Receiving, Storage, and Inventory Control PDF

CHAPTER FIVE RECEIVING, STORAGE AND INVENTORY CONTROL The processes of receiving, storing, issuing, and inventory control influence not only a health care food service’s costs but also the quality of the food served to its customers. Critical steps in each process should be monitored as...

CHAPTER FIVE RECEIVING, STORAGE AND INVENTORY CONTROL The processes of receiving, storing, issuing, and inventory control influence not only a health care food service’s costs but also the quality of the food served to its customers. Critical steps in each process should be monitored as part of the department’s continuous quality improvement efforts. These processes and how they are related to and influence the health care food service operation are examined in this chapter. How to receive goods, inspect them for correlation between the quality and quantity specified in the purchase order and those of the materials delivered, and maintain receipt documentations are also discussed. Once shipments are accepted (and rejections returned immediately), they must be stored properly. Procedures and conditions for dry storage items and low-temperature storage items are delineated. Conditions for proper storage area upkeep (cleaning and sanitizing) are outlined. For example, floor, window (if applicable), wall, and ceiling maintenance recommendations are provided, along with suggestions for shelf height, shelf–wall clearance, lighting and light fixture, and ventilation. Ideal storage temperatures and humidity levels for specific foods also are detailed. Ancillary storage equipment—refrigerators and freezers, thermometers, and mobile equipment, for example—are described. Because food service inventory represents the bulk of a department’s financial investment, inventory control, cost containment, and continuous quality initiatives are critical factors that department directors and buyers must always keep in mind. Therefore, significant attention is given to how foods and supplies are issued throughout the production and service areas. Specific inventory control tools are provided; these include perpetual inventory calculations and physical inventory taking. Other techniques (all oriented to the accounting concept of “first in, first out” [FIFO]) are described as well. Receiving Procedures The receiving area should be located near the loading dock, storeroom, refrigerators, freezers, and ingredient control area to facilitate the movement of products into proper storage. This is a security and food safety measure. An effective procurement system requires adequate receiving procedures to ensure that the food and supplies delivered match the quality and quantity of the items ordered. The economic advantage gained from competitive bidding based on well-written specifications easily can be lost as a consequence of poor receiving practices. Acceptance of poor-quality products or incorrect amounts can mean financial loss to a food service department. This risk can be eliminated or minimized if sound receiving procedures and properly trained personnel are in place. Receiving procedures vary among institutions, but some basic rules apply to all facilities. Responsibility for checking quantities should be assigned to receiving or storeroom personnel. In small organizations, this may be one of several tasks assigned to production personnel. Inspection and evaluation for quality should be the responsibility of someone who knows the specifications or at least is qualified to judge the quality of the goods being delivered. Whoever is charged with inspecting shipment deliveries should prepare ahead of time for each one. They should understand the process by which products are received and know what to do if a problem occurs with an incoming shipment. Deliveries should be made at scheduled times and days. This means knowing the delivery dates and approximate times so that space and equipment can be made available and knowing how to complete receiving records. Because most deliveries are made on a regular schedule, this should be relatively easy. Receiving staff should immediately check the merchandise, perishable items first, preferably while the delivery person is still present. The count, weight, quality, and condition of the merchandise should be compared with the purchase order or quotation sheet before delivery is accepted (Figure1). Scales should be available for checking items ordered by weight. Any cases or cartons that appear damaged should be opened right away. The quality of fresh produce should be inspected at the top and the bottom of each container. The internal temperature of all frozen foods should be 0°F (–18°C). If the temperature exceeds 0°F, the foods should be rejected. If such a detailed check is not possible, the receiving staff should inspect packages for signs indicating that the product may have been subjected to undesirably high temperatures. Wet or dripping packages should never be accepted. Next, the staff should date or tag all chilled, frozen, and nonperishable foods as they are received to ensure their use on a FIFO basis. Such foods should be stored immediately. (The price per unit can be recorded on frozen and nonperishable items at this point.) Meat tags are a good idea for tagging all large pieces of meat (Exhibit 18.1). These tags can be purchased from large supply companies. Use meat tags to assist with inventory, to label FIFO meat, and to assist in avoiding theft. This is a two-part tag that is attached to the product before it is placed in storage; the duplicate copy is filed, and when the product is issued from storage to production, the tag is compared with the copy on file. This method helps in the rotating of stock and in determining daily food costs. This method may not be useful in small institutions because it is time-consuming. Invoices or delivery slips are stamped with an invoice stamp (Exhibit:2), and the receiving clerk initials the appropriate line. Information is then entered into a computer file and sent to the finance and accounting department. Only after foods have been inspected, dated, tagged, stamped, and approved should the staff sign the delivery slip from the vendor and fill out the required receiving report. Unordered or rejected merchandise should be returned immediately. Nonperishable foods and supplies should be transferred to appropriate storage areas as soon as possible (nonfood items should always be stored separately from food supplies).  