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Tuesday, April 16, 2013

Professional Recipe Model - Forecasting Key Items

Many companies stop cold once they build a standard food cost recipe model.  These operators are happy to see the true food cost of each menu item.  They benefit from the ability to see the change in recipe cost totals whenever they update ingredient prices with current purchase data.

I recommend a phase two project once the initial recipe model is complete.  It is possible to build a powerful forecasting tool with a fraction of the effort required in phase one.

Hopefully, your software allows you to build a new recipe using a recipe already in the system.  Many programs have this feature.  You simply load the base recipe, edit the name and ingredients, and save the new recipe.

Before you dive into the recipes, take a look at all ingredients in your item list.  Every item should be classified as a par stock item or a volume dependent item.  An example of a par stock item is all purpose flour.  This shelf stable item needs to replenished whenever the reorder trigger is pulled in your inventory model.

Many items are not ordered based on a par stock system.  Several examples involve high cost, perishable food ingredients including protein featured in popular entrees and specials, fresh fruits and vegetables, baked goods and special order items.  Protein items include meats, seafood, dairy and poultry products.  These perishable items need to be ordered more carefully than all purpose flour.

When you load a current recipe in your editor, change the name by placing an "F - " at the beginning of the current recipe name.  For example, a recipe for Shrimp Scampi would be changed to F - Shrimp Scampi.  The "F" stands for forecast.

Now load the ingredients editor.  Delete every ingredient which is ordered based on a par stock model.  Salt and pepper can be deleted along with all other dry spices.  If your scampi is served on rice or pasta, you can delete the starch ingredients.  Shelf stable garlic, butter and olive oil can be deleted.

The goal is to have a skeleton recipe with only volume dependent items.  Shrimp 16-20 would definitely remain.  Save the new recipe once all the deletions are completed.

Repeat this process for all recipes needed for entrees, appetizers, salads, soups and protein rich side dishes.  Desserts are optional.  Once you have a full set of recipes with the prefix "F" in your tool kit, you can harness the power of the recipe model.

The next phase varies depending on whether you have a POS system or a catering oriented system.  Those who use a system for catering cost control will have an banquet event order orientation.  The forecast will be entered using a BEO form.  The form will only call recipes beginning with "F" to prevent ordering shelf stable par stock items.

To generate a forecast for your volume dependent ingredients, simply enter a sales mix using your best estimate for each menu item.  Don't worry about safety factors in this stage.  Run the purchase requirements report for this "event" and you will see the counts for each perishable ingredient.

Companies with POS systems and a la carte menus have ideal usage reports.  We want to use the ideal usage report to help us order food in advance.  Using previous product mix reports, current covers forecast and a list of specials, do your best to estimate the sales counts for each item.  If you are about to order food for the weekend, use your weekend item sales forecast to create the sales mix.

The mechanics of entering the sales estimates will vary depending on your software.  Every system has a method for manually entering a sales order.  The goal is to enter the estimated sales counts to use the ideal usage report.  The report's ideal column will show the quantities required to order.

We used this method to forecast purchases in a high volume college football stadium for the luxury suites orders.  The reports accurately calculated the quantities needed based on preliminary orders and management estimates.  Last minute game day emergency trips were dramatically reduced.

Restaurant Data Pros

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