Shrinkage and Waste Management

Shrinkage and Waste Management

Shrinkage and waste management is one of the most sensitive aspects of cost control in restaurant businesses. Every lost raw material has a direct impact on profit. The system enables you to record shrinkage and waste, analyse the causes and develop preventive measures.

Creating a Shrinkage Record

Creating a shrinkage record is the process of reporting raw materials that are no longer usable to the system. When creating a shrinkage record, the staff member enters the item name, quantity, unit of measure and shrinkage reason. Shrinkage reasons are selected from predefined categories. These categories include expired, spoiled, spilled, burnt, incorrectly prepared and customer return. Each shrinkage record is processed with a date and time stamp and the staff member who created the record is automatically added.

Shrinkage Types

Shrinkage types are examined in two main groups:

• Production shrinkage: Refers to loss that naturally occurs during the food preparation process. For example, peelings and stems discarded during vegetable chopping fall under production shrinkage. This type of shrinkage is accepted at certain rates and taken into account in recipe definitions.
• Operational shrinkage: Covers preventable losses. Situations such as incorrect cooking, dropped plates and spoiled materials are classified as operational shrinkage.

Waste Reason Classification

Waste reason classification helps you understand the root causes of losses. The system groups shrinkage records by their reasons and reports which reason has the highest cost impact. For example, seeing that the most shrinkage in a period occurred due to expiry dates being exceeded indicates that procurement frequency or order quantities need to be reassessed.

Cost Impact Reports

Cost impact reports reveal the monetary dimension of shrinkage and waste. Each shrinkage record is multiplied by the unit cost of the relevant raw material to calculate the total loss amount. Daily, weekly and monthly shrinkage cost reports are automatically generated. Reports include total shrinkage cost, ratio to turnover, shrinkage ranking by item and comparison with previous periods.

Target Setting

With the target setting feature, a monthly shrinkage cost limit can be defined. When the limit is exceeded, a warning is displayed on the manager screen. Shrinkage targets can also be defined by department and station to clarify areas of responsibility.

Corrective Action Tracking

Corrective action tracking enables recording the measures taken for identified waste causes and monitoring their results. This continuous improvement cycle contributes to reducing shrinkage rates over time.