Save Money by Reducing Your SKUs

Do you need all the food products your business orders? Rationalizing SKUs can save you money on ordering, allowing you to reinvest in your business. However, when cutting back on orders, you want to make sure that you’re not cutting back on quality. That’s why it’s important to develop a reliable SKU rationalization process. Foodbuy Foodservice has advice.

Identify Redundancies

The first step in your SKU rationalization process should be detecting redundancies in your ordering. You can start by reviewing your regular orders and comparing with your rollover stock and waste at the end of each order period. These overages can guide you to products that may not be necessary.

You should also look at your current menus for ingredient similarities.  Here are some examples:

• Liquid eggs in quiches and whole eggs in sauces  
• Bacon strips for brunch and bacon bits in dinner carbonara
• One dough type used for rolls and another for flatbreads        

Once you find these redundancies, you can determine whether or not one SKU can fit both applications without negatively impacting quality.  

Get Your Chefs on Board

Your culinary team is the strength behind your menus. That’s why it’s important that you leverage their knowledge during the SKU rationalization process. Once you’ve identified potential product redundancies, your chef team can help you understand which redundancies are necessary for high-quality dishes, and which products could potentially be consolidated. Their input can help you retain quality even while making ordering changes.

Furthermore, securing your chefs’ buy in early on in this process, can prepare your teams for any potential changes. If they’re able to assess and contribute to procurement updates, they’ll be able to guide your teams through menu and recipe updates. This makes implementing your changes much easier.

Review Product Options

Sometimes, you can rationalize SKUs by using an item you already order in multiple applications. Other times, you may need to source a new item altogether to fit multiple recipes. Either way, you’ll want to make sure you test out your critical recipes using your updated SKUs.

Sometimes, you can sample products from suppliers during your SKU rationalization process. This can allow you to use SKUs in several applications to determine whether they’re a fit.

Crunch the Numbers

Once you’ve identified SKU rationalization options, you’ll want to run numbers to predict savings from rationalization. Many operators use a data analytics platform to do this. Foodbuy Foodservice Members have access to MPower – an easy-to-use platform that shows savings opportunities from a user-friendly dashboard. You can also use MPower to run reports on specific items so that you can make the most informed choices for your business.

Make a Change for the Better

An airtight SKU rationalization process can help you reduce costs while maintaining your culinary standards. The key is in making informed decisions based on your menus, business needs, and budget.

For more procurement support, become a Member with Foodbuy Foodservice today. Our team of procurement experts can help you find solutions that will save you money and support your business.