Cost Controls When Chefs Are Buying

[CFO999]

Are food costs naturally higher if the chefs do the buying?

[Juanito]

No, in my experience, if the chef cares about the operation, they will be lower, not higher.

Someone who doesn't work with the food might be ignorant of things such as yields, and alternative uses. They buy things based solely on price, without considering that sometimes paying more can earn you more.

Chefs know how to utilize items to generate maximum revenue. Revenue is the most important part of the food cost equation. Once people figure that out, they kiss their food cost problems goodbye.

[CFO999]

I have seen kitchen staff get on the phone and never ask the price on a single item

Just send me 2,4,6,8,10

BOH controls would include much more than need and coverage

Market price changes on items seem to be ignored

You pay one price on Monday and a Different one on Thursday.

DO you use purchase orders

Documented receiving procedures

Negotiated pricing to be held weekly

Bids on items (vendor comparisons)

Menu costing...checked weekly

Portion adjustments for volitile items

and this is just some of the front end controls

[CFO999]

Revenue is not the main issue in food cost

Menu costing is

If the elements in your receipe are constantly rising and your menu item pricing stays constant .......your food cost will go up

This is not a quality issue.......this is financial

If you are not looking.....you are dead

[CFO999]

Yeild, portion control,and inventory par levels can only be adjusted if your looking at both menu item sales and item costs.

No one is suggesting the chef change his specifications on item quality

That could affect consistancy and menu item sales negativley.

Do you examine menu item sales daily?

[Carrot Top]

Isn't it the best answer for this task, which is not one-dimensional by any means, to have both the knowledge and controls of the FOH manager in charge of this AND the knowledge and craft of the BOH chef involved in the determinations and phone-call makings (which are endless and always will be...) ALSO supported by information learned from whoever is actually totalling and paying the bills on an ongoing basis AND whoever is checking the orders in (for freshness, weight, conforming to standard and punctuality of deliveries...)

In terms of who actually makes the phone calls to place the order, that could be anyone that had the time and ability to do it.

But it is the teamwork and communication that leads up to what happens on those phone calls that is imperative. And it's gotta happen as often as each and every day.

FOH/BOH conflicts. You don't gotta like each other but you DO gotta respect each other to prosper and accomplish the job.

[CFO999]

Thank you Carrot Top

Food cost unfortunately is a BOH responsabilty

The chef should have the knowledge to go to the POS and run all the menu sales detail needed daily and know what his daily food purchasing limits are daily

If he knows his target food cost percentages and his purchase limits he will not be dependant on the bookkeeper or the FOH managers

Without going into the drama of FOH vs BOH

There is no escaping keeping an eye on item costs

Utilizing purchase orders will mandate knowing item costs and your purchasing limits, portion controls, and par levels

[CFO999]

The fact that the person who makes the call is not the same as the person who receives the goods is a control issue

What document is he/she receiving against

Did we order this

Is it a substitute item

Is the cost been agreed to in advance

Are the quanities correct

FOH has nothing to do with any of these issues

[Carrot Top]

It sounds as if you are very angry about something in particular, in your postings.

No, not to 'go into the drama of 'FOH vs. BOH', for it should not be a drama in eveyday working life, should it...

Each foodservice facility has its own way of handling these responsiblities, and the determination of 'who does what' or 'who is responsible for what' should be clearly stated both in the organization's Policy and Procedures manual and then again documented clearly in Job Descriptions.

This is the basis for clarity of responsiblities in the workplace.

If, in your specific operation, you want the Chef to have the capability and daily responsibility for these tasks, then hire for that purpose.

No, not all culinary schools train their graduates in complete cost controls. Some do, some don't. Particularly if the career path is aimed at being a Chef, a creative person that handles food not money....the two skills are not always found in the same person, but when they are, the compensation for such a person (if they are highly skilled in creativity, and hired for that skill and not just in following standardized recipes) is generally higher.

Restaurant Management or Hotel/Restaurant school graduates usually are more 'schooled' in these things, though certainly given an interest in the subject and a willing mentor, a chef previously not exposed to these things can learn them on the job.

[CFO999]

If, in your specific operation, you want the Chef to have the capability and daily responsibility for these tasks, then hire for that purpose.

