Controlling stock and waste is vital for any hospitality business. More often than not, wastage, whether it be spoiled goods, theft or over ordering will have a significant impact on both your revenue and profit.
It is easily overlooked – while your team is business focusing on delivering on orders as quickly as possible, and while you as the owner are focused on managing the process, there often isn’t much time to consider in detail whether or not efficiency exists along your production line. From ordering your raw materials, to serving your customers, there are efficiencies to be made that will have a fantastic impact on your revenue and profit.
Over-production
The over-production of products isn’t good for any business. Non-perishable goods sit around taking up space that could be used for other items, and perishable items are lost to the trash at the end of the day. For the hospitality industry, over-production of perishable goods is a problem. With an average of 2.2 million tonnes of food wastage occurring through the Australian hospitality sector each year, and $20 billion being lost overall to food wastage, there’s room to improve the position in any business.
Over-production might be occurring in your business if your staff are creating too many portions, consistently selling products in larger portions that set or pouring too many drinks for an event that is being hosted at your venue. You can cut down on over-production by reviewing the average daily sales for each of your products and preparing just the right amount, by giving staff clear guidelines on portion sizes, and by training staff to review and confirm customer orders before that order moves to the kitchen or bar staff.
Inventory waste
Inventory wastage occurs when additional raw materials are ordered, leading to spoilage or theft of those items. If you’re looking to decrease the spoilage of raw materials, consider carrying out regular stock takes on your raw materials against past inventory orders, and against your sales. This will allow you to build an understanding of what you really need, and what is currently an excessive order leading to unnecessary cost. Stock takes and audits against your sales is also a great way to keep an eye on potential theft from within the business. If your business has an abundance of unsold inventory, it can become tempting for staff to take or two small items here and there, particularly when those items are perishable. It could be a coffee made on the side or a cookie here and there, but that theft will impact your profit and loss, and it needs to be reviewed regularly.
A profit and loss review will give you insight into whether or not you have inefficiencies in your business, and identify ways to decrease wastage.