Description
Inventory management has long been considered a critical component of a well-managed school nutrition program. According to a United States Department of Agriculture (USDA) cost study, 46 % of school nutrition program revenue is spent on food (USDA, 2008).
Inventory
Management
and Tracking
National Food Service Management Institute
The University of Mississippi
Item Number ET109-12
2012
Reference Guide
Inventory
Management
and Tracking
National Food Service Management Institute
The University of Mississippi
Item Number: ET 109-12
2012
Reference Guide
Tis project has been funded at least in part with Federal funds from the U.S. Department of Agriculture, Food and Nutrition
Service through an agreement with the National Food Service Management Institute at Te University of Mississippi. Te contents
of this publication do not necessarily refect the views or policies of the U.S. Department of Agriculture, nor does mention of trade
names, commercial products, or organizations imply endorsement by the U.S. government.
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In accordance with Federal law and U.S. Department of Agriculture policy, this institution is prohibited from discriminating on the
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Independence Avenue, SW, Washington, DC 20250-9410 or call (202) 720-5964 (voice and TDD). USDA is an equal opportunity
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© 2012, National Food Service Management Institute, Te University of Mississippi
Except as provided below, you may freely use the text and information contained in this document for non-proft or educational
use providing the following credit is included
Suggested Reference Citation:
National Food Service Management Institute. (2012). Inventory management and tracking reference guide). University,
MS: Author.
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[email protected].
Education and Training Division
Information Services Division
Te University of Mississippi
6 Jeanette Phillips Drive
P.O. Drawer 188
University, MS 38677-0188
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Te University of Southern Mississippi
118 College Drive #5060
Hattiesburg, MS 39406
Phone: 601-266-5773
Fax: 888-262-9631
National Food Service Management Institute
The University of Mississippi
Building the Future Through Child Nutrition
Te National Food Service Management Institute was authorized by Congress in 1989 and established in 1990 at Te
University of Mississippi in Oxford and is operated in collaboration with Te University of Southern Mississippi in
Hattiesburg. Te Institute operates under a grant agreement with the United States Department of Agriculture, Food
and Nutrition Service.
PURPOSE
Te purpose of the National Food Service Management Institute is to improve the operation of child nutrition
programs through research, education and training, and information dissemination.
MISSION
Te mission of the National Food Service Management Institute is to provide information and services that promote
the continuous improvement of child nutrition programs.
VISION
Te vision of the National Food Service Management Institute is to be the leader in providing education, research, and
resources to promote excellence in child nutrition programs.
CONTACT INFORMATION
Headquarters
Administration Division
Te University of Mississippi
Phone: 800-321-3054
Fax: 800-321-3061
www.nfsmi.org
ACKNOWLEDGMENTS
WRITTEN AND DEVELOPED BY
Julie Boettger , PhD, RD
GRAPHICS BY
Carole van Almelo
Amy Howell
TASK FORCE MEMBERS
Sincere appreciation is expressed to those who contributed their time and expertise to plan these materials.
REVIEWERS
Sincere appreciation is expressed to those who contributed their time and expertise to review these materials.
EXECUTIVE DIRECTOR
Katie Wilson, PhD, SNS
TABLE OF CONTENTS
1
Table of Contents
INTRODUCTION ................................................................................... 3
Inventory management best practices ................................................................................................. 4
Tools for inventory management ......................................................................................................... 4
Traceability systems ................................................................................................................................ 5
Traceability practices .............................................................................................................................. 5
Scope and overview ................................................................................................................................ 5
Organization of information ................................................................................................................. 5
CHAPTER 1 – School Nutrition Supply Chain ........................................ 7
Supply Chain Orientation ..................................................................................................................... 7
Internal Supply Chain ............................................................................................................................ 8
External Supply Chain ........................................................................................................................... 9
Flow of Information ............................................................................................................................. 10
CHAPTER 2 – Basis of Inventory Control ..............................................11
Role of Inventory Management .......................................................................................................... 11
Customer Service .................................................................................................................................. 12
Efciency ............................................................................................................................................... 12
Financial Management ........................................................................................................................ 13
Managing Quantities ............................................................................................................................ 13
Food Safety ............................................................................................................................................ 14
CHAPTER 3 – Traceability ..................................................................... 17
Current Climate .................................................................................................................................... 17
What is Traceability? ............................................................................................................................ 18
Federal Oversight Priorities ................................................................................................................ 18
Voluntary Initiatives ............................................................................................................................. 19
Legislation ............................................................................................................................................. 20
Benefts ................................................................................................................................................... 20
Barriers ................................................................................................................................................... 21
Get Ready For the Future .................................................................................................................... 21
Item Identifcation ................................................................................................................................ 22
Voluntary Standards ............................................................................................................................. 24
Critical Tracking Events and Recordkeeping .................................................................................... 25
Internal and External Traceability ...................................................................................................... 25
Role of Technology ............................................................................................................................... 26
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Inventory Management and Tracking Reference Guide
CHAPTER 4 – Best Practices for Inventory Control ............................. 27
Menu Planning ..................................................................................................................................... 28
Procurement .......................................................................................................................................... 28
Forecasting and Ordering .................................................................................................................... 29
Receiving ............................................................................................................................................... 30
Storage and Issuing ............................................................................................................................... 31
Inventory Control Records .................................................................................................................. 33
Production ............................................................................................................................................. 35
Service .................................................................................................................................................... 36
Summary ............................................................................................................................................... 38
CHAPTER 5 – Responding to Food Emergencies including Recalls .... 39
Preparing for Problems ........................................................................................................................ 39
Identifying Stakeholders and Teir Responsibilities ....................................................................... 40
Commercial Products .......................................................................................................................... 42
USDA Foods (Brown Box and Processed) ........................................................................................ 43
CHAPTER 6 – Standard Operating Procedures ................................... 45
Inventory Management and Tracking Checklist .............................................................................. 60
APPENDIX .............................................................................................65
Language for Bids and Processing Agreements ................................................................................ 65
RESOURCES .......................................................................................... 67
REFERENCES ........................................................................................69
ACRONYMS .......................................................................................... 73
GLOSSARY ............................................................................................. 75
Introduction
3
Introduction
TERMINOLOGY
Bioterrorism: Te deliberate use of biological, chemical, physical, or radioactive agents for the purpose of causing
harm.
