for Edible Portion, which is the portion of food remaining from the original raw production often referred to prior to portioning the product - Onions have about an ' . . that will be served to a customer after the food has been cut 88%yi61d . . and cooked), quality, and supplier services. Owners and ' S" the 60 \"'5 Of'm'o' operators focus on performance numbers (revenue and we purchased - Yielded about 52.8 1 ' expenses). sliced onions . . 60 x .88 = 52.3 * ., Inexperlenced buyers are more pressured to grasp at a low AP price until they gain sufficient practice in relating AP prices to EP prices. Therefore, a purchasing agent with previous experience in other areas of the hospitality operation is better equipped to understand the organization's needs of products and services EHDXTQZE'REEI IIVuuTube which represent the best value in the market place. Previous experience general helps buyers relate AP prices to overall value. Remember the lowest AP price is not always the best value for a given product or services without a thorough comparison to other AP prices and related EP price. k Product Cycle and Procurement The purchaser or food service manager responWes for the operation needs to understand the u........... u...\" \"1...; ....L. . .J.. A key component in effective kitchen management is inventory control. By knowing what supplies are on hand at a given time, the manager will be able to plan food orders, calculate food costs from the previous inventory, and make menu item changes if needed. By keeping an eye on inventory, it is possible to note potential problems with pilferage and waste. Managing inventory is like checking a bank account. Just as you are interested in how much money you have in the bank and whether that money is paying you enough in interest, the manager should be interested in the value of the supplies in the storeroom and in the kitchen. An inventory is everything that is found within your establishment. Produce, dry stores, pots, and pans, uniforms, liquor, linens, or anything that costs money to the business should be counted as part of the inventory. Kitchen items should be counted separately from the front of the house and bar inventory and so forth. Regardless of the size of your operation, the principles of inventory control are the same. In larger operations, there will be more people and sometimes even whole teams involved with the various steps, and in a small operation, all responsibility for managing the inventory may fall on one or two key people. A key part of foodservice management is inventory control. Proper food inventory management keeps service running smoothly, but a failure to do so can impact financial repercussions. One small stock management error can lead to food shortages, unnecessary food waste and inaccurate forecasting and food production. All of which impacts food and beverage cost control for your food and beverage business. Canadian foodservice statistics report that up to 10 percent of the food inventory a food service operation purchases is wasted, meaning that 10 percent of their food cost will not generate revenue. It is the responsibility of management to know the cost of products and services that the kitchen produces. A good manager is keenly aware of where the operation is losing money. Detailed usage, loss, and sales performance reports tell the manager what's of current inventory and where the operation is losing money. It is the responsibility of the manager to improve profitability and grow revenue while minimizing costs. It's imperative that the manager consistently and actively reduces costs to maintain the current level of success and margin of profit by following the 5 key principles of inventory management. Effective inventory control can be broken down into a few important steps: 1. Set up systems to track and record inventory 2. Develop specifications and procedures for ordering and purchasing Setting the par level requires: 1. forecasting customer demand 2. estimating delivery schedules 3. considering perishability 4. periodically reviewing current par levels to determine their adequacy Inventories must be divided into high-turnover inventory and low-turnover inventory. High-turnover inventory such as meat, seafood, and produce, must be ordered frequently to maintain freshness. Low-turnover inventory includes spices and dry goods. Low-turnover inventory tends to be less expensive and isn't as critical as highturnover inventory. As a formula: Par Level = (Weekly Inventory Use + Safety Stock) DI VIDED BY Deliveries per Week Example A restaurant uses chicken in five menu items. It uses 10 cases of chicken per week and wants to maintain a safety stock of 20% (2 extra cases). The supplier delivers on Monday, Wednesday, and Friday. Based on these figures, the par level of chicken is 4 cases: Weekly Inventory Use (10 cases) + Safety Stock (2 cases) DI VIDED BY Deliveries per Week (3) As a general rule, the higher the turnover, the higher the safety stock requirement. Generally, the safety stock should be around 20% to 30% of the weekly inventory use. You must also be guided by your experiencethe formula is an estimate of the par level inventory. Presenting Issuing + Preparing Reuse Image source: https://www.tutorialspoint.com/food_and_beverage_services/food_and_beverage_services_operations.htm C The purchasing department works with the accounts department to keep the information on the allocated budget and a balanced budget. The following factors influence purchasing: . Size of F&B Organization . Location of F&B Organization . Availability and Size of Storage Space . Organization Budget and Policies . Availability of the commodity due to seasonQ Successfully Managing Inventory in Hospitality Operation Published January 17, 2013, by CUFCLIFUCFE B. The food costs of a restaurant tend to be around 40% of revenues. It is one of the largest expenses a restaurant incurs, and it is therefore critically important that a restaurant effectively manages its inventory. Restaurant owners must balance two competing forces when managing inventory: - keeping enough inventory on hand to meet customer demands and o keeping inventory levels low enough so less cash is tied up in inventories Lower inventory levels have the following advantages: I they require less effort to monitor since fewer items need to be counted and tracked - they can help reduce theftit is easier to notice one bottle of scotch missing when you had three in inventory rather than twenty in inventory 9 they reduce spoilage 0 they reduce wastehigh inventory levels may cause employees to over-portion Setting a Par Level of Inventory The par level of inventory is the amount of inventory needed to meet customer demand and provide a cushion in case of an unexpected spike in demand or a delay in delivery. This cushion is referred to as safety stock. Setting the par level requires: 1. forecasting customer demand 2. estimating delivery schedules Principles of the Par stock system are: 1. Accept the supplier's ordering procedures and delivery schedules. 2. Decide the reasonable amount of inventory to have in stock of each item and the acceptable frequency of deliveries 3. Set the par stock for all food, beverages, and nonfood items. Remember the quantity is to be only enough between deliveries 4. When ordering, subtract what is on hand from the par stock. Then include any additional amounts to cover extra expected sales. 5. Select a primary supplier and secondary supplier of each item. It may be necessary to have additional suppliers for high demand items in the inventory. 6. Periodically reevaluate the stock levels. and adjust them as needed. 7. Remember it is a trial and error process of finding the ideal par stock level and the frequency between scheduled deliveries as the business can fluctuate dramatically seasonally. Q What is Inventory Management System What is Food Inventory Management Food inventory management is your individualized system for tracking what stock comes into the food service operation, what inventory leaves the storerooms to be used for production and delivery of services, and what's leftover at the end of a scal period. A good food inventory management system is also the most useful tool for gaining insight into learning to be efficient and better control costs. Remember there is always room for improvement in managing food cost controls and employee performance. Without an effective inventory management system, you will not be able to determine the efficiency of production or eliminate wasting inventory. Effectively management also supports quality control. With granular insights into managing inventory better such as inventory turnover rate, cause of waste and pilferage, you can start implementing strategies and policies for saving money and increasing revenue which is the ultimate goal in inventory management. To help you achieve this goal, here are a few wWWnagement process for maximum effectiveness