Avoid Eating Up Profits

Food-service profit margins are thin, placing every food service operator under constant pressure to control costs and eliminate waste. In an ongoing balancing act, he or she must watch everything from food costs, waste, spoilage and over-use of expensive ingredients to outright theft. Effective managers follow best practices in all areas, starting with correct inventory and order practices to avoid ordering too much -- yet not running out of key products components. Once received, perishable products must be stored correctly to ensure that food remains usable. When it comes to serving meals or snacks, efficient operators avoid giving away profits in the form of free food or incorrect portions.

Some of the best practices followed by successful managers include:

    * Using par levels and good inventory practices to avoid over- or under- ordering.

    * Reducing spoilage by properly rotating stock in coolers and freezers so that first- in is first-out. Keeping the focus on spoilage has several benefits: Points out trouble areas; identifies areas of overproduction; leads to an action plan to address the problem.

    * Matching production records to inventory records to help identify theft problems.

    * Using the correct ladles, spoons and other serving utensils consistently to avoid giving away "free food." The correct size ladle will deliver a consistent portion of soup, gravy, pasta, etc.

    * Using the correct size service ware (bowls, plates and cups) helps reduce waste and control portion sizes. Even small differences can increase costs. If costs are based on a 4 oz serving don't use a 4.5 oz bowl.

Because theft is rampant in the industry, operators must remain alert to signs of pilfering. Proper inventory methods can point out problems before they grow. Staff involvement and training is also very important because a manager cannot be everywhere or see everything at once. Profit can rise by creating a culture where everyone is working together to spot and eliminate loss.

In a recent conversation with a Chef, he voiced frustration that he could not get a handle on costs. Turns out he was spending so much time finding the lowest price for EVERY item that he was not paying enough attention to waste, spoilage and theft. He was saving pennies while losing dollars. If you are like him, establishing a solid pricing structure with all suppliers can free up time to focus on other areas that are critical to your success: marketing to build the top-line; managing, training and developing staff; and developing best practices for customer satisfaction.