utilizing kpis for inventory management - school nutrition · be able to utilize the kpi resource...
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© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Utilizing KPIs for
Inventory Management
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Presenters:
Sandy Curwood, PhD, RD
Director, Office of SNP
Virginia Dept. of Education
Keith Rushing, PhD, RD
Research Scientist
ICN, ARD
Hattiesburg, MS
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Learning Objectives:
Participants will:
▪Be able to apply KPIs for inventory management decision making
▪Be able to utilize the KPI resource “Essential KPIs” for SN program evaluation
▪Be able to utilize the KPI resource “Essential KPIs” for SN program decision making
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
THE PURPOSE OF THIS RESOURCE
•Straight-forward
•Easy-to-use reference
•Applying Key Performance Indicators (KPIs)
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
WHAT ARE KEY PERFORMANCE INDICATORS (KPIs)?
• Measures of performance
• Rigorous / Numbers-oriented / Objective
• Provide standards
• Identify where to invest resources
• Track major initiatives
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
HOW THIS RESOURCE WAS DEVELOPED
• Assistance of many 25 SN professional
• 2-years
• National Survey -usage & perceptions of KPIs
• Think Tank– general topic areas
• SN MGT/FSM Textbooks – draft content
• Electronic/face-to-face work group - shaped content
• Electronic review panel – content and face validity
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
CHAPTER 1: General Areas
•Meal Counts & Participation
•Financial & Inventory Management
•Productivity & Labor
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
CHAPTER 1: Subsections for each KPI
▪ Description
▪ Why Calculate
▪ How Often to Calculate
▪ How to Calculate
▪ Sample Calculations
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
CHAPTER 1: Subsections for each KPI continued
• Where to Capture Data
• How to Use
• Industry Standards
• Factors that Influence
• References
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
CHAPTER 2: The Case Study
• Background Data
• Meal Counts and Participation
• Financial and Inventory Management
• Productivity and Labor
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
CHAPTER 3: Utilizing KPIs
• Benchmarking
• Trend Analysis
• Developing Action Plans
• Communicating with Key Stakeholders
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Appendices
• SMART Goals Action Planning Template
• Statement of Activities Report
• Step-by Step Calculations for Meal Equivalents
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management: Case Study
Sandy Curwood, PhD, RD, SNS
Director, Office of SNP
Virginia Dept. of Education
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management: Case Study
Inventory Management
• How to calculate inventory rate
• How to apply inventory turnover rate
for decision making
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
INVENTORY TURNOVER RATE
Description: Inventory turnover is a measure of inventory
efficiency. Specifically, it is the number of times inventory is utilized
in a period. It can be used to determine if an operation is holding
too much inventory.
• Why Calculate: The financial goal of inventory management is
to control food and supply investments. Inventory turnover rate
provides an indication of an SN program’s ability to control
inventory levels.
• How Often to Calculate: Monthly and annually.
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
Where to gather data:
• Actual inventory – record monthly
– Set up storeroom according to inventory form (or vice
versa)
– Use vendor order for to take inventory
– Enter quantities and use spreadsheet to calculate totals
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
Compare previous month dollar amount to current month.
• Cost of items purchased = Beginning Inventory
• Conduct end of month inventory and cost valuation
• Average Inventory Value = (Beginning Inventory
+ Ending Inventory) ÷ 2
Calculation(s) for a month per school:
• Beginning Inventory = $ 6,600
• Purchases During the Month = $11,400
• Ending Inventory = $ 5,400
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
• Monthly purchases minus remaining inventory divided by average
inventory value
($6,600 + $11,400) – $5,400 = $12,600 / $6000
= 2.1
• Average Inventory Value ($6,600 + $5,400) ÷ 2
$6,000
• 2.1 = The number of times inventory turned over or was used up
and replenished in a period.
• Industry Standards: 2-3 times a month (National Food Service
Management Institute, 2012)
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
• How do you interpret the information?
• Based on the 2.1, is this a reasonable turnover level?
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
• Yes!
• Industry Standards: A school that receives a weekly delivery for
most products should have a turnover rate of once every 7-10
days or 2-3 times a month (National Food Service Management
Institute, 2012)
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
• How to use the information?
• This school is adequately managing inventory.
• If not, what other evaluations could be use?