Foodborne illness: An illness carried or transmitted to people through food.
Hazard analysis and critical control points (HACCP): A food safety system based on principles to identify,
evaluate, and control hazards.
Recall: A process used to remove products from the marketplace when there is reason to believe the products may
be contaminated, misbranded, or cause health problems.
Standard Operating Procedure (SOP): Detailed written instructions for a process that must be followed to ensure
a desired outcome.
Supply chain: Te system of interrelated departments, businesses, and agencies through which products, services,
and product information fows beginning with raw materials and ending with the fnal customer.
Time and temperature control for safety (TCS) foods: Foods that need time and temperature controls to prevent
a product from becoming unsafe due to biological hazards.
Traceability: Te ability to trace the history, use, or location of a product.
Trace back or trace: Te ability to determine the origin attributes or history of an item in the supply chain by ref-
erencing records held by each entity.
Trace forward or track: Te ability to determine the path a traceable product takes through the supply chain on its
way to the end customer.
Inventory management has long been considered a critical component of a well-managed school nutrition program.
According to a United States Department of Agriculture (USDA) cost study, 46 % of school nutrition program revenue
is spent on food (USDA, 2008). Controlling this prime cost has been the focus of classic inventory management
practices. More recently, food safety and security issues have added a need for traceability or the ability for schools to
trace food products back to their source and trace them forward to the end consumer. Te Inventory Management and
Tracking Reference Guide presents information about inventory management and tracking that may be new to school
nutrition operators and updates information about traditional inventory management in light of new traceability
expectations.
Recalls of beef, spinach, tomatoes, and peanuts have been in the headlines afer sickening hundreds of people. Quick
response to trace back to the source of contamination and trace forward to warn potential consumers is crucial for
safeguarding public health. More recently, the number and frequency of food product recalls has required school
districts to respond to these incidents by identifying recalled products and determining if they have been received by
the districts, served, or still in stock.
During the last few years, food safety concerns have driven new initiatives that impact inventory control practices.
Te Child Nutrition and WIC Reauthorization Act of 2004 requires schools to implement food safety plans based on
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Inventory Management and Tracking Reference Guide
Hazard Analysis and Critical Control Points (HACCP). Traceability should be incorporated into standard operating
procedures (SOPs) contained in food safety plans because both the source for food products implicated in foodborne
illness and the ability to track the storage, production, and service of food products is critical in controlling the spread
of illness.
Te need to trace and track products is not limited to food recalls and foodborne illness. Security of our food supply
has come under scrutiny since terrorist attacks in 2001. In response to potential risk to our food supply from terrorism
attacks, Congress passed the Public Health Security and Bioterrorism Preparedness and Response Act of 2002
(Bioterrorism Act) that requires all food processing businesses to track specifc information about where food was
sourced and where it was delivered, also called “one step forward, one step back.”
For these reasons, the food industry is taking a fresh look at ways to track and streamline the fow of food and
information related to food sales. Although schools are exempt from the Bioterrorism Act, it is important that school
districts receive and understand information from their suppliers that ensures the ability to trace and track products
within their own establishment. New standards for product identifcation that schools can use to improve management
of their inventory have begun to emerge from these industry eforts.
Te ability to track food products across the supply chain is at the center of modern inventory management in
school nutrition programs. Te goals of this guide are to incorporate food product tracking into standard inventory
management practices addressing cost efciencies, food safety, and efective responses to recalls, foodborne illness, and
bioterrorism. Tis will allow a more proactive approach to food tracking rather than just reacting to recalls. Te goals
of the Inventory Management and Tracking Reference Guide are to:
n identify inventory management best practices;
n provide tools for inventory management;
n introduce traceability and tracking systems; and
n advance traceability practices in school nutrition programs.
Inventory management best practices
Efective inventory control begins before products are purchased. Efective menu planning and recipe development
is the frst step in inventory management. Menu planning and recipe development should utilize a minimum of
products while providing enough variety to maximize customer satisfaction and good nutrition. Procuring, forecasting,
ordering, and receiving ensure that the right foods in the correct quantities are received just in time for production.
Storage practices keep food secure and minimize waste. Efective and efcient production and service practices
ensure that customers consistently receive desired foods freshly prepared, served in correct portions, and in a safe
environment.
Tools for inventory management
Good inventory management may require new tools to help one succeed. Tese tools can be customized to meet the
needs of your organization and will give you a quicker path to implementation of recommended best practices. Report
templates, bid language, sample standard operating procedures, checklists, and resources are included in this guide.
Introduction
5
Traceability systems
Traceability or the ability to track food items back to their original source may be a new concept for employees in
school nutrition programs. It encompasses recording delivery dates, delivery agent information, quantity, product
codes, and lot numbers for items received by the school, as well as the disposition of the product.
Traceability practices
Although schools are not currently required to keep records that would help them track food products, advancements
in product tracking made by suppliers have made product tracking more feasible for schools. Recent incidents of food
recalls also may make product tracking a high priority in order to assure the safety of foods served in schools.
Scope and overview
Te Inventory Management and Tracking Reference Guide takes a systems approach to inventory control by looking
at all functions related to inventory management from the procurement process through the service of meals. Te
individual school nutrition program is part of a large supply chain that starts at the farm and ends with consumption of
food and disposal of waste. Most school nutrition programs are at the end of this chain, but districts that supply food
to other organizations (day care or senior programs that are outside the school district) may be in the middle of the
supply chain with additional responsibility for tracking and tracing food for the organizations they serve. Te ability
to follow modern inventory management practices depends on having a supply chain point of reference because many
efective controls rely on diferent members, such as manufacturers and distributors, all along the supply chain.
Tis guide includes information about traditional inventory management practices designed for efciency and cost
control as well as newer inventory management practices such as inventory tracking required for responding to
emergencies including product recalls, foodborne illness incidents, and threats of bioterrorism. Te information is
presented in six chapters: 1) school nutrition supply chain, 2) basis of inventory control, 3) food traceability, 4) best
practices in inventory control, 5) standard operating procedures, and 6) responding to recalls and food emergencies.
