This week, we’re diving into what is possibly a new idea for some of you – perpetual inventory management. Instead of just conducting a physical inventory count once a month or even once a quarter (we recommend more frequent counts than that though), your inventory level is constantly being tracked with the help of specialized management software.
Perpetual inventory management really is not more difficult or more time consuming than relying solely on physical counts, and the benefits that it can provide to your operation are substantial. See for yourself…
Advantage #1: Increase Visibility into Your School Nutrition Operation
By always being able to track the changes in your inventory, you will be able to gain significant insight into portions of your operation that may otherwise seem quite cloudy.
With perpetual inventory management, you will be able to see exactly what each site has at any given point in time. Not only is this helpful for last minute transfer situations, but it also doubles as a safeguard against those managers who may keep a little too much food on the shelf.
Have you ever employed one of those “mother hen” (M.H.) type site managers who effectively hoards extra food? Yeah, I’m pretty sure we’ve all been there! M.H. never wants to run out of food or be caught in a last minute situation, so M.H. orders extra quantities of just about everything. M.H. probably has to throw out items because they expire or spoil and ends up wasting tons of money from your budget. With perpetual inventory management, those pesky M.H.s will be less likely to slip through the cracks unnoticed.
Perpetual inventory management gives you greater visibility into the financial health of your operation, and helps keep a watchful eye on M.H. Through management software, you are able to see exactly how much money you have tied up in inventory district-wide, by school level, or by individual site location.
Advantage #2: Practice Strategic Menu Planning
A slightly less obvious advantage of perpetual inventory management is the ability to strategically plan your menus according to what items you need to use soon. Maybe a batch of items is nearing their expiration or “Best by” date. Alternatively, imagine that the school year is almost over, and while looking at your inventory levels through your management software you find that your district’s central warehouse has an unusually high amount of black beans remaining. Knowing this, you can plan menus for the remaining weeks of school that will use up your surplus of beans. I see a lot of black bean burger patties, burritos, and southwest salads in your future!
An additional benefit of perpetually tracked inventory allows you the ability to make quick and easy menu-item substitutions, should you become aware of a product recall. It’s one of a food service director’s nightmares – hearing of an item recall too late to pull it from the line. With perpetual tracking, recalled items are much easier to find and remove.
Advantage #3: Enhance Awareness and Build Accountability
I know the mentality that is present during physical inventory counts – You just want to finish the count as fast as possible, so you don’t have to worry about inventory until next month’s count rolls around. Well I’m sorry to break it to you, but the “do it and forget it” attitude is not a way to run a healthy nutrition operation.
A large part of successful perpetual inventory management comes from your employees’ themselves. I cannot stress how crucial it is to get your employees to buy-in to the importance of perpetually managed inventory. Like the title of this blog post says, you must instill a belief within your employees that inventory should count for all 30 days of month, and not just the one day per month in which you do your physical counts.
The hope is that eventually you will get to a point where your employees are always aware of managing inventory levels responsibly. This includes paying increased attention to all item movement throughout your operation, but especially ensuring that all items are received into your operation in an accurate and timely manner.
I hope that after reading this post, you are convinced (if you were not already) that perpetual inventory management is useful AND RECOMMENDED for all districts, however large or small you may be. Does your district have a method to track perpetual inventory? If not, do you think your district should be using a perpetual tracker? Why or why not?