CONTROL & ORDER STOCK
sriram.ramanathan@tafensw.edu.au
'Stock' and 'inventory' are the terms used to refer to
the store of goods held ready for use. In a hotel like
the, stock can refer to everything from smoked
salmon in the coldroom, to glasses in the bar and
sheets in the bedrooms.
A large amount of money is tied up in the stock we
carry - we have to balance the need for a cash flow
against the amount of stock required to allow the
hotel to function effectively.
CONTROL & ORDER STOCK
How stock is ordered and controlled
The storeroom and the purchasing officer are the centre of the
stock control and order operation. When an authorised requisition
is received from a department in the hotel, the hotel has a set
procedure to follow when purchasing and receiving the stock item.
The storeroom then makes an issue of the stock to the department
that has requisitioned it.
The bar, kitchen, restaurant and housekeeping requisition and
receive stock from the storeroom. Stock can also be transferred
between departments (a transfer record must be completed to
keep track of stock movements within the hotel).
.
SUPPLY CHAIN:
The supplier receives a purchase order from the purchasing
officer in the storeroom. The supplier relies on the correct
information being filled out on the purchase order to enable
them to provide the correct stock items. Any difficulties
would be referred back to the purchasing officer.
DELIVERY:
A stock delivery invoice will accompany the delivery.
The accounts department gets a copy of the purchase order
and the receipted invoice from the purchasing officer. The
accounts department will not make any payment to the
supplier unless these documents have been received.
It's essential that everyone involved in controlling and
ordering stock for the hotel follows the correct procedures
at all times
Stock systems
Manual systems
Manual systems are inexpensive to set up and the records are easy
to access, making them especially suitable for smaller operations.
1.They are labour intensive
2. Records must be maintained regularly.
Manual systems can deal with all aspects of stock control from
pouring nips with a measure, to keeping track of food transferred
to kitchens for production, etc.
You should make sure that manual systems are clearly defined and
diligently monitored. If you don't keep a close eye on the operation
of manual systems, there is a risk of inaccurate, inconsistent or
fraudulent reporting.
.
The procedure for using a manual system involves:
1.conducting a stocktake
2.using a stocktake form
3. retrieving the stocktake form
4. checking and updating information (such as brand name, price,
etc)
5. stopping purchases, issues and transfers so that there is no
movement of stock
comparing the actual stock counted during a stocktake
6. reporting any variations in writing to the manager for further
investigation
•Centralised purchasing
Centralised purchasing systems are widely used by chain
operations, and by small groups of independent operators with
similar needs.
Under a centralised purchasing system, the requirements of
individual units are relayed to a central office. The central office
then works out the total requirements for individual goods to be
purchased across all the units, and purchases the total.
The goods can be delivered either directly to the individual unit or
to a central location. Delivery to a central location requires the
organisation doing the centralised purchasing to operate its own
distribution system.
•Centralised purchasing
Advantages of a centralised purchasing system
1. Goods are purchased at a lower price because of the large
volumes involved.
2. The purchaser has a greater choice of markets so they are more
likely to obtain the desired quality of goods.
3. Goods can be purchased to the purchaser's exact specifications.
4. Larger inventories can be maintained, ensuring a constant supply
to individual units.
5. There are fewer opportunities for food purchasers to be
dishonest.
•Centralised purchasing
Disadvantages of a centralised purchasing system
1. Individual units have to accept the standard items in stock and
have little freedom to purchase goods to meet their particular
needs.
2. Individual units cannot take advantage of local 'specials' at
reduced prices.
3. Menus tend to be more standardised, limiting an individual
manager's freedom to change a menu.
4. Decisions about whether or not to become involved in a
centralised purchasing system are normally made by senior
managers rather than food controllers.
Inventory (stock) control
Inventory is an expensive asset which you can control with accurate
reporting.