No, not all culinary schools train their graduates in complete cost controls. Some do, some don't. Particularly if the career path is aimed at being a Chef, a creative person that handles food not money....the two skills are not always found in the same person, but when they are, the compensation for such a person (if they are highly skilled in creativity, and hired for that skill and not just in following standardized recipes) is generally higher.

Restaurant Management or Hotel/Restaurant school graduates usually are more 'schooled' in these things, though certainly given an interest in the subject and a willing mentor, a chef previously not exposed to these things can learn them on the job.

No not angry......just surprised

BOH is the creator and manufactuer of the product

Should it not be there responsability to know their food cost without dependance on a second party....without delays

The chef would become a better chef with this ability

We are talking about personal growth here

Does a chef just create and then its someone else's problem.

I thought this was a team thing.

All chefs are not finance majors, but in stand alone restaurants(majority) they are usually management

[Carrot Top]

Oh yeah...I can understand your disappointment but unfortunately 'personal growth' is not always the same thing to the onlooker who desires it and to the one who seemingly in the situation needs a certain variety of it!

Or to put it in old fashioned terms, 'You can lead a horse to water but you can not make them drink'.

But, based upon whatever criteria has (hopefully) been set up and clearly communicated, through good human resource policies that are in place on an ongoing basis, you could always go get another horse.

To make another sort of stupid paraphrase "If the shoe doesn't fit, don't wear it."

I'll stop now before this nonsensical quoting gets out of hand...

[KatieLoeb]

Are food costs naturally higher if the chefs do the buying?

As opposed to whom? The dishwashers???

It seems self evident that this is part of the chef's job, does it not?

"You can lead a whore to culture, but you can't make her think.."

[beans]

All chefs are not finance majors, but in stand alone restaurants(majority) they are usually management

But to have earned "chef" to run a kitchen one generally alread has managed many BOH staff, FOH staff and understand how to calculate food cost.

Then comes the owner. Sometimes the owner is the money cruncher but most often the chef works closely with the on staff bookkeeper or accountant with keeping food cost a bit closer in line to keep from sinking.

Edited August 5, 2004 by beans (log)

[CFO999]

Wow, who''s angry now!

I see we can get pretty miffed

If you don't use any of the front end controls or they are not being done for you

Or you do not know how to check them yourself for accuracy

Chances are your food costs are higher than they should be

Standards for these responsabilities vary from place to place, but last time I looked this was still a business.

Food costs are controlled by people not policies

I would have thought the chef would not redirect this responsability

And if the chef was hired for only his/her creativity....the owner may want reconsider his labor costs.

Edited August 5, 2004 by CFO999 (log)

[beans]

Wow, who''s angry now!

I see we can get pretty miffed

If you don't use any of the front end controls or they are not being done for you

Or you do not know how to check them yourself for accuracy

Huh? Who are you talking to CFO? I don't see anyone becoming miffed in the least.

Chances are your food costs are higher than they should be

Again are you referring to me? This rouses my curiosity as to how would you be able to base such an observation, a wholly incorrect one at that?

Standards for these responsabilities vary from place to place, but last time I looked this was still a business.

I don't know where you are going with this as nothing has been suggested thus far to be reflective of anything different.

Food costs are controlled by people not policies

They are policies that institute the whole team of employees, starting with one that focuses upon the bottom line dollar -- our lovely bookkeeper, hand in hand with our owner, general manager, executive and sous.

No offense, but I'm completely at a loss at what you are getting at with your thread. Were you seeking out information and/or discussion?

Edited August 6, 2004 by beans (log)

[KatieLoeb]

And if the chef was hired for only his/her creativity....the owner may want reconsider his labor costs.

If the chef was hired solely for their creative abilities and no thought or weight whatsoever was given to their abilities in the area of cost control of both labor and product in the BOH then that owner deserves to fail. And they will.

Not to beat the same drum, but this is clearly WHY the failure rate in the restaurant industry is so high.

[CFO999]

Thank You Katie

Exactly my point

I believe that our present day culinary educators inject these important steps in thier cultivation of our future chefs.

Survival in such a large market sector is the name of the game.

The high failure rate in our industry should not be ignored or redirected.

If you don't use any of these front end controls to prevent your costs from getting away from you, then you must ask yourself.. WHY?

I don't have the time or its not my job is a sure sign of impending failure.

Raising menu prices will decrease your volume and preceived value

Customers at all levels are price sensitive...don't think they are not.

