Purchasing Introduction
The goal of properly purchasing products for an operation is simple, “To order the right product in the right quantities to arrive at the right time.” As discussed earlier, too much inventory on-hand can lead to over production, spoilage, waste and even theft. I've always said about inventory or product amounts, “The more you have, the more they use and the more they steal.” There is less of a chance of employees stealing product if they think the missing product will be noticed. With high inventory amounts, employees think you will never notice or miss a little of something.
Additionally, if employees feel there is an endless supply, they tend to over use products. There is a sense that there is always more where that came from. Again, if employees see that you are almost out of a product, they tend to use it more sparingly not knowing when more might be coming in. They do not want to have to go without something, so they want to make it last. Its human nature. More importantly, when you over purchase product, you decrease your cash flow. As we discussed, inventory is money on the shelf. When all of your money is on the shelf, it is hard to pay bills, meet payroll or invest in your business.
The Process
When it comes to purchasing products, there is nothing that can replace experience. While the process is not necessarily difficult, it can be time consuming and tedious and will typically require a small amount of simple math and physical counting. The one thing you cannot do, is accurately order while sitting at a desk. This is the easiest way to over order or worse yet, under order or miss ordering the products you need. This leads to wasting time having to run to the grocery store or a warehouse club and hoping you can find what you need. Ordering requires you to walk the store room and coolers to see what you currently have on hand. It's important to take the time to eliminate the guess work that will create problems later.
On the other hand, too little inventory can be just as damaging to an operation. Without product to sell, you have missed sales opportunities and disgruntled guest due to not having the product when needed. There is nothing worse than having to tell a guest, “I’m sorry, we’re out of that tonight.” If you don’t have product in house, you can’t sell it. While you can always run to the grocery store or one of the purchasing clubs, this takes time and will usually cost more for products than what you can get from your broadline supplier; cutting into your profits even more.
Purchasing Terminology
AP Product: Abbreviation for As Purchased referring to a product in it's raw state before any fabricating, trimming or cooking has taken place.
EP Product: Abbreviation for Edible Portions referring to a product that has been fabricated or cooked to be served to a guest. EP cost is always higher
Yield Percentage: The factor that is used to determine the loss of product weight or yield from the fabricating, cutting and cooking process. EP Weight / AP Weight = Yield Percentage
Order Guide: Document used to assist in the purchasing process that list all or most commonly used products in an operation
Break or Split: Term for a product that is sold by the piece or each rather than by the case
Catch Weight: A term typically used for meats, poultry and seafood products priced based on the actual case weight rather than an uniform case or package price
PAR Levels: Periodic Automatic Replenishment or PAR Levels are minimum and maximum quantity limits that you set for a certain item
FIFO: "First In First Out" The concept of rotating stock as new stock is received
Most Chef’s will develop their own format and procedure that works best for them, but the process will almost always include some form of ordering guide designed for your operation. An order guide can be a simple spreadsheet with a list of your products used to help in the ordering process.
Some Chefs may create a separate ordering guide broken down by cooler or storeroom, others may break it down by product category. Some Chefs may even use their inventory
sheets as an order guide; whatever works best for you is what I recommend that you use. I prefer an order guide that I created where it is broken down by location (dry storage, walk-in and freezer) and each sheet broken down by category (Dairy, Produce, Meats ect…). Each category and location will list the products that I use daily and consistently to remind me to check if I need to order these products. I will also allow spaces in each category where I will write down what I need based on the menu and the amounts that I require for the period of time that I am ordering for.