Should I Automate Purchasing?
Vendor ordering (purchasing) is arguably the most underutilized feature in restaurant inventory control systems. There are numerous benefits to utilizing ordering, but it can require added setup and changes in processes. What are the benefits and the challenges to automating your inventory ordering?
If your process for creating an order includes looking at what inventory quantities are on hand, writing down a quantity for each item to order, and then calling in the order to your vendor or entering it into your vendor’s system, then it should be much faster to replace pen and paper with a mobile device. This is because you can record the item quantities and then automatically email or export the order to your vendor(s) and avoid calling or having to enter it into their system.
The above “simple” implementation of ordering where you change from recording orders on paper to a mobile device requires very little effort to set up and it will usually minimize any significant change to what your staff is doing now. Also, recording and either emailing or exporting orders to vendors enables you to order on your schedule rather than your vendor rep’s schedule.
Handwritten numbers can be difficult to read leading to inaccurate order quantities being provided to your vendor. If the item names and pack sizes are being recorded manually (or they have changed since the last time an ordering guide or spreadsheet was updated), items can be ordered in the wrong pack size.
COGS-Well also makes it very easy for you to order the correct item and pack size from your vendor, and for your vendor to accurately interpret and fulfill your order. This is because we use the vendor’s item description for transmitting orders and we also create a unique inventory item for each unique vendor item. Most other inventory systems have just one “generic” inventory item that is not always in sync with each vendor’s items.
Par Levels can also save time and increase accuracy. A Par Level represents a quantity of an item you desire to order to. You can set up multiple par levels. If your ordering person is doing the calculation of how much to order to in their head, then an easier approach is to record the quantity of the item that is in stock and then let COGS-Well calculate how much to order to meet the selected par level.
One challenge to using par levels is that they have to be set up in the software for each inventory item. Another challenge is there may not always be a par level type to fit every situation (the chef may know of an upcoming special or event that isn’t reflected in the par level). Finally, some people just are not comfortable with a system suggesting how much to order. If any of these challenges are of concern to you, then consider using simple ordering as described above (without par levels).
Suggested Ordering calculates and suggests the quantity to order for each item based on a theoretical inventory quantity on hand. In COGS-Well, a suggested order can optionally include a par level and/or a projected usage for each item. The theoretical on-hand calculation looks at inventory activity as well as sales and recipe item depletion for an item to determine what should be on-hand.
Theoretical on hand (and therefore suggested orders) require a POS interface and accurate recipes for the items you want to use it for. This means that it can work well for bottles of wine or already portioned steaks (because you can count on one sold being one used), but it often doesn't work well for produce items or grocery items that have variable yields and/or are used across multiple different recipe items.
Order by Item (versus by Vendor):
Many restaurant operators let their ordering process be driven by their vendors. In other words, it is Monday so I need to create an order for Sysco. Let’s say that on Mondays, we also need to create an order for Weber Meats. So two ordering events will occur, one for each vendor.
Given that your inventory item storage is typically not set up by the vendor, ordering by vendor can be inefficient. For example, if we have items from three different vendors in the same storage location, then why visit the same storage location three times? Why not instead decide what items to order from all three vendors at the same time?
In addition to providing the ability to create “orders by vendor”, COGS-Well includes an option to create “orders by item”. For example, using the above example, if you store items in your walk-in cooler from Weber Meats and Sysco, you can enter quantities to order for both vendors (and any other vendor's items stored in the walk-in) at the same time using order by item! COGS-Well will know which items to include in the purchase order email or export to each vendor. If you order the same item from more than one vendor, COGS-Well will select your preferred vendor or tell you which vendor has the best price.
Entering orders not only ensures you have a record of what you ordered, but also enables you to compare what you ordered (item, quantity, and price) to what you received on the invoice. COGS-Well provides an on order, expected delivery, and a receiving variance report (compares ordered to received) to help you manage the ordering process.
Most restaurant inventory control systems (including COGS-Well) offer a myriad of options for implementing and utilizing ordering features. Do you want to record your orders on a worksheet or do you want to record your orders on a mobile device? Do you want to use par levels? Do you want the system to suggested order quantities?
Our recommendation is to implement ordering and to start simple. You will quickly experience what works best for certain vendors and/or certain types of items (wine versus meat). Also, evaluate your ordering staff - are they accepting the process and using it well?
You can always implement added ordering features down the road and that often works better than trying to implement too much too fast.