Organization of information
Each chapter in this guide contains four parts:
n terminology,
n introduction and background,
n special notes for districts with warehouses and/or central kitchens, and
n tools and approaches for three levels:
n basic approaches that all can/must do,
n best practices, and
n advanced approaches or trends (e.g., use of technology).
Reading the Inventory Management and Tracking Reference Guide will give you new perspectives on inventory control
and resources to help you implement improvements in your inventory management system.
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Inventory Management and Tracking Reference Guide
CHAPTER 1: School Nutrition Supply Chain
7
C H A P T E R 1
School Nutrition Supply Chain
TERMINOLOGY
External supply chain: Members of the supply chain outside the school district including vendors, brokers,
customers, and agencies that handle products or product information.
Internal supply chain: Members of the supply chain within the school district including district-owned
warehouses, central production facilities, schools, the central school nutrition ofce, and the accounting
department that handle products or product information.
Supply chain orientation: An organization’s ability to build and maintain a culture and value system that supports
relationships with supply chain partners.
USDA Foods: Foods purchased by USDA for use in school nutrition programs.
Supply Chain Orientation
Historically, school nutrition programs have stayed within their own four walls when considering changes that make
their operation safer or more efcient. One of the most recent changes in business strategy is that businesses no longer
operate as individual entities, but rather work in partnerships across the supply chain. Although referred to as a chain,
this group of entities is better described as a system of interrelated departments, businesses, and agencies through
which products, services, and product information fow (Exhibit 1-1).
EXHIBIT 1-1 Example school nutrition supply chain
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Inventory Management and Tracking Reference Guide
In school nutrition programs, the supply chain includes internal members throughout the school district. Tese
members may include the central school nutrition ofce, school kitchens, transportation, business ofce, purchasing
department, and district warehouses. External members of the school nutrition supply chain include suppliers
(distributors, vendors, or farmers), state and federal agencies, and perhaps outside customers such as daycare or senior
centers.
Unnecessary expenses or safety hazards incurred anywhere along the supply chain will increase costs and risks to
safety for the end customer. Terefore, a modern approach to inventory management is to reduce the cost of waste and
ensure safety across the supply chain while maximizing value to school nutrition customers.
Internal Supply Chain
Internal supply chain members include any unit or functional area within the school district that shares information
or products with the school nutrition program. Tis includes functional areas within school nutrition such as menu
planning, purchasing, production, transportation, and service as well as other departments within the district that
utilize information about food and supply products such as accounts payable and purchasing. Te internal supply chain
will be diferent from district to district and may even be diferent within a single district based on the type of product
purchased.
Mapping out one’s primary internal supply chain is similar to mapping the fow of food for food safety plans and is
important when considering inventory management improvements. It is unproductive to map out the supply chain
of every product; however, it is productive to consider whether or not having multiple supply chain confgurations
is necessary, or efcient. Internal supply chains for most districts will be simple, consisting of a central ofce where
purchasing decisions are made and sites where food is directly delivered, stored, prepared, and served (Exhibit 1-2).
EXHIBIT 1-2 Example of internal school nutrition supply chain
CHAPTER 1: School Nutrition Supply Chain
9
Note for districts with warehouses or central/base kitchens: Utilizing central production and distribution
facilities adds complexity to the internal supply chain. Mapping one’s supply chain for commercial food and
supplies and USDA Foods can bring clarity to wasted steps in procurement, storage, and distribution. Include
transport vehicles going into and out of each facility when mapping the supply chain. Also note whether facilities
are managed by school nutrition or another department in the district.
External Supply Chain
Te external supply chain includes any organization that interacts directly or indirectly with school nutrition programs by:
n growing or raising raw ingredients,
n processing USDA Foods and other ingredients into fnished products,
n packaging fnished products,
n storing food or supplies, or
n delivering food or supplies.
It also includes organizations that share product information with school nutrition programs such USDA Foods
product specifcations, available USDA Foods and delivery dates from state agencies, brokers, and purchasing
cooperatives. Te supply chain may include external customers of the school nutrition program such as private day care
facilities, charter schools, summer feeding sites, or senior programs.
Similar to the internal supply chain, confguration of external supply chains will vary from district to district. Te
school nutrition supply chain is complex in large part due to the number of agencies involved with procuring, ordering,
processing, storing, and delivering both commercial foods and USDA Foods. Even when the fow of products is
relatively simplistic, the fow of information remains complex (Exhibit 1-3).
EXHIBIT 1-3 Example of external school nutrition supply chain
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Inventory Management and Tracking Reference Guide
Flow of Information
Although most people think only of the fow of food products when considering a supply chain, the fow of
information and services also is a consideration. For example, serving salad dressing manufactured with USDA Foods
requires a series of events involving many supply chain members including farmers, manufacturers, distributors,
USDA and HHS, the state distributing agency, and perhaps even a third party such as a purchasing cooperative. Te
ingredients and end product may fow only through the farmers, manufacturers, distributors, into the school district,
however, information about costs, ingredients, specifcations, and ownership will pass through many more entities
adding to the complexity of the supply chain.
Many barriers exist that impede efective communication of essential information among supply chain members
including lack of:
n shared understanding of terminology and standardized information such as product codes and other product identi-
fers,
n knowledge of what information each entity needs, and
n efcient means of transferring information.
Addressing these barriers will help reduce errors, speed the fow of information, and ultimately reduce costs while
ensuring that school nutrition programs receive the safe and high quality products they expect. Te ability to efectively
share product information is essential for traceability and modern inventory management.
CHAPTER 2: Basis of Inventory Control
11
C H A P T E R 2
Basis of Inventory Control
TERMINOLOGY
Assets: Total inventory stored in schools.
Carrying costs: Costs for transporting, handling, and storing inventory.
Inventory: Food and supplies purchased for an organization but not yet used.
Lot: Te batch or lot number that associates an item with information the manufacturer considers relevant for
traceability of the trade item (e.g., the time and date the product was manufactured).
Par (Periodic automatic replacement) Value: Te amount of product needed to fulfll menu requirements for one
ordering period plus a small amount for safety stock.
Safety Stock: A small amount of product kept on hand to accommodate an unexpected rise in customer demand
or a late delivery.
Shelf Life: Length of time a food may be stored before safety or quality is diminished.
