How to maintain optimum stock levels for longer shelf-life products
The focus of many retail bakers is to get the ordering right for one-day life products, as these are responsible for the most waste and lost sale opportunities.
This is critical to the profitable running of any bakery store and should be core to any ordering system employed by the business. However, in most bakeries, this has resulted in the ordering of longer shelf-life products, packaging, and cleaning materials being left to the judgement of their store managers.
All too often, this results in the rubber stamping of orders which, in turn, leads to waste where there should not be any and excessive stock levels, not only on products but also on packaging and cleaning materials.
If stores are penalized for excessive waste levels, store managers routinely cut back orders indiscriminately. While this reduces waste, it also leads to lost sales.
In an increasingly competitive market, many bakers are now looking to become more efficient in this area. Multi-day life products often represent well in excess of 50% of their product range, and improving ordering of these offers significant benefits.
Even though products may have a shelf-life of days or even weeks, the quality of most are at their best the fresher they are at point of sale. Optimizing stock levels and getting them to fluctuate with the weekly trading pattern therefore gives bakers best chance of selling the freshest possible product from the most appealing displays.
Improvements
Where production capacity and efficiencies are an issue, reviewing weekly ordering patterns for longer shelf-life products is another area bakeries are making improvements.
By only making products on set days, bakeries can spread the load across the week and improve efficiencies through fewer, but longer, production runs. With better ordering and stock control for these products, it is possible to make such changes without previous levels of concern that stores will run out of, or carry, excessive stock.
Using solutions such as Cybake’s Instore sales-based ordering system, bakeries can now factor in all of the aforementioned to take the guesswork out of the ordering of these product lines.
Where there is reliable sales data which can be sent to Cybake, forecasts of what to order can be generated up to a week in advance. If the order cut off is, say, two days before delivery, then a stock take can be carried out just before the order cut off time.
Cybake will then take into account deliveries and forecast sales between the time of the stock take and the next delivery and adjust the order accordingly. In this way, fluctuations in stock levels are taken into account for every delivery.
Where the sales data is unreliable, or there is no sales data (e.g. paper bags), Cybake uses previous stock take and delivery quantities to calculate a theoretical stock-based usage. The orders are then generated in the same way as for sales-based orders, again adjusting for stock fluctuations.
Restock levels
The third alternative is to set restock levels. For example, if the store has a freezer with limited space for unbaked savories, a restock level can be set for each product.
If a freezer only has room for, say, 10 boxes of sausage rolls, then the advanced order will always be 10 boxes. A stock take can be carried out just before the order cut off time. Cybake will then take into account deliveries and forecast stock usage between the time of the stock take and the next delivery to adjust the order accordingly.
For example, if the stock take was 4 and the forecast stock usage before the next delivery was 1, then the order would change from 10 to 7, as the stock level at the time of the next delivery is expected to be 3 (stock take of 4 less forecast stock usage of 1).
This method of ordering can be used for packaging and cleaning materials as well as products.
In each of the three scenarios above, Cybake forecasts the order to cover sales/usage between order dates. To this order, an additional buffer quantity can be added to ensure adequate stock cover between deliveries.
In summary, an opportunity exists for retail bakeries to improve their ordering and stock control for products and consumables with a shelf life of more than a day. Leaving this to be controlled at store managers’ discretion is no longer the only option, and the gains in improved product freshness, stock availability, sales, and reduced waste can be considerable.
If you would like to see how Cybake can improve the ordering for your stores, why not get in touch today?
Baking and hospitality expert Rob McIlroy is Cybake’s senior implementation specialist.
