Inventory: the First Six Letters

F&B Directors, you love to “invent”, don’t you? Invent as I use it here is synonymous with create or originate. Like promotions, menus, specials, events, even service. Of course you do. The great F&B Directors I know and have known love to invent. They are passionate about it. They (these are synonyms) conceive. Devise. Discover. And create and originate, as previously mentioned.

In fact, you may very well consider this trait to be your finest or most dominant trait. Great. Really.

But, if you love to invent, I’m betting that you hate to inventory. Oh, you do inventories – or instruct your team to do them – as required by accounting. For some companies its monthly, and for others quarterly or even annually. After all, you’re a team player and by the way, who wants to get yelled at. I know I don’t. But it’s too late for me. If you read my last blog, about managing weekly, you’re already yelling at me. Who has time to create and manage a weekly P&L, anyway? (For the answer to that, and more reasons to yell at me, see the blog, OK?)

So now I’m going to tell you to disregard accounting’s requirements and conduct weekly inventories. This is a management practice, not an accounting practice. Oops. Less time to invent. On the other hand, won’t you have more license to invent if your P&L is solid? I think “yes”.

If you don’t insist on weekly inventories for food and beverage now, beginning this practice will deliver unanticipated success stories in just a few weeks. My promise to you.

Your job, as F&B Director, is to ensure that the inventories are reasonably accurate. This means that you must review the preliminary extended count (“Sam, are you sure it’s 10 cases of sardines – maybe it’s 10 cans?”) – this will take you ten minutes. And you must conduct a random spot-count of a few items with whoever actually recorded the count. Make sure they’re looking behind things, beneath things, etc. Good opportunity to spot-check receiving’s data procedures and execution of FIFO, at the same time.

OK. Simple, huh? It should be. Here are a few tips:

  1. Count on the same day each week. If you’re on a calendar year instead of 4-4-5 or 13 months, ignore it. Count every Friday. Or every Sunday. Doesn’t matter so long as it’s the same day. Now you can compare one inventory to the next in – I’m not making this up – less than 60 seconds, and get a meaningful result. (“Sam, we had $4,326 in seafood last week, this week it’s $14,112 – check it again.”) BTW, Sam thinks you’re pretty smart.
  2. Don’t count food-in-process every week. Count it a couple of times a year. Or quarterly. I’m talking about everything from sugar packets in open containers (or on tables) to opened partial containers of…(you name it).
  3. Use common sense. If you prepped a large event, and they’re eating filet mignon, and it’s pre-cooked and plated – you may have to count the steaks, at least.
  4. Remember that this is a management information control, not an accounting practice.

Combine this practice with a sophisticated software purchasing-receiving-costing software program like Adaco (www.Adaco.com) or Compeat (www.Compeat.com) for optimum COGS management. Those are my thoughts, what are yours?

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