Food Deliveries

This is a topic that I find myself addressing in more and more consulting visits.  Often when interviewing a manager/director I ask, "do you have a procedure for someone to check in a delivery?"  I am almost always told, "yes".  Then when I am out in the district visiting individual buildings, I inevitably encounter a delivery problem of one kind or another.  

Normally these encounters occur at meal time, when the driver is attempting to bring food, milk, supplies into or through a busy kitchen.  Then the driver either leaves a delivery slip on the manager's desk, or asks someone to sign the slip.  I stand there observing, and say to myself, "oh no, not again".  Later when time allows, I will ask the manager about the delivery, and if it is normal to have the slip left without the delivery being checked in.  I am then told, "well, this vendor always delivers at that time, and I am to busy to check in the order, what else can I do?"  And I say to myself, "here we go again".

If I received a fee for the number of times that I had to address this one issue in a consulting report, I wouldn't have to consult anymore.  It's a simple issue, and one that everyone who reads this post will say, that's not a problem for us.  But, I ask you, do you really know what happens out in those buildings when you are not there?

Food Deliveries must always be checked in – Without question the process and procedures (or lack thereof) used for the receipt of food, beverage, and supply deliveries can significantly affect a program’s food and supply costs. 

The following is what I wrote in a recent consulting report. 

 “The GGGG Food Service delivered an order, to the high school, at noon, the busiest time of the day.  Earlier that morning, I questioned the director, about checking in deliveries, and she assured me that all deliveries are “always checked in”.  Yet, during this delivery she sat in her office, with me, watching the delivery take place, knowing that the staff was serving lunch and there was no one available to check the order.  When the delivery was complete, the driver presented the invoice to the cook for signature.  The cook signed it without knowing what was delivered, the quantities, or if the price posted on the invoice was correct.  As it turns out, when the director checked the order (as a result of a question that I had about the French Toast), she found that the discount for that product did not appear on the invoice.  In fairness to the Cook, I believe that she had never been trained with respect to the proper procedure for checking in an order, or its importance.

in another incident, I was in a middle school during the first week of school.  When I checked the ice cream freezer, it was empty.  I asked, "don't you sell ice cream in this building?"  The answer was, "yes, but the company hasn't made its first delivery yet this year".  A while later, the ice cream delivery arrived.  After  all the "hello's", how was you summer, and "It's great to see you again", etc., the driver put all the ice cream in the freezer and handed the manager the delivery slip to sign.  I asked the manager, in front of the driver, "don't you check the delivery before you sign the slip?"  To which she replied, "Tom" would never cheat me and besides, I don't have time".  Here we go again.  What did I do?  I went over to the ice cream freezer, pulled all the boxes out, and checked them against the delivery slip.  And, VIOLA!  The driver had shorted her 6 boxes.  She couldn't believe it.

Making deliveries to kitchens at the busiest time of the day is a favorite tactic of drivers who know that at these “busy times”, staff does not have time to adequately check the delivery for shortages, price changes, or substitutions.” 

While I am not accusing anyone, it is certain that when a driver succeeds in obtaining a signature for a full delivery, he/she will not have to account for any overage upon his or her return to the warehouse, if the product is not on the truck.  By this I mean, if/when a delivery is actually shorted, and the shortage is not noted on the invoice, the driver can deliver the “extra product” anywhere he/she chooses.

In these incidents, my recommendation is for the district to advise all food, milk, supply and other delivery vendors that deliveries will not be accepted between the hours of meal service (e.g. 11:00 am to 1:30 PM) and that any delivery (or sales person) arriving during these hours cannot be checked in (or will not be seen).  As a result, while the driver will be permitted to leave the delivery, and the invoice will not be signed.  If this is not acceptable then the entire delivery will be rejected.  No exceptions.  In addition, vendors must be advised that if/when a delivery is rejected, because it arrived at a time when it could not be properly checked in, a return delivery will be expected the next day at the designated time.  Confronting a driver in this manner will be very difficult for the staff, but the amount of money at stake is much too high to allow for any variance in this procedure.  For this reason it is imperative that all vendors receive a written letter that advises them of this policy.  Believe me no restaurant or food Management Company would accept a delivery at their busiest time of day.  If your vendor cannot comply, find another vendor. 

