Constructive Ways to Control Costs and Effective Sourcing

While, it’s nice to have some relief now that pricing on many commodities has come down, it’s certainly not the time to take your eye off the ball. It’s been great for news for restaurants that most proteins, such as beef, pork and turkey have decreased compared to last year; along with wheat, corn and even oil prices. Now that there is some breathing room, there is no better time to implement new and improved ways to control your costs.

There are many ways to constructively control costs and source products more effectively. However, you first need to decide which options are relative or have an emotional component that would prevent implementation. Once that has been determined, you and your teams can confidently move forward. Here are a few ways how:

Use the Right Product Specification

Detailed specs are needed to ensure consistency of your products and to accurately compare prices. Once you have the right specifications, use them and adhere to them. For example, try using pollock instead of cod for fish and chips, especially if pollock is cheaper. Don’t use 5×6 vine-ripened tomatoes if you are chopping them up for salsa.

Manage Inventories Effectively

An order guide form should be used to manage and track all products that you need to order and inventory. Refer to historical usage, adjust your pars as necessary and maintain inventories at optimum levels to support sales between deliveries, but minimize waste and spoilage. To avoid theft, keep the high-value items locked up in a special area where only the manager has the key.

Consolidate and Manage Deliveries

Where feasible, reduce the number of distributors and deliveries to increase your drop size. Less deliveries means less labor and less cost for the distributor, which should be passed on to you. And don’t accept deliveries during meal periods. You will be too busy to properly check in an order so make sure your suppliers know your acceptable delivery time periods. Whenever possible, use a calibrated scale to weigh products you buy by the pound to make sure you are getting what you are paying for.

Check your Garbage

It’s often overlooked, but finding food in the trash could be a sign of theft, over-portioning or other food-utilization problems. It may tell you if you need to provide more employee training, or if forecasting needs to be adjusted.

Don’t waste energy

Energy efficiency is an untapped area of cost savings. Don’t turn on equipment until you need to. Turn off lights when leaving a room or cooler, or install motion sensors. Use programmable thermostats. Use LED or CFL lighting. Use low-flow sprayers at the dish-washing station. Maintain equipment properly so they run as efficiently as possible. Utility costs typically range anywhere from 2½ – 4½ percent of sales. Implementing small behavioral changes and installing simple energy saving devices can produce significant cost savings.

Every penny counts and every effort can lead to cost savings. I used to have a cross country coach back in high school that made us run hills in preparation for races. He always said: “We train on the hills to pass our competition on the hills.” Now is the time for your organization to “train” and implement constructive cost saving preparations. This is because when food prices start to rise again — and the hill is approaching — you want to be ready to pass by your competition.