July 24th, 2014 | Simcha Weinstein | Comments Off on The Art and Science of Ordering Food
It all begins with ordering. That’s always the first order of business – making sure you have the product to sell. Ordering actually begins by initially deciding what your product mix is going to be. If your store is in NYC, you may have a different product mix than if your store is located in the mountains of Montana. Understanding your demographics and having an appropriate product mix to satisfy your customer base is actually the first step in the ordering process.
Once you have your product mix, then what’s needed is a system of ordering that tells you the three critical components that are necessary for any successful ordering and re-ordering process: 1) How much of an item do you have on hand? 2) How much of the item do you typically sell? and 3) How much of the item do you need to order? So let’s take a closer look at these components:
1) How much of an item do you have on hand? – This is an easy one. It simply involves counting – doing an accurate inventory. Ordering food also means inventorying your product. This shouldn’t be a guess or an estimate. If you want your order to be accurate – do the basic work of counting. For the purposes of ordering it’s best to just count your product that is not on display. Count what you have in back-stock. You want to be mindful of what you have on display and how much of it you have, but you must have at least a display’s worth of product on hand at any time to properly service your customers with product. Keep in mind that if you order too closely, then you may run out of certain items and then you’ll be dealing with the issue of out-of-stocks. Out-of-stocks are lost sales and become a customer service issue. After all, the shopper came to your store for something that you should have had in stock and you didn’t. They left disappointed, and that’s not what any of us strive for with our approach to customer service. Keep those out-of-stocks to a minimum!
2) How much of an item do you typically sell? – This is the key statistic that makes an ordering system work! If you keep up with movement reports and use them regularly, you should have a pretty accurate idea of how much of each item you sell. You can even break it down so you know how many bananas (or any item for that matter) you sell at the beginning of the week vs. the end of the week. Using your reports and analysis is the key to having accurate baseline numbers for how much product to order.
3) How much of an item do you need to order? – Once you have the data from the first two – understanding your inventory on hand and how much you typically sell, ordering becomes the easiest part of the process. It’s just basic math. If you sell 12 cases of peanut butter each week, and you have 3 on hand, then you’ll need 9 cases for the week.
One final thought about ordering – don’t wait until you’re trying to dash out the door to get your order done. If you do, mistakes will typically be made. Take your time; take it seriously, and order the best product.