Let me say, that I realize that smaller programs will have difficulty issuing this type  of ultimatum to a vendor, when there is little competition in their (rural) area.  However, it's all about the bottom line.  The remedy for these programs, is to either have the driver wait until someone is free to check in the order, or pull a worker from what he/she is doing to check in the order.  For me checking in this order would be far more important than whatever else that individual was doing at the time.

We all know what the cost of labor is doing to our bottom line, add to that the cost of "wellness", and the increase in food costs that we all face, and I scratch my head wondering why this one simple, and cost saving measures is not "continually drummed in", at every staff development session.  With all that said, if you're reading this, I hope you take a physical inventory every month.  If you don't, you have another problem.

Enjoy, and as always, I welcome your comments.

Frank

Meals per Labor Hour

When labor costs exceed fifty to fifty-five percent of revenue (the normal recommendation), not enough money is left for food, supplies, and equipment.  As a result, the School Lunch Manager/Director is often caught between high food costs and high labor costs.  He/she may then feel the need to compromise on menu offerings and quality to save money.  This is occurring at many school districts, today.  Food and labor costs are high and increasing yearly.  According to the P&L, of a recent district that I visited, the cost of labor to the program accounts for 75% of the program’s revenue.  Neither their food cost (40%), nor their labor (75%) costs are in line with that which I recommend for attaining self-supporting status. 

With that said, there is a direct correlation between the number of meals served, the type of menu, and the number of labor hours needed to produce and serve the meal.  When we assess labor costs in the food service arena, we base our recommendations on a simple calculation termed “Meals per Labor Hour (MPLH)”.  For me, the calculation is simple but the result can be very revealing.  However, every time I read someone's recommendation for calculating MPLH, I find a difference.  Some methods will justify more labor, while others justify less. 

My method, which is realistic and results in a very attainable number of MPLH is:

18–20 MPLH in a program that uses a combination of convenience foods and on-site production 

  10-15 MPLH in a program that is primarily full production

  20-22 MPLH in a program using convenience foods

  25-40 MPLH in Satellite Programs and for breakfast

 Sample Calculation:

Total Hours	Bkfst ADP	Lunch ADP	Total Meals	MPLH
60	279	356	635	10.6

In the above calculation I have combined breakfast and lunch to determine the MPLH on a district wide basis.  Normally, I might calculate breakfast and lunch separately, but breakfast offerings (unless a simple cold breakfast is offered) are becoming more sophisticated, especially at the secondary level.  Therefore, its cost is not far from that of lunch, so I consider them equally.  I will say that this depends on the breakfast offerings, and may not apply to everyone, but if breakfast is simple and basic, and participation is low, then I would say, that is another problem that requires attention.

Although reducing labor is often a consideration when I conduct a program evaluation, it remains one, which I rarely recommend.   I would prefer to put any excess labor to work enhancing menus, with the hope of increasing participation and thereby increasing program revenue.  However, when a program's rate of participation, is high, (let's say 60% or more), the options to increase participation further, which can justify excess labor, may be  limited.

My recommendation is for most districts to attain 18 MPLH.  Accordingly, serving an average of 635 meals per day (my sample district) would require only 35.2 total labor hours per day (635/18), and suggest an excess of 25 hours per day.  However, in this example, my district also serves ala Carte, and snack items, at the high school.  The sale of these items requires a certain amount of labor and must be included in any MPLH calculation.  Therefore, I use a “conversion factor” to convert ala Carte sales into equivalent meals for use when calculating MPLH.  The conversion factor that I use ($3.00) is that which I recommend that districts under contract with a Food Service Management Company, use for them to calculate equivalent meals for contract billing purposes.  However, in my opinion, any conversion factor used should not be less than the total Federal and State reimbursement for a free lunch.

 

My sample district had $33,141.00 in ala Carte sales, which converts to 11,047 equivalent meals per year, or approximately 63 per day, district wide ($33,141.00/$3.00/175 days).  The addition of 63 equivalent ala Carte meals to the calculation, means that the program essentially served 698 total breakfasts, lunches, and equivalent meals.  Accordingly, the service of 698 reimbursable and equivalent meals now calculates to an average of 11.6 MPLH and justifies 39 hours per day.  Note, a management company will attain 20 -22 MPLH with an enhanced menu.  Based on this calculation, and considering that (in this example), participation is high and may not be increased further, labor hours must be reduced.

Several points of information must be made here to fully bring this calculation into perspective:

1.    The total hours used includes the School Lunch Manager’s time, since his/her salary is a direct cost to the program, and he/she is available daily to “help out” as might be needed. 

