Some days, do you feel like your nutrition program is hemorrhaging money? All that food waste and lack of efficiencies is enough to drive a School Nutrition Director mad!
Fortunately, there are a few things that you can employ to help you cut costs in your school foodservice operation. The more money you can save, the more funds you have to put back into growing your program and increasing participation!
Not too long ago, I wrote about the problem that rising food costs can present to your nutrition program (something that I’m sure you’re unfortunately very familiar with). In an effort to combat these price increases, I presented seven tips to get your program started on the path to money-saving success!
This week, we’re going to kick off this cost-cutting series with a topic that’s very near and dear to me – INVENTORY MANAGEMENT!
Cutting your nutrition program costs through proper inventory management practices is one of the most important avenues on which your program can find money that would otherwise have needlessly disappeared. Here are a few of the tips that I highly recommend your school nutrition operation use to cut costs through its inventory management procedures.
FIFO (otherwise known as First-In, First-Out) is a type of inventory valuation method that is commonly used across many school nutrition programs. This ensures that items which entered your storeroom leave in the order in which they were received. It keeps the oldest items constantly rotating out of your remaining inventory supply, while newer ones take their place on the shelf.
By practicing FIFO, your nutrition operation decreases the amount of money that is wasted due to product spoilage.
Just-in-time ordering is exactly what it sounds like – the orders that you place arrive just in time for production. As someone who always over packs for vacations and is always hyper-prepared, this idea seems a little stressful to me personally. I’m always worried about not having something I may need! With just-in-time ordering, it’s a part of the game.
Just-in-time ordering ensures that you are keeping the lowest possible inventory (aka. Money) sitting on your shelves.
How closely do you check every single line item when a delivery is received? Are you comparing the price points of items upon delivery to the price previously negotiated during bidding? If you’re not, you should be! I have heard stories revolving around this topic that would blow your mind!
One district told me of a time in which they discovered a one cent differential on an item that they frequently order. As they went back and checked more previous receive receipts, they found the problem had been occurring for several months. They lost nearly $20,000 in the course of this time, all because of a one cent differential between the contracted price and the delivered price! After hearing of their unfortunate circumstance, I immediately understood just how important attention to detail can be when trying to save money.
Physical inventories have been a staple of the school foodservice industry for decades. They are a pain to conduct, especially if you have a large operation or a central warehouse for your district. Sometimes it may even be necessary to bring your entire operation to a standstill until you’ve completed your physical counts. But – Isn’t technology such a wonderful thing?!
With technology, you can now manage your nutrition program’s inventory levels in real time! As soon as an order is received it gets input into the computer system and noted for all future production plans. If you happen to have software that syncs up your inventory to your production, then as soon as an item is used for production, it is simultaneously withdrawn from your inventory.
Perpetually managing your inventory allows you to see just how much money you have tied up in inventory at any given moment, without the time or hassle needed to conduct a physical count.