How are We Short?

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“What?  What do you mean we are out of product?  Did you check the cooler and stockroom?  How could we be out?  I know I ordered plenty and checked it all in.  What happened to it?”  

So goes a mysterious disappearance of a food item.  A negative hit on food cost and of course – profitability.  

In effort to track and prevent this type of loss, we start with answering this question:

The main food item that has the most mysterious disappearances or is most often stolen in my restaurant is:

1.  Desert items

2.  Chicken strips/wings

3.  Bacon

4.  Hamburger patties

5.  Cheese

6.  Other


Establishing Norms    

If you answered the question, how do you know?  Are the losses identified by inventory control records, audit processes, anecdotal information, or calculated guesses?  Once you have identified what item or items are most stolen or have very high associated negative food cost, the process to mitigate or prevent the losses can begin.  Establishing the norms of food cost for each item in your restaurant and routinely tracking them will assist in identifying issues when unacceptable variances and shortages occur.  After you know which items are most stolen, you can then do something about it.

Inventory Counts

Effective inventory control involves a systematic approach to counting inventory and ordering properly.  If you know the quantities on hand for each product with routine audit counts, it will greatly assist in ordering effectively and readily identify short or missing items.  Assign a responsible and accountable person to conduct inventory counts and food orders.  Periodically audit the inventory counts and food orders by the assigned person.

 

Security

Inventory control will be enhanced by limiting access to the refrigerated, freezer, and dry goods stock areas.  Secure access to the back door.  The door should be kept locked and openings limited to authorized personnel only.  If the back door is alarmed, it should be turned off before opening by a manager only.  The most effective back door control is the opening of the back door and monitored by a manager.

 

No Answer

If you didn’t know the answer to the above question, initiate establishing normal guidelines for acceptable negative food cost, start an audit process of food items, limit access to food storage areas, and secure the back door.  It will be a start to a more comprehensive loss control program in your restaurant and eliminate the frustrations of mysteriously running out of product.  The profitability of your business depends on it.

 

Do you want further information about Effective Cash Management Programs.

This was a guest post of Libby Libhart.  D.B. “Libby” Libhart has over 30 years of experience in the Loss Prevention industry.  Libby has provided security and safety leadership in a variety of retail settings including Department Stores, Drug Stores, and Quick Serve Restaurants.  Before launching his own company, LL Training and Consultant Group, LLC Libby served as the Senior Director of U.S. Security and Safety for McDonald’s Corporation.  Libby entered the Quick Serve restaurant industry with Taco Bell and subsequently YUM Brands. 

During his career in Loss Prevention, Libby was recognized for moving Loss Prevention programs from reactive responders to pro-active business partners.  He has led teams that were highly recognized for the development and implementation of successful programs in cash and food cost controls, risk management and life safety.

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