[CFO999]

Not one person has said yes to using any of the front end controls mentioned earlier in this thread

Interesting

[clifford]

With static menu pricing, the COGS will fluctuate throughout the year, based upon the seasonal availabilities of most items ordered. There will be months where your food cost runs higher than normal. There will be months that your food costs run lower than normal.

You certainly could react to market fluctuation and change your menu pricing daily, but try to explain that to a guest when he wonders why his gazpacho was $7 on Monday and $7.50 on Wednesday.

Your chef should be intimately aware of these seasonal price fluctuations, as well as periods in which prices may spike out of the range in which you/he/she are uncomfortable with.

Regarding food costs in particular, keep an eye on the big picture, and don't get too bogged down in minutuae.

Now, if you want to be insane about these type of things, a guy I used to work for (the owner) had "par levels" on every item we received in the restaurant. Say we received a flat of blueberries. He would randomly select one pint, and COUNT the amount of blueberries it contained. If the count (or weight) was outside of his acceptable range, he was on the phone with the purveyor demanding, I shit you not, FIVE extra blueberries. The delivery drivers hated him!

He was miserable. His hair was falling out in clumps. But his restaurant was successful.

[KatieLoeb]

Not one person has said yes to using any of the front end controls mentioned earlier in this thread

Interesting

CFO:

I look at that stuff every single day, and it's included in my packet of nightly reports that are run off of the POS. But the bottom line is that the cost of goods percentage is still the same equation regardless of whether or not anyone is looking at those reports beside myself. Yeah it's a great tool, but only to fine tune things. If the chef doesn't have a basic grasp of what he/she is doing in terms of menu pricing (including those items that are the "loss leaders" on the menu), labor cost control, portion control or whatever, then no amount of throwing paper at them is going to help. Might as well use the pile of paper as an ottoman or to fuel the oven.

[CFO999]

Thank you Cliff

Good point

Hopefully your menu will change seasonally as well to match those flux market changes in your product cost

Presenting in season fresh product is very important

Menu planning for those changes are done by the chef and if he/she is on their game the menu pricing will remain static without large variations in cost.

Weighing product at time of receiving is a valuable front end control

Vendors will play games

As far as shorting 5 blueberries...make it up in portioning

But the fact that you know you are short is important and should be calculated in your yield to allow for the cost.

[CFO999]

Hey Katie

The game is to see how low you can go without risking the quality of the dish or the spec of the ingredents

Demand no market changes from your vendor on a weekly basis

Use the bid process to keep the vendor aware you are looking at your product cost

Get market reporting from the DOA

Do not allow vendors to do your inventory

Just ask the price of these items when you order them...track product costs

you will be surprised at what you will find

[KatieLoeb]

You certainly could react to market fluctuation and change your menu pricing daily, but try to explain that to a guest when he wonders why his gazpacho was $7 on Monday and $7.50 on Wednesday.

Clifford:

You could try to do that, but it sounds like a losing argument every time, doesn't it? The truly talented (and I mean in all areas, not just creativity) chefs that I've had the pleasure of working with are buying what's seasonal both because it's the freshest and the best the local producers have to offer, AND because it's a better overall choice for the menu in terms of cost. That's what separates the Executive Chefs from the overblown Line Cooks. The word "Executive" has certain implications that are central to this interpretation.

[KatieLoeb]

Use the bid process to keep the vendor aware you are looking at your product cost

I appreciate what your driving at here, but the bid process only works if you're a large enough operation to avail yourself of it. And at that point it's Sysco vs. whomever the more regional competior is. The small to medium sized bistro/brasserie/corner tavern doesn't have the wherewithall to compete in that league. I live and work in Philadelphia, which is a fairly large urban center with a dynamic restaurant culture and nearby agricultural areas and purveyors. But there's still a short list of quality vendors to deal with. The luxury of having vendors "bid" for our business is not something that the chef or even I (as Beverage Director, I am forced to deal with the PLCB) can avail ourselves of. It all sounds good in a theoretical argument, but has little place in practice.

[CFO999]

Thanks Katie

Even if you are not a multi-unit MCO the tracking of product costs still apply

Vendors spend more time analyizing your useage than anything else

And when they need to increase margins they will.

One of my chefs tracked his cost on eggs for two weeks and found the vendor charging one price on Monday...higher price on Weds.....and even higher price on Friday.

And Fridays order had the highest volume...go figure

If the vendor knows your not looking he will take the opportunity to increase his margins.