Recipe For Success - Stock Control in Your Kitchen

How do you control something so variable as the stock in the kitchen. Most businesses simply decide it is to hard to achieve a benefit from the time invested. Some start the process but attempt to control everything through to a grain of salt and realise that they are on a road to nowhere and eventually give up. But it is not impossible and there should be a concerted effort in all hospitality businesses to control stock in your kitchen.

Implementing stock control in your kitchen is a step by step process. Sometimes you will already know some of the stages so you can skip over them.

Step 1. Work out the Recipe and Cost of each Item

When building a new menu it is critical to know how each menu item is made up. This is can be done in your Stock Management system or if you don't have one then you can use a simple spreadsheet to calculate it. The processes is to know the cost of each ingredient, the amount of the ingredient that goes into the item and then add all these up to be the total cost of the meal. Once this is done on all of the menu items you will know what the average cost of goods percentage is for your menu by adding up the cost of each meal and dividing it by the total selling price (less tax) of every item to give you the COST PERCENTAGE of your menu. This is the GOAL.

Step 2. Simple Stock Control

Once you know the GOAL it is important to measure it. The only way to do this is to do monthly stock takes of the items in your kitchen. You need to know four figures. (a) The value of the stock at the start of the month (or the value from the end of last month), (b) the total purchases of food items your kitchen has purchased, (c) the value of the stock at the end of the month, (d) the total sales (less tax) of food sold during the month.

From that you can work out the actual COST PERCENTAGE using the following calculation: a + b - c = e (total stock value used in the kitchen), e / d = actual cost percentage. If this figure is greater than your GOAL from step 1 then the kitchen is using more than the menu was designed to cost.

Step 3. Start to Control Stock

It is likely that a small portion of your stock in the kitchen make up a large portion of the value of stock used. For example; in a restaurant with a focus on Steak then 80% of the sales in that restaurant will be related to the red meat stock items. The kitchen will purchase a lot of these items and these purchases will be the majority of the food bill. If we can control the stock of these items then at this stage it can be assumed that the other peripheral items (lettuce, cheese, carrots, etc) will be in line with the goal. These items, if out of control, will also be the most likely items that are causing the actual cost percentage to be greater than the goal cost percentage.

Using your recipe in stage 1 and your Point of Sale system, build the recipes in your Point of Sale system to reduce the stock of these items (e.g., Red Meat, Fish, Poultry) for each menu item. At this stage do not worry about the peripheral items like lettuce etc as this step is about controlling the high priced purchases.

Once the recipes are inputed into your Point of Sale system you can continue with your stock control processes. If possible perform a stock take of the kitchen weekly. The sooner the stock in the kitchen is under management the sooner the cost percentage will be in line with control. This is only achieved by regular stock takes, so the more that are done the shorter the time frame and the more costs saved to the business. As the recipes will now be in your system the calculations from Step 2 are still accurate but in addition you can monitor the variances of the high priced items. The ones that contribute to the bulk of the kitchen's purchases.

A good Point of Sale system used in the kitchen will report similar to following

Item Opening Stock Purchases   Sales Closing Stock Stock Counted Variance
Ribeye KG 15.50 10.00 17.20 8.30 4.00 4.30


This example shows that Ribeye Steak is missing 4.3 KG's over the stock take period. Your Point of Sale system will show the value of this variance in dollars. The process is to reduce this variance down to something acceptable.

Step 4 Increase the items from Step 3 that are under Stock Management

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