Shrink: Loss of product due to waste, damage, spoilage, and thef.
Stockkeeping units (SKU): An item of stock that is completely specifed as to size, favor, color, recipe, and any
other attribute (e.g., two favors of gelatin are diferent SKUs).
Stockouts: Running out of a SKU when there is still demand for the item.
Role of Inventory Management
Food and supplies purchased, but not immediately used (inventories), ofen represent a signifcant portion of
operational revenue. One classic method of controlling food cost is to maintain inventory levels high enough to ensure
menu items can be produced in the right quantity, but low enough to not have excess product sitting in storage. Tis is
called inventory control.
Excess inventory can result in increased waste from foods that spoil, are pilfered, or simply wasted due to
overproduction or obsolescence. When inventory is high, it is harder to keep track of what products are on hand, more
storage space is required, money is tied up, and it is harder to control waste than when inventory is kept at low levels.
Tis is true for both raw ingredients and fnished products. Te value of waste may be tracked on production records,
or by maintaining a waste report.
On the other hand, not producing enough of each menu item, whether due to lack of raw ingredients or inadequate
forecasting, leads to customer disappointment and may violate program regulations. Te goal is to have all choices
available to students but not have excessive amounts lefover. Although the concept appears simple, it requires careful
planning, standardized procedures, and monitoring to achieve desired results.
In the past managers only needed to consider inventory control for their own facility in order to control costs. Te
age of supply chain management, however, has made school nutrition operators more aware of the cost of inventory
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Inventory Management and Tracking Reference Guide
across the supply chain and the efect it has on end costs. Producers, manufacturers, and distributors experience lower
margins and waste when anticipated sales do not materialize resulting in excess inventories of product. Tis cost is
passed along to the school district, which is why using predictable buying patterns will lower food costs to schools.
Efective inventory management can achieve several goals. Te frst is preserving food quality. Receiving the right
quantity of product shortly before products are served ensures freshness. Also, training employees to check product
codes ensures that products meet specifcations resulting in the expected quality. Other goals include:
n maintaining a high level of customer service,
n maximizing efciency,
n managing fnances,
n reducing the space and cost related to storage,
n limiting the loss in the case of recalls or disaster,
n controlling the quantities of food and supplies on-hand, and
n keeping foods safe.
Customer Service
One important aspect of good customer service is to have daily advertised menu items by controlling stockouts.
Customers are disappointed when their favorite products run out and when acceptable substitutions are not available.
Also, some customers have allergies or other dietary restrictions and their health depends on the right products being
available. Substituting a peanut oil for vegetable oil may literally mean life or death for some customers.
Good customer service also requires the delivery of product that is fresh. Although they may be safe to eat, serving
products past their use-by date call into question the quality of all products. Serving lefovers resulting from inaccurate
forecasting also erodes the perception of quality.
Finally, ofering a product mix with enough variety to maximize participation contributes to good customer service.
However, it is also important to limit variety to those products that provide sufcient sales in order to maintain
operational efciency. Making small quantities of product increases labor and reduces efciency.
Efciency
Another aspect of inventory management is efcient product handling. Te design of the facility, especially the location and
arrangement of storage areas can afect the ease with which products are delivered to production areas, as well as the security
of inventory. Designing inventory forms to match the layout of storage areas can reduce the time needed to count inventory.
Examples of practices that can be used to increase efciency include:
n reducing the number of items or stockkeeping units (SKUs) that need to be ordered, handled, and stored resulting in
decreased handling time;
n eliminating items with low volume;
n consolidating common types or styles of food such as using the same chicken patties for more than one entrée;
and
n using purchasing reports from vendors or sofware systems to determine the number of cases purchased of each item.
CHAPTER 2: Basis of Inventory Control
13
Financial Management
One of the most important goals of inventory management is improved fnancial control. Te fnancial goal of
inventory management is to ensure that the maximum value is generated from food and supply investments. In
addition to the actual cost of acquiring inventory, costs are associated with transporting and storing inventory.
Tese costs are called carrying costs and may include storage rental, utilities, insurance, cost of shrinkage, cost of
obsolescence, cost of wages and benefts for labor to move and count stock, and opportunity cost - how much more you
could have earned if the money were spent elsewhere.
Note for districts with warehouses: In order to determine if you have received products for the lowest cost, it is
important that warehouse carrying costs be calculated. A cost per case may then be calculated. Te cost per case
should be added to the price paid for each case of product to give you a total case cost. Tis cost can be compared to
the price to purchase the same item direct shipped to the school site. Te question you need to ask: Is it cheaper for
you to manage a warehouse or have a distributor manage the warehousing of food and supplies for you?
According to the National Retail Security Survey (2009), shrinkage in the U.S. is calculated at 1.5% of sales. Shrinkage
is the cost of loss due to waste, thef, spoilage, and other product loss. It is estimated that 44% of shrinkage in retail
operations is due to employee thef and 35% due to shoplifing. Te remaining 21% can be attributed to spoilage,
damage, shipping errors, misplaced product, and vendor fraud. Although there are no studies related to shrinkage in
school nutrition programs, the use of sofware for tracking perpetual inventory makes it easier to determine shrink
rate in school nutrition programs. Manual calculations are time consuming and may be difcult for most districts. No
matter what approach is used, it is important to monitor inventory in order to reduce shrinkage.
Managing Quantities
Te correct quantity of inventory is the level at which sufcient product can be produced to meet customer demands
– no more, no less. Some safety stock, a small cushion of inventory for unpredicted usage, is necessary to prevent sites
from running out of food. For many products, this may mean setting a periodic automatic replacement (par) level or
a reorder point. Par levels are usually set for items served daily such as milk, common ingredients used in multiple
recipes (e.g., sugar, four, spices), chemicals, and paper supplies. For entrees, fruits, vegetables, and bread products it is
best to project serving quantities for the week’s menu.
Common measures of inventory efciency are the number of days of inventory on hand and turnover rate. Te days of
inventory on hand and turnover rate are calculated:
Ending inventory ÷ average daily food cost = days of inventory on hand
Number of serving days ÷ days of inventory on hand = turnover rate
A school that receives a weekly delivery for most products should keep no more than 7-10 days of inventory on hand
and have a turnover rate of 2 – 3 (Pannell-Martin, 2005). Both of these metrics can help determine if a school site or
warehouse is carrying too much inventory. Setting district goals for these metrics can help site managers better manage
inventory.
