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Monday, September 28, 2009

HFTP Question - Final Counts and Safety Factors

In my recent session at the HFTP Annual Convention, I gave my opinion on the use of safety factors in food service operations. Generally, purchasing managers and chefs tend to order a little extra to prevent running out of stock. While a small amount of over stock is optimal, the typical operator has too much stock of many perishable items.

A symptom of over stocked protein is a rising dollar value in freezer inventory.

During the Q&A session, I was asked about optimistic banquet event order final counts. If your sales manager tends to over estimate the final count for banquet events, the probability of spoilage and waste increases. In addition to the freezer, you may find the food in the employee cafe is better than usual. Crab cakes and Chateaubriand should not be on the employee lunch menu.

An optimistic final count number negatively impacts purchasing and production activities since the kitchen will over produce these menu items. Service staffing is also too high.

When you combine the impact of high final counts with a tendency to over order for a safety factor, it is easy to see how costs will run high in this operation. Each department uses their own safety factor to cover the risk of running out. If each department uses a 10% adjustment, you could find the sales team adds 10% to the count, the chef adds 10% to the production forecast and the purchasing manager adds 10% to the chef's order. These adjustments have the biggest impact on high cost per pound, perishable protein items. Look for the impact in freezers, garbage cans, employee meals, soups, stock pots and employee trunks.

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