This week topic is Managing Purchases
Managing your purchasing is a key component of your success at hitting your monthly food cost target. Keeping food purchases in line also allows for inventories to stay as close to even each week.
Purchases have an immediate effect on your inventory levels. If food purchases go up then inventory levels should increase. If purchases are lower than your weekly target than your inventory should be reduced.
If you have a situation where you have exceeded your weekly purchase target and you have a drop in your inventory, this could be a red flag to your actual food cost for the week. As operators there may be reasons where this could occur that would not necessarily mean an increase in cost for the week. It could be that you had additional revenues that week to off-set the variance.
If your purchases are better than your weekly plan and your inventory increases, there is definitely a problem with values and how the inventory was accounted for. In this situation, it is a good idea to review the detail of your inventory and look for specific “red flag” items such as something having dollar values that show something in the thousands. This would detail an over value.
As a reminder, when calculating your weekly targets you will need to be sure that you have accounted for your Opportunity Buys purchasing as well. If you have an Opportunity buy purchase for the week, your inventory should definitely increase.
Accuracy in purchasing as well as inventory are extremely relevant to managing your food costs.
Kevin J Mclaughlin | Regional Director of Operations