Welcome to Think Out Loud.
Once a week I take one real operating problem, from a kitchen, a bar, a hotel, a campus or a client I’m working with right now, and think it through out loud. What I saw, what I’d check, what I’d change, and one thing you can do in your own space.
No fluff. No trend reports. Just how an operator thinks.
This week: the money you’ve already spent.
The situation
A multi-unit food business brought me in because margins felt tight. Sales were fine. Labor was a fight, but a familiar one. Nobody could say where the money was going.
First stop: storage.
Across multiple sites, there was $83,000 more inventory on hand than the business needed to operate. Not stolen. Not wasted, yet. Just sitting there, paid for, waiting.
How I think about it
I don’t see a full walk-in as security. I see cash that has already left the bank account. It can’t cover payroll, a repair or anything else until it turns back into a sale.
And while it waits, it needs care. It can’t be forgotten, dropped, eaten, over-portioned or rotated badly. That’s a lot of attention for something that isn’t earning anything. And in foodservice, perishable product is even more high maintenance.
When inventory runs high, it’s rarely one bad order. It’s usually a few quiet habits stacked together:
Par levels nobody has revisited since the menu, the volume or the season changed.
Ordering by feel, because running out feels worse than overbuying, so everyone pads.
Duplicate products across locations or recipes that could share one.
Case sizes that no longer match demand, bought because the unit price looked good.
No one owning the number. Inventory gets counted, but nobody is accountable for what it should be.
What we changed
We consolidated production into one central kitchen, so each site stopped stocking for itself. We made one person own purchasing and transfers between locations. And we put inventory on a weekly scorecard that every manager reports against.
Within the first quarter, inventory came down by $83,000. That’s cash back in the account, and less product to store, rotate and lose.
The goal was never the least inventory possible. It was the right inventory, turned back into cash before it turns into waste.
Try this this week
Walk your storeroom. On every shelf, reach past the front row and pull the item in the back. Check the date it came in.
Anything that’s been sitting there since before your last two orders is cash you’ve parked, not product you’re using. Count how many shelves have one.
Then find whoever places your orders and ask them one question: “What should our inventory be worth at the end of the week?”
Don’t help them. Just listen. If they answer with a number and a reason, you’re in good shape. If they shrug, guess or say, “whatever we need,” you’ve found your leak. It isn’t on the shelf. It’s that nobody owns the number.
That’s it for this week.
If you read this and thought “that’s us,” reply and tell me what you’re seeing. I read every reply, and if you’d like to talk it through, just say so and we’ll find 30 minutes.
Thinking out loud with you,
Dusty
P.S. Know an owner or operator who’d find this useful? Forward it. That’s how this list grows.