1. CONTROL & ORDER STOCK sriram.ramanathan@tafensw.edu.au

2. '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

3. . 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)..

4. 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.

5. 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

6. 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..

7. 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

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. . 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.

14. 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.

15. 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

16. 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

17. Stock Records stock requisition order - inventory control sheet stock storage record stock discard record internal transfer record stock control sheet

18. 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. 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.

19. 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? 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?

20. 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? 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?