Managing Inventory Control and Procurement
Read this chapter. It uses the food service industry as a case study because of the different types of raw material inventory food establishments need to consider. As you read the section on Three Ways to Increase Your Value, can you recommend a fourth or even a fifth to help these businesses?
BASIC INVENTORY PROCEDURES
Purchase Order Chart with Par Levels
The primary purpose of using a purchasing standard is to ensure that sufficient quantities of all food are on hand to meet daily requirements. To establish and maintain these standards, food inventory must become a daily routine. Having set par levels (the amount you should have on hand to get through to the next order) will help in this regard.
There are three main things you need to know:
- Amount required (par level)
- Amount on hand
- Amount to order
To find the amount to order, subtract the amount on hand from the amount required (Figure 7).
Par stock is a term used to describe the amount of a particular item required to meet an operation's needs during a specified period of time. Once a buyer determines that amount, a par stock can be established and used as an ordering guide.
In some cases, you may have to order a minimum amount based on the package size, so will need to round your quantity up (such as the whole tub of garlic and full cases of mushrooms, apples, and lettuce in Figure 7).
| Meat | Amount Required (Par Level) | Amount on Hand | Amount to Order | Actual Order |
|---|---|---|---|---|
| Corned beef | 10 kg | 2 kg | 8 kg | 8 kg |
| Ribs of beef | 20 kg | 5 kg | 15 kg | 15 kg |
| Ground beef | 10 kg | – | 10 kg | 10 kg |
| Veal liver | 5 kg | 500 g | 4.5 kg | 4.5 kg |
| Pork loin | 10 kg | 3 kg | 7 kg | 7 kg |
Table 10.12 Calculating the Actual Order Amount of Different Meats
| Fish | Amount Required (Par Level) | Amount on Hand | Amount to Order | Actual Order |
|---|---|---|---|---|
| Sole Fillet | 25 kg | 5 kg | 20 kg | 20 kg |
Table 10.13 Calculating the Actual Order Amount of A Sole Fillet Fish
| Vegetable | Amount Required (Par Level) | Amount on Hand | Amount to Order | Actual Order |
|---|---|---|---|---|
| Garlic, peeled | 2 kg tub | 250 g | 1.750 kg | 2 kg tub |
| Mushrooms | 5 kg case | 500 g | 4.5 kg | 5 kg case |
| Lettuce | 2 cases (24/case) | 12 (1/2 case) | 1 1/2 cases | 2 cases |
Table 10.14 Calculating the Actual Order Amount of Different Vegetables
| Fruits | Amount Required (Par Level) | Amount on Hand | Amount to Order | Actual Order |
|---|---|---|---|---|
| Apples | 2 cases | 1/2 case | 1 1/2 cases | 2 cases |
| Strawberries | 10 kg | – | – | 10 kg |
| Oranges | 1 Case | 2 Cases | – | – |
Table 10.15 Calculating the Actual Order Amount of Different Fruits
Integrating these par levels into your regular ordering sheets or your ordering system will make it very easy to manage inventory coming in. More and more suppliers are moving to online ordering systems, which have current prices, case sizes, and often your purchase history available to you when placing an order. Online ordering can often be more convenient as the person placing the order does not have to make a call into an order desk during regular office hours.