– Items left on shelf, not on menu
– Expired items
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
• Factors that Influence:
• Forecasting
• Inventory loss due to waste, theft, spoilage, and other product loss
• Secure and safe storage practices reduce inventory loss and ensure shelf life is maximized
• Frequency of deliveries
• Storage space
• Use and number of weeks of cycle menus
• Minimizing menu substitutions
• A large bid
• Order procedures (centrally placed orders allow for review and revision)
• Meals and meal counts
• Meal service interruptions where there is a loss of food service opportunity (i.e. snow days)
• Non-compliance with regulations
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Example
School Division Inventory Management by
School Site:
• Tracking spreadsheet
• Completed Document
• Required report from cafeteria manager to
field supervisor
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:The Case StudyFairfax County Public Schools
Supervisor: Rahul Nooniwal
Inventory Worksheet
School BF
Count
Lunch
Count
Total
Equivalencies
ADP
Monthly
Target October November December
Current
Status
June 2017
Target
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:The Case Study
Fairfax County Public Schools Supervisor: Rahul Nooniwal
Inventory Worksheet
School BF
Count
Lunch
Count
Total
Equivalencies
ADP
Monthly
Target October November December
Current
Status
June 2017
Target
Brookfield ES 175-200 550-575 613 $5500 $4324 $3914 $4354 Good $900 or less
Bull Run ES 125 425-450 522 $4500 $4169 $3167 $3310 Good $700 or less
Centre Ridge
ES 200-225 500-525 577 $5000 $5630 $4931 $3902 Good $700 or less
Centreville ES 100 425-450 527 $4500 $3625 $3833 $2678 Good $700 or less
Centreville HS 200 950-1000 1307 $10000 $10651 $13614 $7568 Good $1500 or less
Colin Powell
ES 40-50 475-500 552 $5000 $4938 $4000 $3315 Good $600 or less
Cub Run ES 25-30 275-300 318 $3000 $3884 $3478 $3351 High $600 or less
Deer Park ES 75 300-325 354 $3000 $2977 $4000 $2666 Good $500 or less
Eagle View ES 55-60 325-350 405 $3500 $3985 $4100 $2559 Good $500 or less
Green briar
East ES 110-120 475-500 563 $4500 $4059 $4746 $2930 Good $650 or less
Green briar
West ES 50-60 350-375 458 $3500 $3864 $5210 $3487 Good $600 or less
Lees Corner ES 25-30 300-325 371 $3000 $3068 $5383 $4011 High $500 or less
Liberty MS 55-60 450-475 576 $5000 $8753 $7066 $5507 High $700 or less
London Towne
ES 125-150 500-525 587 $5000 $6522 $7770 $7786 High $800 or less
Poplar Tree ES 5-10 200-225 301 $2500 $3855 $3516 $3003 High $500 or less
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:The Case Study
Chantilly Pyramid - January 2017
Managers’ explanations for not meeting monthly inventory targets
Canterbury Woods
I have high supplies inventories that carry over from September such as $292 for all sandwich and hot
dog bags and $287 for pink towel and soap pad. I use sandwich bag for PB&J and cookie to reduce the
inventory level. In January, the level went down to $216 for bags and $209 for towel and soap pad (still
high but I’m working on it)
In November, I had Thanksgiving turkey and chicken & waffle served on Veteran Day left that made
inventories level very high but I served them all in December.
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
• Chantilly HS
“As per our conversation on 2/3 about the high inventory level at Chantilly, we all have been
working diligently on lowering any excess inventory. I personally mini inventory the freezer and
stockrooms before placing any pending orders .We have lowered our paper ,drinks, and any
excess produce as we are able to add needed items if needed in an emergency . To date there
is visible reduction .Our goal is to meet our target
I received your email with the inventory tracking chart. Woodson may have temporarily higher
inventory levels occasionally depending on timing, the main reasons being:
• 1. Due to two week order/delivery schedule of Dori Foods for our school, we tend to stock two
weeks' worth of items in our inventory.
• 2. High schools tend to have many events (i.e. special programs/events, field trips,
standardized testing, etc.) that cause breakfast and lunch sales to fluctuate much more
dramatically.
• 3. Our school has excellent a la carte and snack sales. It is important to keep our par levels to
meet demand.”
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Inventory Management:Case Study
• Annually review inventory turn over rate
• Can be used to evaluate manager’s performance
• How well menu being followed
• Menu evaluation – products used adequately on cycle
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
Questions
© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA© COPYRIGHT 2017 SCHOOL NUTRITION ASSOCIATION | #ANC17 | ATLANTA, GA
PROFESSIONAL STANDARDS CODE
• This session provides one (1) CEU
– Key Area: Administration - 3000
– Professional Standards Code: 3340