Receiving and issuing staff should be provided needed equipment to perform their functions. This includes hand trucks or forklifts that can move pallets. Pallets are portable wooden or metal platforms for handling by a forklift truck and can be used for storing products in the storeroom. Scales that weigh items up to 200 to 500 pounds, desk, chair, computer, calculator, crowbars, and short-blade knives for opening containers and packages are also needed. Digital computerized thermometers to check chilled and frozen foods, clipboards, pens, pencils, marking pens, and meat tags should also be available. Electronic receiving tools such as those that read bar codes and tabulator scales that weigh and automatically print the weight on paper are used in large-scale food service operations. Institutions with a centralized receiving department usually require a written report for all merchandise received. The food service director and the buyer should have copies for their files. Two receiving methods are used most often in food service operations. These methods are invoice receiving and blind receiving. Invoice Receiving Invoice receiving involves having a receiving clerk check the items delivered against the original purchase order or telephone order (documented in writing) and note any discrepancies. This method makes it easy for the clerk to check the quantity and quality of the materials delivered against the specifications. Invoice receiving is quick and economical, although it loses its advantage if the clerk fails to compare items delivered with the specifications and simply uses the delivery invoice as a reference. Blind Receiving With blind receiving, the clerk uses an invoice or a purchase order that has the “quantity ordered” column blacked out. The clerk records the quantity actually received for each item on the invoice or purchase order—not on the supplier’s invoice. This method takes more time than invoice receiving because it requires that the clerk prepare a complete record of all merchandise delivered. Even so, blind receiving is the more reliable method of the two. Record Keeping Maintaining records of all merchandise delivered is as important as inspecting deliveries for quality and quantity. The methods and forms used for this purpose may be simple or complex, depending on the level of documentation required. A receiving record must be kept so that all personnel involved in purchasing, using, and paying for supplies are informed of what was received. Depending on whether receiving is centralized or takes place in the food service department, one or more of the following records may be used. Merchandise Receipt A merchandise receipt like the one shown in Exhibit 3 may be required for each shipment received. This type of form is completed by a receiving clerk in the central storage area, who sends copies to appropriate department staff members in purchasing, food service, accounting, and so forth to inform them that the goods have been received. Notations of items ordered but not delivered or items returned may be included on this form or on a separate form (called a credit memo) used for this purpose. The merchandise receipt and the credit memo should be signed by the person taking delivery and either attached to the invoice or sent separately, depending on the department’s policy. (The procedure for routing receipts and credit memos should be clearly stated in the department’s policy and procedures manual.) Receiving Record A daily receiving record similar to the one shown in Exhibit 4 may be required, in addition to the merchandise receipt. Alternatively, it may be the only form used to record incoming goods. Either or both records can be used to verify receipt of merchandise. The forms also are a source of information for processing payments in the accounting department or for updating inventory records. Security Security concerns become important during the receiving process because there are many opportunities for employee and supplier theft. Some of the more common methods include:- Receiving the wrong item and paying a higher price for lower-quality products (6/10 sliced peaches in light syrup rather than 6/10 peach halves in heavy syrup) Receiving products that have been thawed and represented as fresh Receiving short weight or count (or both): paying for products not  received Grinding ice or adding dry milk or soy products as extenders Including weight of ice in fresh chicken and being charged for ice The food service director or manager should monitor and check security in the receiving area on a random basis to ensure that procedures are followed. It is important to recheck weights, quality, and quantities. Persons responsible for purchasing should not be responsible for receiving. There should be scheduled days or dates for deliveries. Products should be moved to storage immediately. There are many more ways to be dishonest. Cameras, locks on doors, allowing only authorized personnel in the area, and well-written policies and procedures that are strictly followed help to deter some of this behavior. Doorbells can be installed to permit delivery personnel to signal their arrival. Salespeople should not enter the department through the loading dock, receiving room, or storeroom. Storage Procedures Dry storage and low-temperature storage facilities should be accessible to both the receiving and food preparation areas so that transport time and corresponding labor costs can be kept to a minimum. Ideally, these facilities should be on the same floor as the production area, but if this is not possible, space should be allocated in the production area for one or more days’ supply of foods. The storeroom should be equipped with a scale that is capable of weighing items up to 200–500 pounds, along with a smaller