2.      Recommendations that I may, make elsewhere in a report, to expand the menu offerings in the district to offer more “school prepared” foods, and a more sophisticated secondary breakfast, will require more staff time to prepare.   But every district is not the same, and for me I really need to see a program in operation, before I stray from the calculated MPLH recommendation.

3.      It is imperative that every School Lunch Manager closely monitor meals and ala Carte sales monthly.   If efforts to increase student participation in the program are not successful, and/or ala Carte sales revenues decline (because of wellness), the district may have to bring labor hours in line with MPLH recommendations through attrition, or direct reductions in the number of hours employed.  In many districts the previous year's ala Carte sales revenue might have been higher, and therefore justified more hours of labor per day.  This is one reason why I strongly recommend that a line of healthy snacks, and ice cream be offered for sale, every day at all levels, that vending machines are added to the cafeteria, and that a more “relaxed” wellness policy is considered.  Without increasing these extra sales, the current level of staff hours, in many districts, cannot be justified, and district subsidies become necessary.

I know that the above statement will meet with resistance with some.   Nonetheless, if your Administration and Board want your program to operate on a self-supporting basis, and generate the amount of revenue for which it is capable, a paradigm switch may be needed.  I often discuss Food Service Management Companies, but at this point suffice it to say, the “playing field is not level”.  The company will not be bound by local philosophy, you either want them to run the program, or you do not.  With that said, they must, abide by the same policy, and law as the district.  However, they have “tactics” that they use that are unknown to most district personnel, and there always remains their “threat” to “walk out” leaving the district without a food service operator, if they do not “get their way”.

The Challenge of Wellness

In recent years, many things have changed in the school food service sector on a local, state, and national level.  Specifically, the cost of food, labor, and employee benefits are increasing faster than the ability of the program to generate revenue at the same rate.  At the same time, today’s food service director, has to contend with the national trend to fight childhood obesity by eliminating certain foods and snacks from the school cafeteria menu.  I am a proponent of nutrition and nutrition education in schools but the school cafeteria is not to blame for “obese children”.  We must remember that, good nutrition cannot be mandated, rather it must be learned.  Furthermore, that learning must begin in the home.  Removing food items from the school lunch line to advance the “nutritional cause” does not keep students from eating these same foods at home or bringing them from home in their lunch box.  Students (especially at the middle and high school level) know what they want to eat, they have the money to spend, and when they do not receive what they want at school, will bring it from home, order it delivered, or (where possible) leave the building to get it.  As I often write, I am a proponent of good nutrition but when a program has lost $10,000.00 or $50,000.00 or $90,000.00 in one year, it is incumbent on committee members, parents, administrators, and the Food Service Director to “revisit” menu planning with respect to the high cost of “wellness”.  A plan must exist for replacing revenue that is lost when “favorite foods” and snacks are eliminated from the menu, and when the cost of whole grain foods, fresh fruits and fresh vegetables are consuming too great a percentage of program revenue.

The challenge for today's food service manager and his/her team is considerable, and in order to succeed he/she, the building principals, and district administration must be prepared to adopt the same philosophy and strict cost control techniques employed by a food service management company; that is a strict  business approach.  Unfortunately, this often means a paradigm change, in the way in which the program is viewed, managed and operated.

A Food Service Director, must be “out” in the district “managing and directing” the program’s operation.  He/she must be able to stop by each building several times each week and at various times of the day to observe meal preparation and service, to offer in-service training where needed, and to evaluate the quality of the menu, over production, and more.  But, the "demands of the desk" are many, and this is not always possible.

The job of today's school Food Service Manager/director is a complex one, requiring diverse skills and training to do it correctly.  In essence, he/she has a four-fold responsibility: to serve high quality meals; to provide an attractive and sanitary setting for students to dine and to be an efficient, and cost conscious manager.  The school Food Service Manager/director must do all this while facilitating the training and staff development of the food service team.  Succinctly put, he/she must know when change is necessary, what needs to be done, when it is to be done, and who is going to do it and then act on that knowledge.  Moreover, in order to succeed he/she must have the support of district administrators, building principals, and the community.  This role is unique in every school district; for other than the Superintendent and Business Official, the Food Service Manager is the only administrator charged with generating revenue, balancing operational budgets, and working within that budget.  This challenge is one which custodians (and even building principals) do not typically have to contend.

