© 2011 John Wiley and Sons, Inc. All Rights Reserved Selection and Procurement for the Hospitality Industry Purchasing ANDREW HALE FEINSTEIN AND JOHN M. STEFANELLI E i g h t h E d i t i o n

© 2011 John Wiley and Sons, Inc. All Rights Reserved CHAPTER Typical Storage Management Procedures 15

© 2011 John Wiley and Sons, Inc. All Rights Reserved YOU SHOULD BE ABLE TO: Explain the objectives of storage. Describe the factors needed to achieve storage objectives. Illustrate the process of managing inventory and storage facilities. Generate a stock requisition and describe its use. List important storage-management practices that small hospitality operators should follow.

© 2011 John Wiley and Sons, Inc. All Rights Reserved OBJECTIVES OF STORAGE MANAGEMENT Storage management attempts to prevent loss of merchandise due to Theft Pilferage Spoilage

© 2011 John Wiley and Sons, Inc. All Rights Reserved ACHIEVING STORAGE OBJECTIVES Adequate space 5 square feet per dining seat (on average) 15 square feet per hotel room (on average) percent of the total property (on average)

© 2011 John Wiley and Sons, Inc. All Rights Reserved ACHIEVING STORAGE OBJECTIVES (CONT.) Adequate temperature and humidity Meat, poultry, fish, processed crustaceans, dairy, reduced oxygen packaged foods, some foods prepared in-house: 41ºF or lower Live shellfish, eggs: 45ºF or lower Fruits and vegetables: 41ºF to 70ºF Dry and canned food: 50ºF to 70ºF Freezer storage: 0ºF to 10ºF

© 2011 John Wiley and Sons, Inc. All Rights Reserved ACHIEVING STORAGE OBJECTIVES (CONT.) Adequate equipment Shelving/racks Trucks Covered containers Proximity Access to maintenance

© 2011 John Wiley and Sons, Inc. All Rights Reserved ACHIEVING STORAGE OBJECTIVES (CONT.) Proper security Competent personnel Sufficient time Storeroom regulations Who is allowed to enter Procedures for obtaining items

© 2011 John Wiley and Sons, Inc. All Rights Reserved MANAGING STORAGE FACILITIES Inventory classification and organization Usage rates Emergency orders Surpluses Stock disposal Stock transfers

© 2011 John Wiley and Sons, Inc. All Rights Reserved MANAGING STORAGE FACILITIES (CONT.) Perpetual inventory Physical inventory Product cost calculations Restricted access to storage facilities Stock requisitions

© 2011 John Wiley and Sons, Inc. All Rights Reserved MANAGING STORAGE FACILITIES (CONT.) Inventory Shortcuts Count everything in the warehouse, add predetermined percentage for amount in process Count only full-case equivalents Combine ordering with inventory taking Use a tape recorder to recite counts; transcribe the information Use a handheld computer device to encode inventories

© 2011 John Wiley and Sons, Inc. All Rights Reserved MANAGING STORAGE FACILITIES (CONT.) Exercising control over the stock Allow only a few persons to withdraw items Maintain small stock so pilferage is more noticeable Use small working storerooms and keep large storerooms locked Use stock requisition system Issue stock only at certain times during the day Issue exact amounts of ingredients for one day or one shift

© 2011 John Wiley and Sons, Inc. All Rights Reserved VALUE ANALYSIS: STORAGE- MANAGEMENT Theoretically can capture 2% savings Small operations have options Use one-stop shopping Owner-manager or assistant receives and inspects all incoming merchandise Send expensive items to the main storage area and less expensive items to production Owner-manager issues par stocks of expensive items at shift beginnings Lock main storage facilities

© 2011 John Wiley and Sons, Inc. All Rights Reserved VALUE ANALYSIS: STORAGE- MANAGEMENT (CONT.) Small operations have options (cont.) Lock main storage facilities Owner-manager retrieves expensive items as needed Owner-manager restocks unused expensive items Conduct critical-item inventory