scale for weighing smaller items. Dry Storage Maintenance The amount of space required for dry storage depends on the types and amounts of foods needed, the frequency of deliveries, the facility’s policies on inventory size, and the amount of money invested in inventory. These factors vary from one institution to another. Storage areas should be dry and easy to keep free of rodents and insects. Walls and ceilings should be constructed of nonporous materials, and ceilings should be free from water and heating pipes. Any windows should be screened and equipped with an opaque security sash to protect supplies from direct sunlight. Floors, preferably made of quarry tile, terrazzo, or sealed concrete, should be slip resistant. All components—walls, ceilings, shelves, and floors—should be easy to clean. All parts of a storage room should be well lighted so that supplies and labeling are visible and housekeeping can be achieved properly. Light fixtures covered with wire mesh help protect against breakage and shield employees from falling glass should breakage occur. About two or three watts of light per square foot of floor area is recommended, with fixtures centered over the aisles. Ventilation and temperature control are critical to dry storage rooms for retarding deterioration of food supplies. A temperature range of 50°F to 70°F (10°C to 21°C) is recommended. A thermometer placed in a highly visible location (for example, at the entrance) is essential. Fans or other specially designed systems should provide ventilation. To promote security, it is preferable to have only one entrance to the storage area so that deliveries and supplies can be monitored. Access should be limited to employees responsible for inventory control and receiving. Secure locks should be installed on all doors, and keys should be carefully safeguarded (for example, by a key sign-out system). A door width of at least 42 inches allows easy movement of supplies into and out of the area.  Miscellaneous supplies and broken (open) case lots can be stored on adjustable metal shelves installed at least 2 inches from the walls. Specific guidelines for shelving and spacing between shelves are discussed in Chapter 21. The aisles between shelves and platforms should be wide enough to accommodate mobile equipment. Metal or plastic containers with tight-fitting covers should be used for storing dry foods such as cereals, cereal products, flour, sugar, and broken lots of bulk foods. Containers, which should be legibly and accurately labeled, can be placed on dollies for ease of movement from one place to another. Foods packed in glass should not be exposed to direct sunlight or any other strong light. When possible, purchase and store products in plastic containers rather than glass. Toxic materials used for cleaning and sanitation should be clearly labeled and kept in a locked storage area away from food supplies. Empty food containers must never be used for storing broken lots of toxic materials, nor must empty cleaning and sanitation containers be used to store food. Food should be stored only in food-grade containers. A worktable should be provided near the entrance of the storeroom for unpacking supplies, putting up small orders of bulk products, and assembling orders. Large and small scoops should be on hand for each food container in use, such as bins for flour, sugar, cereal, and so forth. Scales need to be accessible for weighing small and large quantities of food. Several types of mobile equipment, such as platform dollies and shelf trucks, may be needed for delivering supplies to the various work areas. Hand- washing facilities are essential and should be located near the storeroom entrance. A regular cleaning schedule should be developed and a staff member or crew assigned to the tasks of cleaning the floor, walls, ceiling, light fixtures, shelves, and equipment in the storeroom. Routinely, the food service director or a supervisor should inspect the area. Any violations of sanitation standards and facility policies should be corrected immediately.  Fireproof refuse containers that are located in conformance with local public health laws should be emptied at least daily. Leaking or bulging cans of food and spoiled foods must be disposed of promptly. The storeroom should be treated regularly for the control of rodents and insects. Further information on safe and sanitary preservation of food and supplies in dry storage areas is available from local and state public health departments. Stock should be systematically arranged, and inventory records should follow the same system to save time when stock is issued or inventoried. New stock should be placed behind like items so that the older stock will be issued first, again using the FIFO method. As mentioned, each item should be marked or stamped with its date of delivery and unit cost as it is placed on the shelf. The cost can thus be noted on the inventory sheets as the actual count is taken in the physical inventory. This method permits rapid computation of the cash value of inventory on hand. Price marking also is an effective way of familiarizing production personnel with the cost of foods. A quantity of bagged items, such as flour and sugar, should be cross- stacked on slatted platforms or racks raised high enough above the floor to permit air circulation. Bulk cereals, rice, grits, cornmeal, dried vegetables, and dry milk should be refrigerated if the storeroom temperature cannot be maintained below 70°F. When cases of canned foods are stacked, their labels should be exposed for easy identification. Cartons of foods packed in glass jars should be kept closed because light tends to change the color and flavor of some foods. Dried fruits can be stored satisfactorily for a limited time in their original boxes if the storeroom temperature can be kept below 70°F and the humidity below 55 percent. If refrigerated space is available, storing dried fruits at lower temperatures will retard mold growth. Spices should be stored away from heat. They should be checked regularly for pest infestation. Bananas should be kept in the dry storage area or at a temperature of 