Nearly doubling the increase of 2012, 2013 is expected to see a food and supply cost increase of at least 4.2%. An increase of up to 20% over the next two years is within the realm of possibility according to experts, so it is critical for healthcare foodservice operators to prepare for the upcoming financial storm.
It is important to know the factors driving increases in 2013 food costs. At the top of the list, food costs are dramatically impacted by the yearlong drought of 2012 and the governmental Ethanol Policies. The highest increases will be seen in milk, eggs, beef, poultry and pork products. Your boss may expect your department to absorb these increases while staying within budget. While outsourced foodservice in healthcare forecasting to increase 5.5% in 2013, contractors have more ammunition than ever to convince your Administration they can manage the foodservice department better than you can.
The time is now for you and your team to put your “thinking caps” on and come up with budgetary solutions to control food costs without sacrificing quality and customer service. You must prove that you can compete with any service company.
Foodservice Software, Diet Office, and Food Costs
Here are a few suggestions for controlling your foodservice operation’s food costs:
- Foodservice management software is the simplest way to show a big impact. If you don’t have it, get it! If you do have it, are you using all of the available modules? Did you know that a manual process in your diet office creates an increase cost in man hours of 4-5%? The manual process for menu creation, production sheets and inventories also consume an average of 14-21 hours per week. Utilizing foodservice management software will reduce the manual processes in your department, saving time and money.
- Control of food waste. You need to have a system in place that forecasts your needs, tightens up production, controls inventory and reduces waste. Another 3%-5% budget reduction can be found by controlling food waste.
- Move to a centralized call center to provide on-demand room service. Room service will increase patient satisfaction and has been proven to be the most effective approach to reduce costs.
I know you’re thinking, “My hospital can’t afford a software system to help management of food service.” If you think you can’t afford it now, where do you think the funds will come from when food costs go through the roof? Now is your best chance to get what you need, and when you show the ROI, you’ll be a HERO!
Foodservice Costs: An Operational Assessment
It’s always good practice to do a thorough assessment of your department on a routine basis. Get a fresh eyes approach by asking your current vendors if they provide this type of service. This will assist you in preparing for tight economic times ahead in the foodservice industry. Then make a quality improvement plan to present to your Administration, demonstrating how foodservice management software can play a key role in supporting your department’s goals.
Most likely, your boss is going to be asking a lot of cost-related questions this year. What is your plan to improve your foodservice operations for 2013 and beyond? It is important for you to know your department’s operational efficiency and have a continuous improvement plan in place. If you don’t, there is a contractor out there who does and may have already approached your boss showing how they can “fix” your department and reduce foodservice costs.
“For tomorrow belongs to the people who prepare for it today.”
– African proverb.
by Tracey Turnquist, Director of Marketing and Sales, Vision Software
Foodservice Director – Contract ops to lead sales growth, NRS says.
Retrieval date: 12/13/2012
USDA Economic Research Services, United States Department of Agriculture – Food Price Outlook, 2012 – 1013
Retrieval date: 12/19/2012
Don Miller and Associates – Prepare for Battle
Retrieval date: 12/11/2012
Huffington post – U.S. Drought: Food Prices will go up in 2013, USDA says.
Retrieval date: 01/11/2013
The Poultry Federation – Increase Food Costs due to U.S. Ethanol Policy Are Eating American Family Budgets.
Retrieval date: 01/09/2013