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Monday, June 26, 2006

Ideal Usage Calculation-Major Hurdles

Any top 10 list of ideal food usage problems should include the open food key on your POS system. Take a look at your product mix report and find open food as a percentage of food sales. A worst case scenario involves over 10% of food sales attributed to open food. Less than one half of one percent is a good target. Your operation probably runs somewhere between these extremes. The higher the open food sales as a percent of total food, the lower your chance of success in calculating an accurate ideal usage.

Large buffet sales may hamper ideal food cost calculation. This is not the case in all operations. Many chefs are fantastic with buffet control. I've seen higher variances in operations with a high buffet sales component. Buffet recipes are tricky and many operators give up on developing a complex recipe model.

Menu item explosion can implode the ideal usage calculation. The more items on the menu, the lower the chance of accurate food cost prediction. Focused menus with very few specials represent your best option. When it is impossible to offer a menu with a tight focus, try to view your menu in logical sections. These sections should focus on a particular food category (e.g. steaks, seafood, etc.). Some sections will be more kind to the recipe team. Calculate a separate ideal usage percentage for each section.

In general, the greater the yield variance in producing an entree portion the lower the probability of accurate ideal usage calculation. Try a simple exercise. Take 90 days of purchase history on any large meat cut used to produce a popular menu item. Simply enter the weights per piece in a column of a spreadsheet. Calculate the average weight per piece and the standard deviation. As the standard deviation expressed as a percentage of the average weight increases, your chance of accurate standard recipe creation declines. Consider portion control items whenever you experience huge variances in usage on entrees cut from large meat cuts.

If you develop each day's menu in the morning at the market, your chance of accurately predicting ideal usage may be zero. I have never seen a market driven menu with a tight difference between actual and ideal. The higher the percentage of sales generated by specials, the lower your chance in consistently hitting an ideal number. Production and prep activities will be closely tied to your purchases. Actual sales may differ widely.

Low sales volume will hinder any attempt at ideal usage calculation. Combined with an unwieldy menu, low sales volume can spell disaster. When the sales are extremely low, all efforts to control costs should take a lower priority. Your menu strategy is failing and the market has spoken. Try a smaller, easier to produce menu and get the word out in the press. Offer some promotions and solicit customer criticism. Go with the winners and cut all the menu dogs.

Consistent food cost results are a function of logical menu mix, tight menu focus, excellent POS menu setup, limited specials and buffets, predictable portion yields and a profitable sales volume. If your attempts at ideal usage calculation have been disappointing in the past, examine your operation and eliminate the obstacles to success. Find the ingredients which are always in the top variance list. Make an easier to track production method for these problem items. Better results happen one ingredient at a time.

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