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Inventory Management and Tracking Reference Guide
Food Safety
Food safety is a critical consideration in inventory management. It is very important to protect food inventories
from both unintentional and intentional contamination. Proper placement of product in storage areas can ensure
that raw products do not cross-contaminate food that will receive no further cooking as well as prevent accidental
contamination from chemicals. Standardized, HACCP-based receiving practices protect customers from products that
have not been held at proper temperatures or have been damaged during transport.
Recently, intentional contamination or food defense threats such as bioterrorism have caused the need for additional
measures. It is important to verify that food and supplies are secured throughout transit and storage. Security practices
include recording the names of individuals who handle food as well as locking and limiting access to storage areas and
transport vehicles at all times. School nutrition employees must be able to identify:
n product numbers,
n lot numbers,
n when the products were delivered, and
n from whom the product was received.
Procedures must be in place to track and record specifc food product numbers and lot numbers from the date received
to the date served to customers. A new industry-wide focus on traceability has resulted in a standard method of
product identifcation that is gaining adoption throughout the food industry. Te Global Trade Item Number (GTIN)
along with a lot number can be used in the event of a foodborne illness, recall, or terrorism threat. Tis is discussed in
depth in Chapter 3.
Note to districts with central kitchen and/or warehouses: Additional records will be required to ensure that
products transported between sites within the school district as well as to sites outside of the school district can
be tracked.
Proper storage practices ensure foods are kept safe and shelf life is maximized. Ideal storage temperatures vary based
on the type of food. Although refrigerated foods should be held between 32°F and 40°F, temperatures near 32°F may
freeze produce whereas this temperature may be ideal for meat and fsh. Products requiring colder temperatures should
be placed near the back of the cooler where temperatures are cooler. Termometers should be placed both near the
door and at the back of the cooler to adequately monitor proper holding temperatures. Keep in mind that holding
temperatures refer to the temperature of the food, not the air temperature of the cooler. Cooler air temperatures should
be 2°F below recommended product temperatures.
Interpreting product dating and shelf life can be confusing. Four types of dates may be found on product packaging
and each type has a diferent meaning:
n “Sell-By” is the last date products should be displayed for sale. Although the product may still be safe, the quality
starts to diminish once this date passes.
n “Best If Used By (or Used Before)” is peak quality date. It does not mean the product is unsafe or unft to eat beyond
this date.
n “Use-By” is the last date recommended by the manufacturer for consuming the product for best quality.
CHAPTER 2: Basis of Inventory Control
15
n “Closed or coded dates” are packing numbers used by the manufacturer. Tese may be perpetual calendar dates with
each day of the year given a consecutive number with January 1 coded as 001 or some variation of a date such as
20100615 representing June 15, 2010.
n It is not unusual for pack dates to be several months before schools receive the product due to harvest schedules.
Tese dates are not intended to be interpreted as “Use By” dates; however, they are ofen needed for recalls.
None of the four types of dating indicates that a product is unsafe to eat. Ideal food storage temperatures and shelf
life for various food products may be found in USDA Use-By Guidance, Choice Plus: A Reference Guide for Foods and
Ingredients, and USDA Foods Fact Sheets (internet links may be found under Resources).
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Inventory Management and Tracking Reference Guide
CHAPTER 3: Traceability
17
C H A P T E R 3
Traceability
TERMINOLOGY
Application Identifers (AIs): A section of a GS1 Data Bar Expanded or GS1-128 bar code found on product
packaging enclosed in parentheses used to identify additional information such as weight, count, lot numbers,
country of origin, and production date (GS1, 2009 February).
Adulterated: A product that has been contaminated with a foreign substance causing it to be unsafe for usage.
Brown box USDA Foods: USDA Foods labeled with plain USDA labels instead of a commercial label. Te name
originated from the brown shipping boxes used to ship these products.
Critical tracking event (CTE): A point at which a product is moved between sites, a product is transformed, or
any point where a record is required in order to trace a product.
Efcient Foodservice Response (EFR): A voluntary initiative where members of the foodservice supply chain
studied methods to eliminate waste and excess cost from the foodservice supply chain.
Global Data Synchronization Network (GDSN): An internet-based network of interrelated databases containing
product information and the GS1 Global Registry that allows companies to exchange standardized and
synchronized information with their trading partners.
Global Location Number (GLN): Te GS1 Identifcation Key used to identify physical locations such as a
manufacturing plant or legal entities such as the manufacturer’s corporate ofce. Te 13-digit key is comprised of a
GS1 Company Prefx, Location Reference, and Check Digit (GS1, 2009 February).
Global Trade Item Numbers (GTIN): Te GS1 Identifcation Key used to identify products such as a specifc
brand, unit of measure, and product code. Te key is comprised, at a minimum, of a GS1 or GS1 US UPC
company prefx and an item identifcation number (GS1, 2009 February).
Radio Frequency Identifcation Tag (RFID): An electronic tag encoded with an Electronic Product Code (EPC)
used to identify products within a supply chain. Te 14-digit GTIN number was designed so that it could be used
as an EPC code in RFID tags.
Universal Product Codes (UPC): A bar code with a 12-digit GTIN used to uniquely identify a product and the
company that owns the product brand.
Current Climate
Since the terrorist attacks in 2001, the ability to track the source of foods and the hands that products have passed
through on the way to consumers has been a concern. Te vulnerability of the food supply provides opportunities
for intentional contamination of food. In the last few years, the need to track food has intensifed due to large-scale
recalls of products such as beef and peanuts. Te need to identify the source of foodborne illness and reduce the risks
associated with contamination, improper labeling, and product tampering are making traceability an emerging issue.
Te agriculture and food industries are linked through traceability. Take the example of a school that receives ground beef. Is
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Inventory Management and Tracking Reference Guide
it beyond the realm of reality to expect that the ground beef could be traced back to a specifc herd of cattle or even a specifc
animal within 48 hours? We may be closer to this reality than you think! Technology provides the capability to identify and
track animals as they are transported from their origin, through processing, and delivery to school nutrition operations.
What is Traceability?
