Better Hotel Purchasing and Receiving Strategies
Improve your storage smarts for better bottom lines.
If the kitchen of a hotel is the “heart of the house,” then the F&B storeroom provides the flow of supplies to keep that heart beating. The storeroom is often viewed as just a place where ingredients and goods are held, but some purchasing pros say an organized storeroom with effective standard operating procedures can lower food cost a half point or more.
“Our F&B purchases are like putting money on the shelf, and it’s up to us to maximize the use of that money,” says Geoffrey Sagrans, assistant director of materials management at The Breakers in Palm Beach, Florida. “For every dollar in cost, you need about four dollars in sales to offset an average food cost. So you can save your hotel several thousand dollars a year by being diligent and efficient in your receiving and storage practices, and that’s money your hotel doesn’t have to make up for in sales later.”
Here, Sagrans, along with Jim Milkovich, corporate director of purchasing for Hyatt, and Mark Brooks, purchasing manager at the Bavarian Inn Lodge in Frankenmuth, Michigan—a combined 50 years of experience—offer their advice for tightening transactions and straightening up the storeroom to bolster the bottom line.
The first way to increase efficiency in a storeroom is to organize inventory according to usage. “About 80% of our dollars go toward 20% of our purchases, so those high-volume items are located near the entrance, and low-volume items go to the back. If you’re filling requisitions, additional steps mean additional time, which equates to additional labor costs,” Sagrans says.
Labor efficiency also can be maximized when doing monthly inventory. Regardless of whether you track electronically or with paper and pen, the storeroom should be laid out to mirror your inventory sheets.
“We can do our F&B inventory in about two hours with everything in sequential order,” notes Brooks. “It used to take us four or five hours because everybody had to flip through pages to find items, so we got our storage area organized to match the sequence of our inventory sheets and our order guide.”
First-in-first-out (FIFO) is the golden rule for perishable supplies, and one way to ensure FIFO happens is to have the appropriate shelf width, depth, and spacing for ease of removal, rather than cramming as much as possible on existing shelves.
“A good example is 50-pound bags of flour. When you’re stocking those items, it might be convenient to stack them 20 bags high, but then it’s a problem to replenish those; if you have too much in one area the items never really get rotated,” says Sagrans.
Versatile dunnage racks (flat-top pedestals about a foot high) help maximize finite storeroom real estate because they can be placed anywhere. Another option is rolling shelving units on rails “that don’t require aisles in between—you just slide the shelf over, walk to what you need, then slide it back. Rolling shelves and dunnage racks are probably the two items that save the most space in the storeroom, and they’ve helped us when we’ve had challenges with square footage,” says Milkovich.
Brooks adds that while you don’t want to break your budget on racks and shelving, you can’t ignore those items either just to save a few dollars. “Many years ago, I took a purchasing job at a brand-new retirement home, and all the shelving in the storeroom was plastic milk crates wired together,” Milkovich says. “I couldn’t get the owner to buy proper shelving until the health department came and wrote us up for the milk crates. It’s a good lesson that you will pay in the future for neglecting to buy the basics.”
Storeroom theft is an everyday reality at many hotels. Among the ways to combat it are keeping easy-to-reach items such as candy and snacks locked away from high-traffic areas, only allowing a manager on duty to open the storeroom for after-hours requisitions, and mounting cameras on the loading dock and at the storeroom entrance.
“We lock everything up, and we even have a camera by the dumpster outside, because sometimes items go into the dumpster, then are pulled out later when somebody leaves for the night,” Brooks says.
In an ideal storeroom scenario, vendor bids are sent out, and those that meet a hotel’s target pricing win the business and provide consistent value over time. In reality, some vendors will test an operator once the honeymoon period is over by quietly raising prices, and shipping sub-standard products.
All three of our purchasing pros emphasize that every delivery needs to be inspected for quality and quantity regardless of whether the driver is in a hurry or if there’s a backup of trucks on the loading dock. Not checking shipments sends a message to vendors that they can unload poor quality items or even empty, repacked cases through your doors.
“Drivers know when nobody’s paying attention, so it’s very important to show them you’re scrutinizing the orders coming in,” Sagrans says. “The drivers report back to their companies about who is inspecting deliveries. A good example is when I first started at The Breakers, we had a vendor that put weights inside of trout, so we would pay for 18 pounds of trout, but they were only delivering about 15 pounds. They did that for years before I arrived.”
Being able to recognize quality produce, proteins, and more before they’re officially in your hotel takes a trained eye to spot discrepancies. Milkovich says this is arguably the most important aspect of a successful storeroom, so chefs should take time to educate receiving staff.
“You can’t just hire somebody that can lift a box. You have to train them to recognize the quality and quantity you expect from your vendors, like what a green-tip banana looks like, how to ensure seafood is fresh, why we don’t accept dented #10 cans, and more,” he says. “That’s an area that isn’t given enough attention, but it can have a ripple effect on your whole operation—because if you don’t know what you’re receiving, and you’re sending junk to the kitchen, it ends up costing you time and money to correct that situation.”