Specialty Coffee Retailer is a publication for owners, managers and employees of retail outlets that sell specialty coffee. Its scope includes best sales practices, supplies, business trends and anything else to assist the small coffee retailer.
Issue link: https://read.dmtmag.com/i/49395
Jack'sBlend Jack Groot owns JP's Coffee in Holland, Mich. He also provides coffee business consulting and training through the Midwest Barista School (MBS). Check out Jack's new blog, "Jack Groot's blog — confessions of a coffee shop owner" at www.coffeegroot.com. Jack can be reached at jack@jpscoffee.com with "Jack's Blend" as the subject line, or at (866) 321-4MBS. W hether you created your coff ee shop from scratch, or used the help of a franchiser, you have some type of inventory system in place. It is important to have an accurate method for ordering, tracking and maintaining inventory for your store, and if you don't it will cost you money. Waste, shortages and trips to the store all cost money, and maintaining correct inventory levels will eliminate these problems. Th ere are three main ways to handle inventory: Full inventory tracking. Employee enters inventory items into computer from invoices, computer reduces inventory as menu items are sold, and the system "tells" the manager, or even the distributor, when to reorder. Some locations may do this with only a portion of the store's inventory. Pro: very accurate in tracking inventory dollars. Con: very labor-intensive. Par system. A master checklist tracks all weekly ordering. Companies with multiple items should have a separate list. An established par amount for each item is maintained in the store (par being the usual amount of an item to get me through till the next order comes in). Employee visually checks inventory and orders to par (example: milk par is 20 gallons, there are 5 leſt , order 15 to get back to par). Pro: simple and eff ective. Con: loss is less traceable and system may be less accurate. Seat of the pants. Stores that employ seat-of-the-pants inventory ordering will either change to a par system or go out of business. Th e inconsistency of product and inventory in the store will frustrate both employees and customers and lead to failure. To determine if you should use a computerized inventory tracking system, ask yourself: • Do you serve expensive food items like meat and cheese? • Are you an off -site owner/operator who relies completely on an on-site manager? • Do you trust your manager/staff with the inventory in your store? If you answered yes to these questions, having and maintaining a computerized inventory system may be worthwhile. Otherwise a computerized inventory system is overkill and takes more time and labor to oversee and maintain than it's worth. Full restaurants 8 | December 2011 • www.specialty-coffee.com with steaks and lobsters in the fridge have a strong need for such a system and gain real value in tracking the inventory. What is a correct inventory amount for each item? Stock enough of an item to get to the next shipment without a shortage, don't stock excess and waste money, take advantage of appropriate shipping discounts when prudent, and don't get sucked into volume discounts to save money. To determine the correct inventory amount for an item ask yourself questions like: • How much of this item do we use per day? • How long between orders? And how long from ordering to receiving? • How critical is the item to store operation? Is it a retail item or an ingredient? • If we run out of this, how quickly can we get more? • Are there any relevant discounts to keep in mind? Aſt er you determine an item's importance to store operation, look at how oſt en it is ordered. Your inventory decreases as you use up what you have, and you should get more in when you are almost out of the item. Doing this while your store goes through busy and slow times of the week or year can be diffi cult. Th at is why it is critical to stock heavily on ingredients that are essential to making money (espresso, cups, etc. without which you have nothing to sell, whereas if you are out of one fl avor you can still sell another one). Th e two keys to determining how much to stock are when you place an order and when you receive it. Th e inventory system at JP's has been honed over the years and is simple and eff ective. Ordering is done by management on a daily/weekly basis and is based on a par system. Th e par for each item has been established, and orders bring an item back to par. Remember, correct pars take time to determine, but once established are fairly consistent. Pars may also need to be adjusted throughout the year based on how busy the store is. To download a generic ordering list, go to MidwestBaristaSchool.com/resources and click on "helps." SCR