We all know that anything and everything is possible if funding is not an issue.  Therefore, every Administrator, Board Member, Building Principal, Committee Member, custodians, and bus drivers involved in decisions that affect the food service program must understand that each decision affects the bottom line in either a positive or negative manner.  Additionally, each decision may ultimately impact on the overall district budget and local tax levy.  I must state that although I believe building principals should have some input with respect to the operation of the food service program in their school, they are not charged with the need to operate a “self-supporting” program, or to generate the revenue necessary to pay their staff salaries and benefits.  In addition, principals are normally not trained in the financial management issues of a food service program.  Accordingly, each must fully understand the financial consequences and/or benefits of any recommendation that affects the operation of the cafeteria in “their” building

  

Essentially, when a district has a program that is losing money, but wants it to be self-supporting, it has several choices.  Their choices include:

1.  The cost of operating the program must be reduced.  Accordingly, efforts would have to be directed toward significantly reducing operational costs to recommended levels, for attaining a self-supporting program.  Essentially not spending any more than it brings in.  

In addition many programs will have to negotiate themselves out of generous labor contracts, that the program cannot afford.  In many instances, the program must also reduce food costs, while increasing revenue.  Increasing revenue can include increases in student participation, increased selling prices and increased Ala Carte and vending sales.  This option will normally present a significant challenge for the district, and the food service team. 

2.  Subsidize the program by ever increasing amounts annually.  If, for example, a $50,000.00 subsidy was appropriated the previous year, the amount of subsidy will increase to greater amounts every year.  Having an open checkbook to operate a school food service program is not a viable option for any district.

3.  Include a budget item, to voters, to subsidize the program.  If approved by the voters, the amount requested will have to increase each year, and could be denied in a subsequent vote.  If denied by the voters, the program would be on austerity and, therefore, legally cannot operate in the red.  This would most certainly assure closure of the cafeteria.

4.   Cease secondary school participation in the School Lunch program and move to an Ala Carte food service program, which will allow for lower food costs, and increased program revenue.  By choosing this option the program could sell anything that it wants, at any price, and would not be bound by federal meal pattern requirements, or minimum portion sizes.

5.  Contract the program out to a Food Service Management Company.  

I am not in favor of all of these options, but we must recognize that they are options, and each is available to the Board of Education, even #4.

There is “no magic” to achieving success; bringing a program that is losing money to a more cost effective status is not easy, and normally necessitates a major changes in the way that the program has operated to date.  My recommendation would normally be to pursue a combination of item 1, and item 2 presented above.  However, I do not believe that most districts are really able to negotiate itself out of an existing labor contract that the program cannot afford.   

Regardless, of the decision made by a Board of Education, the Food Service Manager and his/her team will have to “step up” and make difficult managerial decisions to meet the challenge of moving a losing program to self-supporting status.  The responsibility then becomes his/hers, but must be shared by the Board and the administration.  If a manager is to succeed, the entire district, will most likely have to adopt a different philosophy, a strong business approach to the program’s operation, with a more pro-active approach to menu planning, purchasing, and use of available staff hours – essentially that “paradigm change” that I wrote about earlier.

Our jobs are becoming more and more difficult, and adding new and unfunded nutritional mandates to program regulations will, in my opinion, force more programs to drop participation in the lunch and breakfast programs, or to contract with a Food Service Management Company.  Let's hope that doesn't happen.

Be well my friends.

 

 

What Happened to the ASFSA?

The American School Food Service Association (ASFSA) remember them?  Some who read this blog may remember how much I was against the name change to School Nutrition Association.  So, what's in a name?  Let's look at it.

One says it is an association that represents the "school food service"; the other that it represents "school nutrition".  School nutrition, who could be against that?  Well, when I see what "wellness" has done to self-supporting programs, the number it has pushed to a Food Service Management Company (FSMC), and the number of employees who have had hours cut in order to save local taxpayers money, I say "I tried to tell you".  And, I am against it.

Consider this, can the SNA ever take a stand against the cost of wellness?  No, it would be totally contradictory to their name.  In my opinion, they support only nutrition in the school community, regardless of its cost; they no longer support the "school food service program".

