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 Question from reader regarding inventory control

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  • Total Posts: 174
  • Joined: 10/5/2006
  • Location: phoenix, AZ
Question from reader regarding inventory control Sat, 06/13/09 2:34 PM (permalink)
Howdy folks, I just got a private-message thing here with a question from another reader. It says "Can you teach me a little more about "calculating percentages" on a hot dog cart & inventory control.  I assume you have a hot dog cart?  Do you have any forms (tools) already put together that you ight can share with me. I have not yet started but will be in the next few weeks.  I could use all the help I could get.  Thanks."

I post it here because many of you have more experience at this than I do. I'm not sure I'm the one to be teaching that class. We got this guy in Phoenix, BP's Hot Dogs who does such finite analysis of all inventory, time and sales that he can tell you at any given moment how many dogs he has, how many he's sold and how many he's selling per hour.

The percentages thing--first of all that is conducted by an outside auditor and second, it's very much about opened product and inventory and we don't usually retain opened product so that tool isn't of that much use to us. Simple inventory control for us is we know what we're ordering, selling and throwing away. So just maybe the basic concept of starting in and counting out would be good for you.

Each day you should know how many dogs, buns, sodas, chips are going out on each cart. Record this on a sheet of paper for each cart each day. Also record your "starting bank" which is the cash on hand to make change. At the end of the day, count out the cash and record it, record any remaining inventory like buns, chips, etc. and record how much extra dogs you have which will be disposed of in whatever manner. Usually it's dog-food but the Sabbretts are actually engineered to be saved overnight, that's an acception to the rule.

But once you have this information, this data collected, you can start to understand which carts are most productive in terms of sales, which are most efficient, and lots of other stuff. But the numbers should jibe. The starting bank + the money in sales should = the money represented by the missing inventory + the leftovers or wastage for the day. Some guys get it down to where if the count is a dollar off, they'll go find out why. "Sorry boss, I dropped a soda, it exploded so I threw it away" is the kind of answer you want to hear. Tell them next time, just record it as wastage and everything is fine. But that gets more into marketing data than inventory control.

Back to inventory control for a cart, we just addressed our "front of house". The "back of house" for most of us is the commissary where we keep things refrigerated or frozen. Our limited menu allows us to primarily rely on simple FIFO or "first in, first out" type of product rotation I assume the reader knows. Make sure the dates on everything is very clearly marked with a sharpie. For the big restaruanteur, what goes on in the walk-ins and freezer is a crucially big deal. If restaurants published their full financials we could all see which among them has the best executive chef unless they are a franchise in which case that expertise is all computerized. Because most small-houses, most of the bistro-type restaurants which people tend to think are pretty classy, a lot of those guys go under because they are throwing away product. For something like Red Lobster, they get finite data on ALL of their locations, they know exactly what locations are under-performing just like we can spot them on the street.

Getting back to lil' ol' us, inventory control should be a piece of cake. If you have multiple carts out there, it does add some pretty boring administrative work, piling all that data up in spreadsheets every day or week, but you kind of have to do it. Gods I'm glad I haven't got into that yet. I do events. All the numbers are in my head. I simple count-out at the end of the event tells us where we are in terms of target net. I dump it into the spreadsheet when I get home and now and then I run my numbers to make sure I'm staying within my margins. Since it's just me and the wife working, I don't even bother with a COGS on myself because that adds in cost of labor (the only thing that analytical tool is good for anyway) and I frankly don't count my labor in anyways. Nobody else in this family does so why should I?


    • Total Posts: 95
    • Joined: 1/13/2009
    • Location: Sedona, AZ
    Re:Question from reader regarding inventory control Sun, 06/14/09 6:21 AM (permalink)
    Your commissary is in the back of your house? I am curious what you had to do to get approved for that.

      • Total Posts: 421
      • Joined: 3/5/2009
      • Location: Maryland
      Re:Question from reader regarding inventory control Sun, 06/14/09 12:34 PM (permalink)

      Your commissary is in the back of your house? I am curious what you had to do to get approved for that.

      He does not mean the back of his living house (home) The front of the house is the term used to describe your greeting area, waiting area, lounge, etc, etc that the customer sees or passes through or will be seated. The back of the house is the term used to describe your kitchen, sinks, storage etc or the working area of your place that is most times an employee access area or the nuts and bolts of your place.

      When you shop for supplies online sometimes they have it broken up in sections this way. Front of the house ( napkins, dinner ware, fictures, etc) Back of the house, (steam tables, cooking pans, etc) so you dont waste time looking in the wrong section of the website.

      <message edited by That'sMyDawg on Sun, 06/14/09 12:35 PM>

        • Total Posts: 95
        • Joined: 1/13/2009
        • Location: Sedona, AZ
        Re:Question from reader regarding inventory control Mon, 06/15/09 12:49 AM (permalink)
        Thank you I had no idea.

          • Total Posts: 69
          • Joined: 6/22/2012
          • Location: Grand Rapids, MI
          Re:Question from reader regarding inventory control Mon, 07/16/12 11:08 AM (permalink)
          I am doing farm to fork.  I have done a few searches and this was the closest thing I can find to my topic.  Anyone else doing this?  If so whats your menu rotation look like?  I am thinking monthly, but would like to do weekly.  Its risky changing menus so much so I was thinking of maybe a small 3 item preset staples that never change.  Next is my question on beverages.  What are you all doing?  Bottled vs fountain, i know fountain takes up a ton of space and most people are running bottles just for efficiency.  I also saw that some people have disregarded both and offer only 2 beverages which are made in house.  this is very appealing to me but im wondering how it sells in comparison.  Im sure some of you have tried this already. 
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