“Ugh! This Saturday night I have inventory.”
When I overheard this recently at my neighborhood produce stand, it brought back many a memory. Technically, the produce manager meant to say that he has to complete the inventory function of his job — counting all the cases of fresh and dry produce in the back room and cooler, and estimating the same on the sales floor.
Following this, the produce manager inputs the information into a formula that calculates how much gross profit (and GP percentage) the produce department has earned. This includes sales, cost of goods, and, of course, the beginning and ending inventory of a given period.
It isn’t just someone walking around with a clipboard. Inventory time can be a bit nerve-wracking.
Inventory can also be time-consuming, and if not correct, can spin the results inaccurately. So, it’s best to prepare so that everything is counted and completed at a decent hour.
We were always coached not to reduce our normal ordering and receiving cycle just to minimize the amount of inventory. When produce managers do this, it could misconstrue their final gross profit numbers. Worse, it could cause a department to run so low on merchandise to the point of numerous out-of-stocks and unhappy customers.
In fact, the best training for inventory night should be to operate business-as-usual. Of course, my tendency was to order close in the first place, so that my next delivery would be fresh, and I naturally had minimal back stock to rearrange. Thus, my inventory tended to be on the lower side.
If a produce department is organized and well-managed, taking inventory is no more difficult than writing an accurate order.
On the last Saturday night of the period (month or quarter) as business winds down and everything is neat and organized, inventory sheets in hand the produce manager begins. I liked to start in the back room, going line by line so as not to miss anything. Then I’d turn my attention to the sales area, slowly walking around each fixture, estimating how much inventory was on display.
The important inventory point I later conveyed to produce managers was to be consistent in everything they did from one period to the next. If you’ve ordered consistently, kept a close eye on the billing, rotated faithfully, pushed for maximum sales and kept shrink in check, then inventory should be just part of the process.
Inventory should be something to look forward to, and certainly not to dread, or fear.
Armand Lobato works for the Idaho Potato Commission. His 40 years’ experience in the produce business span a range of foodservice and retail positions. E-mail him at firstname.lastname@example.org.