Like many other aspects of today's society where, some want a name change to support their agenda, we have supported a change that removed the name American and school food service from the name of the association that is supposed to represent us.  This group now supports any effort that creates a mandate for others to subscribe to their point of view.  If you can't convince them, legislate.  Moreover, they have now geared up so many vendors and food producers, and distributors to move to more expensive "nutritional foods", that these "producers" now contribute many dollars to keep the SNA pushing "nutrition", in order that they do not lose money on the product changes they have made.

There is nothing wrong with nutrition, or encouraging good nutrition.  However, as I have written a thousand times, good nutrition cannot be mandated, it must be learned and that learning must begin in the home and in the CLASSROOM.  Teach students at the elementary level about nutrition and how to make the informed healthy decision when they get to the cafeteria.  Stop putting our cafeterias in debt, stop threatening staff with labor cuts, and stop pushing our programs into the hands of a FSMC, all in the name of "wellness".  And leave the secondary schools out of it.  These students drive to school with a coffee in one hand and a cigarette in the other, yet we tell them they can't have a potato chip in the cafeteria.  These same students rush out the doors at 3:00pm and reach for another cigarette.

I know all this sounds political, but that is not my intent.  I am tired, a consultant, who has sat with many Superintendents, Business Officials, and Board Members behind closed doors and heard that "this operational loss can't continue", or "these district subsidies can't go on".  "Unless there is change, we are going to a Management Company".  Then I walk down stairs and see students with Dunkin Donuts coffee cups in their hands, or I see them tossing them in a trash can in front of school before entering the building.  I say to the staff, "there is money to be made here", let's serve coffee at breakfast, Dunkin Donuts style breakfast sandwiches, etc.  And, what do I hear?  "We can't do that", and I ask why?  Oh, because of the caffeine "they" won't allow it.  I respond, "fine serve de-cafe" and then I hear "we don't have the time for all that".  In other instances the principal's morning schedule prohibits time for breakfast.  I think, great, when the management company comes in they will do all those things anyway, for less money, and with fewer "hands" to help. 

Before I forget this, let's not forget that breakfast is a huge money maker and can save a lot of jobs, yet building principals control the extent to which we can offer this "money making" and very nutritional service to students.  I have never seen a FSMC operate a school program and not immediately focus on breakfast, the unrealized source of big money for the program.  Despite all of this, I have never heard the SNA step up, and talk about the effect morning schedules have on breakfast at school, on nutrition, or the self supporting status of a program.

I have been proud, to be a consultant, who rarely ever recommended cutting or reducing labor hours.  I could always find a way to keep "excess hours" working to improve the program or to generate additional program revenue.  Now, for the first time this year, I find myself saying "you have no choice but to cut hours, or to renegotiate the current labor contract".  One is easy, the other "easier said than done".

You all may disagree but "wellness" is expensive and that expense is being paid for "on the backs" of our food service staff". 

As a consultant, I used to enter a district, knowing that I was there to help, that I could save jobs, and help improve the program.  Now, I worry that I will hear, "oh no, here he comes"; "we are going to have hours cut, or the district is looking at a management company."  I fear that my presence now has a depressive effect rather than being viewed as a pro-active approach by the administration.

If you know me, you know that I once served on a State SFSA executive board for 9 years, and worked to support the ASFSA.  Today, I have no use for the SNA.  Why, because they do not represent the school food service worker, but want dues money from these hard working professionals, to lobby for "politically correct" legislation.

I work from home (unless I am in the field), and I always have a news channel on the TV - CNN or Fox, and I never hear anything from the SNA about what is happening to school food service programs in this country.  They have the power, the money, and the name to stand up and speak for all of us, to take out full page ads in the major newspapers, yet they do not.  Their officers have salaries, and benefits, and are secure in their jobs.  These same benefits are the first that are looked at and taken away from members when their program loses money, or goes to a management company.

While the SNA may lobby and ask for more money for school feeding programs, they know that by getting schools more money, they make more money.  Do they ever stand up and discuss the cost of wellness in schools or the need for moderation, no it would be contradictory to their name.  Do they offer to provide technical assistance to programs that are facing a management company contract?  No, they do not.   Sometime check out the large donators and contributors to the SNA, you will find the large FSMC's on that list.   Hmmmmm!  So what's in a name?  A lot.

Anyway, I had to get this off my chest.   Have a good day, and don't be afraid to speak up about the cost of "wellness" to your program.  Teach good nutrition, don't mandate it.  Lastly, never think that I am opposed to wellness or good nutrition, I am not.  I am opposed to unfunded mandates that end up costing people their jobs.