“Faithfully following these stock control practices will help your business achieve better stocktake results. But, it goes without saying that employing a good independent stocktaker is the final prerequisite to see those results continue to improve. Independent stocktakers can objectively identify the areas which your staff overlook.”
– Scott Hulme, Managing Director, Venners
6 Stock control practices for better stocktake results
Stock control practices can hugely vary depending on the type of business you run, whether it is a pub, restaurant, hotel, bar, café etc. On top of this there are additional impacting factors. The type of operation you run: food and beverage, liquor only, everything in between. The internal systems and protocols you have in place: EPoS, organisational structure and record keeping procedures.
We can all agree that it is impossible to take a one-size-fits-all approach to stock control. However, there are universal stock control practices that every hospitality business should employ to improve those all-important stocktake results.
Here are the 6 practices you need to implement to achieve better stocktake results:
An area that is often overlooked as part of stock control practices are equipment efficiency checks, health checks and calibration testing. Your stocktaker job does not technically incorporate checking how well your kitchen machinery is working or not. That is not to say though that your stocktaker would not notice a difference on your stocktaking reports.
The attitude of ‘if it’s working do not touch it’, can cost your business a lot of money. Fine-tuning your machinery and regularly scheduling deep clean activities will ensure that your equipment is constantly working at optimal efficiency.
This includes regular adjustments to machinery such as postmix dispense. Is the mix correct (water to syrup) and is the correct amount being dispensed (e.g. 2oz for a dash)? Is your cooling equipment functioning efficiently and serving the beer at the required temperature? If not, then you could be losing beer and money in needless wastage, which as a result will hit your margins.
We recently completed an analysis for one particular client of their weekly consumption compared to till sales. Despite the client being satisfied with their gross profit percentage, to us it appeared low, as the majority of their sales were from hot drinks (mainly coffee).
We created the comparison using the coffee supplier’s yields for both product and machinery, and found that over a 13 week period, the average loss was equivalent to 1,979 cups/week across all hot drinks. At an average selling price of £2 per cup the loss equated to £4K per week.
After further analysis and investigation we found that the losses arose from three main areas:
- staff drinks not being rung through the till
- short deliveries
- the coffee machine using 8 grams/cup rather than the recommended 7 grams (due to the grind being incorrect)
All of the issues were investigated and swiftly resolved, which resulted in a 2% increase in the client’s margin.
Checking deliveries, one of the most critical stock control practices, is also one of the simplest ones. For this reason it is frequently shown little attention. A huge mistake!
As a habit, our stocktakers will evaluate all delivery information for the period they are working on. They will ask this question: do you really check your liquor and food deliveries? And when they say check they mean that what you are signing for is exactly what you will be invoiced for.
Do you ensure that someone is always there to supervise the delivery personnel so that none of your existing stock has been removed from your premises unlawfully?
There is little doubt that many people over the years become complacent about this stock control practice. Instead, deliveries are supervised by whoever is available. The general attitude is that there is too much stock to inspect and that, when we are in the middle of service, the deliveries will just have to be checked later when we’re less busy. And anyhow, our regular delivery guy is such a champ! He just puts the goods away for us while we make him a cuppa.
Let’s face it, we all know what we should do, but often don’t because it is inconvenient. But trust us when we say that taking the following steps will be a massive help:
- If possible, make sure a senior member of staff is always available and vigorously checks receipt of stock delivered. If it helps, tick alongside the units delivered, taking care not to obscure the quantity on the delivery note.
- In exceptional circumstances, if you are unable to check goods received at time of the delivery, at the very least ask a member of staff to ensure that the delivery is placed intact in a separate area of the cellar/stores – provided you have pre-counted stocks. In these circumstances clearly notate “Unchecked” next to your signature on the delivery note; most suppliers require notification of any claims for shortages or breakages within 24 hours of delivery.
- Check that the invoice reconciles to the delivery note.
Deliveries into the kitchen should be treated no differently, and if anything, a closer inspection is recommended. If you have ordered a particular amount of fillet steak for instance then you or your chef needs to:
- Checking it is actually fillet steak
- Weigh it to ensure that it agrees with the delivery document
Get into the habit of rigorously checking all food deliveries, particularly expensive items such as those you would get from your butcher, fishmonger or dry goods supplier. Word will soon get back to those assembling your order that your checking procedures will not tolerate any errors.
Always make a note on the delivery note when you find an error and contact your supplier immediately to ensure that your invoice will be altered accordingly. Make sure you get the credit you are entitled to, particularly if you pay by a direct debit scheme where you may not have the ability to withhold payment until the credit comes through.
