C-PURCH: FOOD COST CONTROL

Food Cost Control

• Shrinkage refers to losses from theft, portioning errors, or miscalculations.

  To prevent shrinkage:

  • Implement monitoring systems.
  • Maintain purchasing systems.
  • Ensure proper forecasting.

  Common examples include:

  • Unauthorized consumption.
  • Incorrect pizza sizes.
  • Shortchanging customers.
  • Incorrect recipe scaling.

• Spoilage is food that expires before use.

  To prevent spoilage:

  • Ensure proper food holding and storage.
  • Avoid time-temperature abuse.
  • Use FIFO (First In, First Out) and proper ordering practices.

  Common examples include:

  • Produce that rots in storage.
  • Food left out for too long.
  • Disorganized storage.
  • Overordering.

Forecasting and Production

• Forecasting techniques include monitoring lean hours in a day, identifying lean or busy days of the week, and comparing data over months.
• Other production controls involve scheduling staff shifts and determining which menu items use specific equipment at certain times.
• Standardized recipes are crucial, especially for ovens, to optimize baking multiple items at the same temperature.

Perishable Ingredients

• Using perishable ingredients requires frequent and shorter order/reorder cycles.

  Preservation techniques:

  • Fermentation.
  • Pickling.
  • Brining jams and jellies.
  • Technologies such as freezing, dehydrating, and canning.
  • Vacuum sealing.

Convenience Foods and Labor Considerations

• It is false to assume every business should make everything from scratch.
• Convenience foods include items like burger buns and involve make or buy decisions.
• Convenience foods have a higher food cost but lower labor cost.
• Making food from scratch has a lower food cost but is more labor-intensive.
• Consider comparing the total cost of both options.
• Fermentation and dough development can take several hours or even days.
• Ready-mixes minimize staff errors and ensure consistency.
• Frozen dough in bulk can be portioned for various bread products.
• Labor factors relate to activity-based costing.
• Negligible difference exists in the quality of scratch versus convenience food.
• Establishments cater to different market segments with varying quality expectations.

Activity-Based Costing

• Standardized recipes should detail all activities to produce a menu item or sub-recipe.
• All tasks are considered as a cost pool in activity based costing.
  • For line cooks, the quotient of total labor cost (e.g., PHP 16,000.00) and labor hours (e.g., 220 hours) yields a cost driver rate (e.g., PHP 72.73).
  • If a line cook spends 15 minutes on an a la carte entree, the labor cost is one-fourth of the hourly rate (e.g., PHP 18.18).
  • Some recipes require more than one staff member, so assess whether the labor cost of making from scratch is justified.

Maintaining Standards

• Customer waiting time and its impact on daily sales should be considered.
• Quality standards are not static and may need updating based on customer expectations.
• Avoid complacency; address issues instead of maintaining the status quo.
• Information and materials should be readily available, such as SOPs, standardized recipes, and manuals, with photos.
• Calibrate and set presets for frequently needed equipment configurations.
• Combi-ovens with complex control panels are useful for preset configurations for specific recipes.
• Lower and middle management play a role in ensuring enforcement of standards.
• Implementing standards requires remembering that each menu item has its own set of standard activities like preparing, cooking, and holding.
• Some items may not need cooking (e.g., cold kitchen items like salads).
• Some items may have no prep needed, like ready-made burger patties cooked to order.
• Always order based on production and sales forecasts to avoid overstocking.
• Monitor preparation processes to minimize trimmings and waste.
• Monitor employee consumption and pilferage to control food costs.
• Compare issue and production records with sales records to reconcile inventory.

Quality and Profit Considerations

• Profit-oriented managers aim to sell a profitable product with minimal food cost, regardless of quality.
• Profit-conscious managers sell a profitable product with minimal food cost, using high-quality ingredients in smaller portion sizes to meet targets.
• Quality oriented managers sell an "experience," considering cost implications.