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Product Management - Part III
By Rick Braa, CHAE Published: 08/17/2010
One of the greatest influences on product cost is theft. A solid set of controls is necessary. Creating and maintaining trust in operations is a critical success factor. One objection to tighter controls is, “I trust my people, and I don’t want to create an atmosphere of mistrust.” Interesting. In an industry that traditionally boasts greater than 100% turnover, and a theory that 80% of people are dishonest under the “right” circumstances, trusting those that come and go with the keys to the business is mystifying.
Here are some of the simplest and most overlooked controls that should be in every foodservice operation:
1. Standard Receiving Procedures- ineffective receiving processes are estimated to cause 50% of product cost problems. Train a trusted crewmember to receive orders by matching the order guide to the invoice, the invoice to the order by inspecting and weighing product, and receiving a credit memo on the spot for unacceptable items. Put the items in storage immediately after receiving.
2. Bartender Blind Drops-anytime a bartender balances sales to the till the risk of theft skyrockets. Experience shows that as much as 3-5% of beverage sales are lost when bartenders balance to sales. Eliminate access for bartenders to sales information. Require bartenders to keep all tips separate from the till, count and verify what will be dropped then drop everything from the till into the safe. Whoever balances cash on a daily basis can balance all bartender paperwork.
3. Locked and Alarmed Back Door-inventory is valuable, if stolen it is likely to “walk” out the back door. Require crewmembers to enter and exit through the front door. All access through the back door should be supervised and/or limited.
4. Managers Void, Comp and Transfer Items- Unrecorded Sales have a direct correlation to higher product cost. Anytime a crewmember can void or comp, opportunity for theft increases since an item can be voided or comped after the guest has paid or can be given away without management knowledge. Theft through transferring items is for the seasoned professional. Many POS systems allow the transfer of items from one table to another. A hole exists where a server can transfer items that do not need to be rung in to be served. For example, a server can pour his own soda. He rings and serves the item, collects from the guest and prior to closing the table transfers the soda to another table thus reducing sales and pocketing the difference. All guests ordering that item pay but the sale is recorded only once.
5. Crew Hotline-Establish an anonymous voicemail box where a crewmember may call and leave a tip regarding theft or other sensitive topics. Statistics show that 40% of theft is caught by “tip off”. Crewmembers report 57% of those tips (source ACFE).
Better business practices are not an issue of trust but responsible management. Put these basics in place and you will see better product cost and more money on the bottom line.
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