Traceability is the ability to track a specifc food within the supply chain, ideally from “farm to fork”. It requires keeping
sufcient records within each establishment that grows, processes, or handles food throughout the supply chain to be
able to trace back from any point where the food originated or trace forward to fnd who purchased the product. Tis
capability requires that each member of the supply chain keeps a detailed record of cases of product they purchase, as
well as cases of product that they sell.
In order to implement traceability, organizations across the supply chain need to be able to identify food items, capture the
information accurately, and share the information with other supply chain partners. Tis activity requires standards for all
three functions. First, all supply chain members must be able to identify products using a common description or number
such as Global Trade Item Number (GTIN). Ten information needs to be accurately captured in a standard format that
identifes the type of data to collect. Finally, this information needs to be stored in a manner that it may be shared with others,
for example, a comma delimited fle, spreadsheet, or database. A good example of standardization used for electronic transfer
of information may be found on the Produce Traceability Initiative (PTI) website listed in the resource section of this guide.
Federal Oversight Priorities
At the federal level, the Department of Health and Human Services (HHS) and the Department of Agriculture (USDA)
share food safety responsibilities through various agencies within their departments. Te Environmental Protection
Agency (EPA) provides oversight for the public water systems. Te Department of Homeland Security (DHS) becomes
involved if terrorism is suspected. Te Department of Defense (DOD) could be called if an incident occurred in a DOD
school or if the DOD fresh produce program were involved. Unprecedented communication and cooperation among
these agencies has occurred over the past few years as the vulnerability of our food supply has been questioned.
Te Food and Drug Administration (FDA) of HHS and USDA’s Food Safety and Inspection Service (FSIS) have
responsibility for regulating the U.S. food supply to keep food safe. FSIS is responsible for inspecting and regulating
meats, poultry, egg products, and catfsh and FDA is responsible for all other food products. In addition, there are
many state and local agencies that also inspect and regulate food processing. Any of these agencies may determine that
a product has been contaminated or adulterated and request that the manufacturer initiate a recall, however, FDA has
the power to require a food product recall if eforts to get the manufacturer to issue a voluntary recall are unsuccessful.
In the event of a problem that involves USDA Foods, these agencies involve the Food and Nutrition Service (FNS),
the Agriculture Marketing Service (AMS), or the Farm Service Agency (FSA) to help determine if USDA Foods are
involved either through the brown box program or a national processing agreement. If it is suspected that USDA Foods
may be involved in a recall, the state distributing agencies are contacted by FNS because they are the initial recipients
of these products. Te state distributing agency will then contact the recipient agencies that received the product. DOD
may also be involved in the recall if produce they purchased is recalled.
Although several industry initiatives, such as the Foodservice GS1 US Standards Initiative, Produce Traceability
Initiative, and the mpXML Group (Meat and Poultry), are underway to improve food traceability, FDA and FSIS do not
have the power to enforce expanded traceability. Both agencies are actively involved in voluntary traceability initiatives
as well as new tracking policy legislation included in the Food Safety Modernization Act of 2010 (FSMA) that requires
CHAPTER 3: Traceability
19
FDA, in consultation with USDA, to establish a product tracking system to rapidly track and trace food that is in the
United States.
Te Bioterrorism Act of 2002 requires any company that manufactures, processes, distributes, receives, holds, or
imports food products to keep records on the source of food and the recipients of food from their establishment. Tis is
ofen referred to as “one step back, one step forward” because the company goes one link back in the supply chain and
one link forward. When there is reasonable belief that food is adulterated, companies are required to allow FDA and
FSIS access to these records within 24 hours if requested. Non-proft food establishments are exempt from establishing
new records, but still must produce existing records when requested.
Although companies may comply with the “one step forward, one step back” provision of the Bioterrorism Act,
governmental agencies coordinate the tracing in the event of an incident such as a foodborne illness outbreak. If we
do not enable these agencies to do their jobs efectively, then more people may be exposed to foodborne illness. If
everyone has diferent information tied to the product, or if information is not consistently stored in their systems,
the tracking done by the government agency will be protracted due to inconsistent information, inconsistent record
keeping, manual records, and proprietary standards. Te longer it takes an agency to perform trace back, the larger and
broader the recall becomes. Tis means that it is not only important to capture information associated with product
tracking it must be stored in a manner that makes it easy to share with other members of the supply chain.
Voluntary Initiatives
For over 40 years food companies have standardized product identifcation in the grocery industry by using Universal
Product Codes (UPC). Tis practice has led to greater efciency in the grocery industry. Hoping to achieve similar
results in the foodservice sector, several industry groups representing manufacturers, distributors, and restaurants
began an initiative called Efcient Foodservice Response (EFR) for the purpose of educating supply chain members in
traceability for the purpose of improving efciency. Teir eforts led to the voluntary adoption of GS 1 GTIN for food
products and Global Location Numbers (GLN) to identify company locations. Te use of GLNs help with traceability
eforts by identifying the precise location where products originated and also where they have been shipped.
Today the Foodservice GS 1 U.S. Standards Initiative (Foodservice Initiative), endorsed by most industry groups
representing food manufacturers, distributors, and school nutrition operators strives for GTIN numbers to be placed
on cases of product and in buying guides by 2011. Although the 12-digit UPCs are a GTIN, food manufacturers are
standardizing on a 14-digit GTIN commonly found on cases that can be captured electronically through bar codes
and radio frequency identifcation (RFID) tags. Te 14-digit GTIN, when used with application identifers (AIs) in bar
codes such as the GS1-128, can also track product information such as the lot, country of origin, use-by dates, and net
weight making the number much more versatile and useful.
Recalls have hit the fresh produce industry especially hard with growers and processors losing millions of dollars from
disposal of products later found not to be involved with food safety issues. In 2008, tomatoes were thought to be the
source of a Salmonella Saint Paul outbreak that sickened over 1,400 people. Although each company had records available
to trace tomatoes back to the feld, the lack of compatible electronic records slowed the process resulting in several months
of wasted time before FDA realized that no common source existed to implicate tomatoes. Motivated by these losses,
industry traceability initiatives such as the PTI have accelerated from obscurity to mainstream as fresh produce packers
who are PTI members prepare to label all produce cases with a scanable GTIN plus lot or batch number by 2011.
mpXML, a group of leading meat and poultry suppliers and retailers, is also using the GS1 standards used by both
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Inventory Management and Tracking Reference Guide
the PTI and the Foodservice Initiative. All three groups have taken voluntary steps toward identifying products at the
case level using GTIN plus lot numbers and GS1-128 bar codes. Te mpXML and PTI have already adopted standards
for cases and pallets using the GS1-128 bar code and the Foodservice Initiative is expected to do so as well. Te goals
for all three initiatives are to minimize waste in the supply chain, improve product information for customers, and
establish a foundation for improving food safety and traceability.