When the information generated is timely, accurate, reliable and
consistent, you can:
1. work out how much your stock is worth for accounting purposes
2. carry less inventory and reduce your costs
3. show food and beverage usage
4. track slow-moving items
5. know how much stock is on hand at any time so that
6. you can maintain the correct par levels
7. decide when to order stock and how much to order
8. exercise greater control over theft and other undesirable fluctuations
in stock
9. establish an efficient stock control system.
Inventory (stock) control
There are two basic inventory record keeping systems - physical and
perpetual.
Physical inventory
A physical inventory system periodically assesses the value of the stock
in hand. This is usually done on a monthly basis as part of developing the
business accounts. It can be done more regularly if any problems are
identified.
Perpetual inventory
A perpetual inventory system keeps a running balance of the quantities
of each individual item in stock. It operates like a bank account - when
more items are received in stores the balance is increased, when items
are removed the balance is decreased. This means that, at any time, the
amount of individual items in stock is known.
Inventory (stock) control
As a general rule, most establishments use a combination of both
physical and perpetual inventory. When the physical count of any
product is different from the perpetual record (book balance), the
variations can be investigated and controlled.
Par stock
Par stock is the minimum stock level you require to operate your
business at its maximum capacity. Stock must be maintained at this level
at all times. To do this, you must know the par stock level required by
each department.
Imprest stock
An imprest stock system means that used items are replaced with
exactly the same amount of new ones. For example, if you use a carton
of beer you would replace it with another one.
But things are not always so simple!
Sometimes you may have only a small amount of a bottle of spirit left
and you can only replace it with a full bottle - what should you do?
Should you replace it with a new one? In this case you would make your
decision based on how well the item sells.
Questions.
If you swap empty bottles for full ones, what system would this be - par
or imprest?
Do you consider the par or the imprest system to be the better? Why?
Can you think of where the other system would be preferable
Stock Records
Stock records are used to document details of receipts, issues, and
balances remaining in stock for every item held in each department in
the hotel
Stock records show you:
the stock in hand you have without physically counting it
It is the link between physical stock and stock control accounts
Information such as how much stock you should order
when you do a stocktake, what losses have occurred
the current cost price of stock items etc.
Internal stock records can include stock requisition orders, inventory
sheets, storage records, discard records, internal transfer records and
control sheets
Stock Records
stock requisition order inventory control sheet
stock storage record
stock discard record
internal transfer record
stock control sheet
When the purchasing officer receives the requisition forms from each
department, they know what needs to be ordered to ensure there is
enough stock for the hotel to operate efficiently.
Sometimes problems do occur and these must be followed up to see
whether the stock re-order cycle needs to be adjusted. Regular
communication between the purchasing officer, colleagues within the
hotel and suppliers is essential to ensure the continuity of supplies.
Read the telephone conversation below and then answer the questions.
Chef: Hi, I need a bottle of Orange Liqueur immediately.
Purchasing officer: OK, but you haven't sent me any paperwork.
What's happening?
Chef: I don't have time for the paperwork, I've got a special on Crepe
Suzettes this week and I've got a rush on.
Purchasing officer: I need to know why you didn't order it with the
stock yesterday.
Chef: I didn't know I'd need it then. But last night the crepes were very
popular and I used all my stock. I need another bottle now before these
customers start going elsewhere.
Purchasing officer: Is this special going to be a regular item on the
menu? Do we need to adjust the stock order in future to take account
of it?
Chef: Yes, it's been so popular, I'll probably run it on the menu regularly.
Can we meet and discuss this later?
1. What method of stock control is used - physical or perpetual?
2. Why is this method of stock control used?
3. What are the advantages and disadvantages of this method of stock
control?
4. What stock system is used - par or imprest? Why?
5. How often are orders placed with suppliers?
6. Is there any difference in the frequency of orders being placed? Why?
7. Is there a procedure for staff to follow if they notice stock is running
low?
8. What are the responsibilities of staff with regard to the re-ordering of
stock?
9. What stock records are maintained?