60°F to 65°F (15°C to 18°C). To prevent bruising, they should be left in the delivery boxes. Because a temperature of 58°F (14°C) or below darkens the flesh of bananas, they should not be refrigerated. Un-ripened fruit and vegetables should be placed in dry storage until they become edible (unripe melons, peaches, pears, pineapples, plums, avocados, and tomatoes ripen at 65°F to 70°F [18°C to 21°C]; colder temperatures, however, can damage these products so that they will not ripen). Potatoes should be stored away from light, if possible, in a dry, well- ventilated room at a temperature of 40°F to 55°F (4°C to 14°C). If peeled potatoes are purchased, they should be refrigerated and held no longer than the number of days suggested by the processor. Sweet potatoes and winter squash keep best in a well-ventilated room at a temperature of 50°F to 60°F (10°C to 15°C). Sweet potatoes spoil more quickly under refrigeration than in dry storage. Onions keep best in dry storage at a temperature of 40°F to 60°F (4°C to 15°C). It is important to avoid indiscriminate overbuying because food quality can deteriorate even under the most ideal storage conditions. Products should be stored 6 to 10 inches above the floor, 2 inches from the wall, and 18 inches from overhead sprinklers. Low-Temperature Storage Maintenance To preserve their nutritional value and appeal, perishable foods should be placed in refrigerated or frozen storage immediately after delivery and kept there until they are to be used. The type and amount of low-temperature storage space required varies with the facility’s menu and purchasing policies. Some food service operations are fortunate to have separate refrigerated units for meats and poultry, fish and shellfish, dairy products, and vegetables and fruit, with separate freezers for ice cream and other frozen foods. Separate facilities are desirable because each kind of food has its own ideal storage temperature. However, satisfactory storage conditions can be maintained with fewer units following these temperature guidelines:- Fruit and vegetables (except those requiring dry storage): 40°F to 45°F (4°C to 7°C) Dairy products, eggs, meats, poultry, fish, and shellfish: 32°F to 40°F (0°C to 4°C) Frozen foods: –10°F to 0°F (–23°C to –10°C) If separate refrigerators and freezers are available, foods should be stored at the following temperatures:- Fruit: 45°F to 50°F (7°C to 10°C) Vegetables, eggs, processed foods, and pastry: 40°F to 45°F (4°C to 7°C) Dairy products: 38°F to 40°F (3°C to 4°C) Fresh meats: 34°F to 38°F (1°C to 3°C) Fresh poultry: 32°F to 36°F (0°C to 2°C) Frozen foods: –10°F to 0°F (–23°C to –10°C) In large institutions, walk-in refrigerators and freezers are common. In smaller operations, the trend is away from walk-ins and toward “reach-ins” because available storage space is used more efficiently, less floor space is required, and cleaning is easier. Regardless of the type of refrigeration available, location is the key for saving labor and avoiding nonproductive work. Walk-in refrigerator doors should be flush with the floor so that movable racks or shelves can be wheeled in and out with ease. Employees should be trained to obtain all supplies needed at one time to eliminate the constant opening of doors, which increases energy usage. Refrigerators and freezers should be provided with one or more thermometers, such as a remote-reading thermometer, a recording thermometer, and a bulb thermometer. The remote-reading thermometer, placed outside the refrigerator, shows the temperature inside. The recording thermometer, also mounted outside the refrigerator, has the added feature of continuously recording the temperature in walk-in, low-temperature storage. One can see at a glance any fluctuations in temperature. The bulb thermometer probably is the most common one used for refrigerators and freezers that do not have a thermometer built into the door. The warmest area of the unit should be determined and the thermometer placed there. Whichever type of thermometer is used, a staff member should be assigned to check the temperatures in all units at least once a day, preferably in the morning and in the evening, and to record the data on a chart.  Humidity also is important for maintaining food quality because perishable foods contain a great deal of moisture, and evaporation will be greater when the air in the refrigerator is dry. Evaporation causes foods to wilt, discolor, and lose moisture. Food held at low humidity shrinks considerably and requires extra trimming. Although a humidity level as low as 65 percent is suggested for some products, a range between 80 and 95 percent is recommended for most foods. Good air circulation should be provided throughout the refrigerators and freezers at all times, with foods arranged so that air can circulate to all sides of the pan, box, or crate. For sanitary reasons, foods should not be stored on the floor. All foods are to be covered and labeled with the receiving date. Most foods should be left in their original containers— mandatory for frozen foods—to reduce the possibility of freezer burn and drying. Fresh produce should be examined for ripeness and spoilage before it is stored and may be transferred to specially designed plastic containers if it passes inspection. The paper wrappings on fruit should be left on to help keep them clean and to prevent spoilage, moisture loss, and bruising. Computerized Inventory Management System Technology is available for computerizing receiving, storage, and issuing. Some systems link inventory files with recipes, ingredient files, and forecasts. With this system, the storeroom manager can monitor stock levels, assess reorder points, calculate actual product usage, and calculate daily cost. These systems can calculate variance between actual usage and expected usage based on production and number of servings. Most computer systems can operate on the basis of perpetual inventory system, minimum-maximum,par level, or any variety of methods. Some systems can track products through purchase, storage, issuing, and usage. As technology improves, theprocurement system will be simplified.