Legislation
Te Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (Bioterrorism Act) brought
new focus on the ability to trace all foods sold in the U.S. from the source to the end user. Tis act standardized the
information that was to be kept including product and lot numbers, date of delivery/date of shipment, and the names
of those who came in contact with the food item. Although this provided data needed to trace products, each company
had the option of storing the data in any form that was convenient such as on invoices or other paper formats as well as
electronically. Although each company could trace products it received or shipped, lack of a common data format and
electronic means of sharing the information slowed traceability eforts.
More recently, the Food Safety Modernization Act of 2010 further strengthens the efort to track foods by requiring
FDA to establish a food tracking system to improve the ability to track and trace food products rapidly. Although
provisions of this law generally do not pertain to meat, poultry, and egg products, the Secretary of Agriculture stated
the Administration is reviewing the Federal Meat Inspection Act and that it is possible that food safety reforms adopted
by FDA may also be proposed and adopted by USDA and approved by the next Congress.
Bene?ts
Te biggest beneft from incorporating traceability in schools is cost savings. When recalls occur, products from the
same manufacturers or with the same ingredients unrelated to the recall are ofen pulled or destroyed “just to be safe.”
When students and other customers perceive a problem with a recalled food type, they ofen will not buy any product
similar to the recalled item. When this boomerang efect occurs, millions of dollars of food is unnecessarily removed
from the food supply and ultimately the costs are passed along to the schools and other establishments. If schools are
specifc about which foods are involved in a recall, react quickly to recall notices, and provide assurances about the
safety of related products, damage and costs are reduced.
Additional savings come from greater efciency. When coupled with technology such as bar code readers, the scanning
of GTIN numbers can potentially save money on tasks related to ordering, inventory, and receiving. One study conducted
by A.T. Kearney (International Food Distributors Association [IFDA], 2006) found that retailers reduced inventory by .5 -
1.0%, stockouts by 2 - 4%, and reconciliation errors (e.g., invoice discrepancies) by 5 - 10% when using bar code readers.
Scanning bar codes requires inventory and ordering sofware with the ability to store GTIN numbers for a case or
purchase unit. For complete traceability, sofware also needs the capability of storing lot numbers for each case of
product received. A hand held scanner that is capable of reading GS1-128 or GS1 ITF-14 bar codes is also required.
Tese bar codes are described later in this chapter under Item Identifcation. Te database used by the sofware must be
capable of exporting data in forms (e.g., comma delimited fle) that can be shared with supply chain partners.
Scanning products during the receiving process will not only record the product codes and lot numbers but provides
the ability to check these numbers against purchase orders to ensure that the correct products were delivered. Scanning
bar codes when taking inventory eliminates manual data entry required when a spreadsheet or sofware is used alone.
CHAPTER 3: Traceability
21
Even paying invoices can be automated when accounting departments are equipped to electronically share information
about received products rather than entering invoices into fnancial systems for payment. Scanning product codes
increases both accuracy and efciency.
In addition to food safety and efciency, the ability to trace foods also ensures that attributes such as organic, locally
grown, country of origin, genetically modifed foods (GMO), allergen-free, and other qualities that are impossible for
consumers to detect from examining products are delivered as specifed. Manufacturers are beginning to populate the
Global Data Synchronization Network (GDSN) with this type of information in order to electronically synchronize
standardized product information with their sales agents, brokers, distributors, and ultimately with operators such as
those in school nutrition programs. Te GDSN is a network of data pools containing item, location, and price information
from trading partners subscribing to the network using standardized information such as GLNs and GTINs.
Major food manufacturers are beginning to populate GDSN with pack size, nutrition information, allergens, and other
information ofen required by schools. When schools show an interest in using the GDSN, it will raise the priority
for manufacturers to populate the database with school products. Because schools are customers of the organizations
implementing these traceability initiatives, they are well positioned to take advantage of these eforts.
Barriers
Because electronic tracking is new to schools, the initial costs may be higher than some school districts can aford. It is also
typical that early adopters of technology may have to deal with imperfect sofware and other glitches. It may not be for everyone.
In order to take advantage of scanning, the school district would need to invest in both hardware (e.g., scanners) and
sofware that can store and share product numbers. Vendors currently providing ordering and inventory sofware to
schools may not have the ability to scan bar codes making it difcult to implement electronic tracking. Funding for
such purchases may be justifed based on potential cost savings, especially in larger school districts.
Although there are many manufacturers and distributors that have already begun using GTIN numbers on cases of
food products, there may be many others who have not yet taken that step. School personnel may fnd it frustrating to
continue using manual systems for products from certain vendors when other vendors are using GTIN numbers.
Get Ready For the Future
Te Foodservice GS1 US Standards Initiative has set goals for participating manufacturers to communicate product
information to the GDSN and for distributors to scan GTINs and lot numbers on all outbound cases by 2012. Tis
will enable operators to begin receiving product information electronically and scanning inbound cases from industry
partners participating in the Foodservice GS1 US Standards Initiative shortly thereafer. Companies currently
participating in this initiative are listed on the Foodservice GS1 US Standards Initiative webpage. Te link for the
webpage is listed in the resources section of this guide.
Preparing to participate in this initiative will require following inventory management best practices described in this
guide as well as preparing for the electronic exchange of information with industry partners. Implementing business
practices that standardize product information and ensures product tracking within the school district is the frst step
in preparing for electronic data sharing.
To prepare for electronic information exchange through the GDSN, school districts should:
1. Specify that vendors include GTINs on product cases;
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Inventory Management and Tracking Reference Guide
2. specify that vendors include GLNs on shipping documents, and invoices;
3. select sofware vendors that store GLNs and GTINs in their system and have interoperability with GDSN-certifed
data pools;
4. select scanning hardware that can read GS1-128 and IFT-14 bar codes;
5. obtain GLNs for school district and each location receiving products or product information.