OK, so this is a slight continuation from the previous point, but it is worth noting nonetheless. Ensuring that you carefully file all documentation will assist you in maintaining those rigorous standards of delivery checking. As much as this is an accounting habit, the proper filing of invoices, delivery notes etc. is also a key stock control practice because it allows you (or your stocktaker) to analyse inefficiencies and shortcomings over longer periods of time; vital to the ability to analyse whether your supplier relationships are worth keeping in the long run.
Keeping your documentation for a minimum of 6 months is standard practice and will make sure that if you find any inconsistencies that you have the proof to go back to your supplier with.
Your record keeping procedures for stock movement are another important point to remember. Knowing where your stock is at all times will ensure that your oversight of the total stockholding is as good as perfect. Make sure you have internal processes in place to enable easy but tight stock movement within your venue. And make sure you train your staff on the role they play in this…we’ll cover training again a bit later.
Without proper organisation, record keeping becomes an almost impossible task. Before sending out our stocktakers to sites, we always advise our clients to make sure that all stock areas are tidy. The obvious reason for this is that it makes their jobs a lot easier! But in actual fact it is vital to achieving better stocktake results.
Staying organised means that you know what your stockholding is at all times and more importantly, that you sell through useable stock – improving yield. Beyond this, a tidy and well organised cellar and storage area gives you the obvious benefit of improving your critical response time at peak time. When you are at your busiest and your chef is desperately shouting for more potatoes you’ll know where to run to get what’s needed. It also helps avoid awkward situations like running out of stock. You are aware when you are running low on particular products and should never have to apologise to customers about having ‘run out of pickles’.
Make it a habit to place the oldest stock in front of, or on top of, the newer stock. It is truly a stress-dissipating concept to be certain that your old stock is not hiding underneath a load of newly supplied boxes and rotting away for you to find one day in the future. Removing all empty kegs and cases and disposing of empty cardboard boxes, or putting them to one side ready for collection, as a regular task is a great way to keep your storage areas as empty as possible at all times.
It is good practice to have done your own counts of full kegs and cases of packaged beers/ minerals in your cellar and any other items not under separate lock and key. That way you can verify the results of your stocktake and won’t be shocked to find that you have a lot less in your storage room than you thought you did!
On a side note, a tidy work area will also automatically make it much easier to keep your venue clean and hygienic.
This really is on a similar strand to organisation but storing practices really are worth expanding on. We often tell our clients, treat your stock like you would your cash. Viewing stock as more than just a commodity, and instead seeing it as a form of cash might cause you to start treating it differently. You would not place a £10 note amongst your £5 notes, or crush it into an unrecognisable state. So why would you handle your stock in that way?
This stock control practice includes the careful dating and labelling of your products, through which you guarantee that stock is used up, rather than that it goes out-of-date. If you do come across any out-of-date stock, you will know to destroy it immediately. Storing products in the correct places by following supplier instructions carefully is the second part to this.
Many pubs and hotels have old or non-moving stock lying around in the cellar or bars. This wastes precious storage space (as there is never enough) and leaves money tied up in the business. Use promotions such as ‘World Cup’ colours cocktails to dispose of slow moving spirits and liqueurs and a bin end table to reduce old list and redundant wines. The customers appreciate getting a bargain and you turn superfluous stock into valuable sales.
Training is about maintaining staff efficiency and good practice. For example one area where losses can be reduced (and therefore margins improved) is in pouring techniques.
Most pints (with the exception of cider) have between a 4-5% head, which should, if managed correctly, filter through to your stock results and profits. It is vital that all staff are trained in what appears to be a simple function of pouring a pint of beer.
Many service staff, and particularly those from Europe, have a tendency to over pour draught beers so as to gain a very large head; whilst this may produce an aesthetically pleasing product it renders huge amounts of beer lost to wastage, and leaves drip trays constantly full and requiring regular emptying. Getting the staff to pour all of this into a bucket, in order to measure and record these amounts, will help to verify the true losses in this largely unaccounted for area. Staff training is therefore the key to avoid this over pouring, and thereby reduce these excessive and easily preventable losses.
Other areas of training include, as mentioned before, training your staff to follow internal recordkeeping, storing, organisation and delivery checking procedures. Help them understand why all these areas are important to the business and you might get more buy in from your staff and ultimately better stocktake results.
Make use of your stocktaker too – they know the trade and can help impress the importance of stock control practices on the staff that have the greatest influence on stocktake results. As a rule Venners try to ensure that any stocktake completed is accompanied by an operator or chef. This is not only to ensure that we are being held accountable for our job, it is so that the operator or chef can shadow our stocktaker and learn to identify key areas of concern for themselves. Carefully sitting down with the site operator to go through their monthly stocktake results allows our stocktakers to convey the real data and proof behind their suggestions. Willing operators will soon learn and go on to teach their own staff in areas of improvement.