In order to assign GLNs for each location, frst contact GS1 customer service to obtain a company prefx. Next, assign location
numbers to each location that will either receive products or product information such as schools, accounts payable, and
warehouse. Te company-prefx and location number together comprise the GLN. Each school district should be identifed
by only one company prefx so it is important to communicate with school district administration to coordinate the eforts
of diferent school district departments to avoid duplication. Although there is a small annual subscription fee for each GLN
number, larger districts may fnd it less expensive to annually subscribe for a company prefx and then assign their own GLNs.
Item Identi?cation
Te basic requirement for manual or electronic traceability is the ability to accurately identify products. If using an electronic
tracking system such as bar coding, a 14-digit GTIN plus lot number is the most common method of identifying products.
Manual systems will use a variety of case coding depending on the manufacturer. For food recalls, additional information must
be gathered for the batch or lot regardless of the type of tracking system used. Even if an electronic system is implemented, not all
manufacturers have adopted GTINs so a combination of automated and manual processes will be needed.
Manual case markings will be diferent depending on the type of food product. Meat, poultry, and egg products will
have an establishment number located inside the USDA inspection seal (Exhibit 3-1). Te package will have a lot or
batch number or “use-by date” that identifes when a product was manufactured.
EXHIBIT 3-1 Examples of common case markings
Establishment
number
Lot
number
GTIN
Number
Lot
number
CHAPTER 3: Traceability
23
Once an operator learns to read and understand bar code numbers, these numbers may also aid in product identifca-
tion. Products manufactured by companies that have adopted GTINs will have a 14-digit number and bar code on the
case as shown in Exhibit 3-3. One digit will diferentiate the packaging levels, one is a placeholder, and twelve digits will
represent the unique company prefx and item reference number (Exhibit 3-2). A GS1 Company Prefx (identifer) can
vary from six to nine digits; the length of the Company Prefx determines the number of digits a company has available
for its Item Reference numbers; the shorter the prefx; the more Item Reference numbers that are available for use. Te
fnal digit is a check digit that is used to ensure the product scanned correctly.
EXHIBIT 3-2 GTIN coding scheme
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Indicator
Code
Placeholder Company
Pre?x
Item
Reference
Check
digit
Indicator codes will be zero (0) if inner packages have diferent item reference numbers and one (1) when the case and
item references are the same. When the indicator code is 0, school operators need to be aware that inner packs will not
have the same item reference number as the case or shipping container and extra care will need to be taken to ensure
that correct item references are recorded. An indicator code of nine (9) represents a product with a variable weight
(e.g., turkey ham where each ham has a diferent weight).
Manufacturers choosing to use a GS1-128 barcode have the option to add a lot number next to the GTIN (Exhibit 3-3).
Manufacturers also have the option to add net weight and other information by stringing along additional numbers
identifed by application identifers (AIs) (Exhibit 3-4). Application identifers have the potential to provide school
districts with more accurate information about country of origin and other attributes.
EXHIBIT 3-3 Examples of Global Trade Item Numbers
GS1 ITF-14 Barcode
Inside packages will have
the same item reference
numbers.
GS1-128 Barcode
with application identi?ers.
This one shows a lot number
of 10036.
GS1 ITF-14 Barcode
Inside packages will have
diferent item reference
number.
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Inventory Management and Tracking Reference Guide
EXHIBIT 3-4 Common Application Identi?ers
AI TITLE
01 Global Trade Item Number
10 Batch or lot number
11 Production date (YYMMDD)
15 Minimum durability date or “sell-by” (YYMMDD)
17 Maximum durability date or “use-by” (YYMMDD)
30 Variable count
320
Net weight (lb), n = decimal placement
422 Country of origin
School nutrition personnel need to be able to identify products for a variety of reasons. Subtle diferences in products
can afect pricing, nutritional integrity, and compliance with school nutrition regulations, or the food product may
contain allergens that can be harmful to afected customers.
When products are purchased, the product number or GTIN and any acceptable substitutions must be available to
personnel receiving deliveries to ensure that products ordered are the ones received. Cooks and production employees
also need to read product codes to make certain that prepared products match production records and recipes. In the
event of a foodborne illness, school records must be sufcient to track products served on specifc dates, and meals to
ingredients and sources. When recalls occur, specifc products must be identifed as to date received, used, disposed of,
or sequestered.
Voluntary Standards
Some school districts are addressing organizational quality by adopting standards such as International Organization
for Standardization (ISO) standards and Safe Quality Food Institute (SQF) standards or including these standards as
requirements for vendors in bid documents.
Note for district with centralized production: Although ISO and SQF standards will beneft all school nutrition
programs, districts that operate centralized food production facilities may have the greatest beneft due to the
increased risk when producing a large volume of meals in one facility.
ISO standards are available for many diferent types of organizations, including school districts, and a variety of
processes including ISO 22000:2005, food safety management systems. ISO defnes standard operating procedures,
monitoring systems, adequate recordkeeping, corrective actions, and feedback mechanisms to ensure procedures
are efective. Tis process is very similar to food safety plans based on Hazard Analysis and Critical Control Point
(HACCP) recently added to National School Lunch Program regulations.
CHAPTER 3: Traceability
25
Companies may elect to be ISO or SQF certifed by adopting these standards and participating in periodic audits,
however, you do not need to become ISO or SQF certifed to implement standards that will improve program quality.
Both ISO 22000:2005 and SQF 2000 include traceability standards for food products requiring product codes and lot or
batch numbers to be recorded throughout internal processes as well as among supply chain members.
Critical Tracking Events and Recordkeeping
A critical tracking event (CTE) is a point at which a product is moved between sites, a product is transformed, or any
point where a record is required in order to trace a product. In a school nutrition program where all food is delivered
directly to a school site for production and service, CTEs would include the point at which a product is received, the
point at which the product is used in food production, and the point at which the product is served, stored, or thrown
out. If the product is stored as a lefover, two additional CTEs occur for reheating and serving or disposal. CTEs will be
marked in this document with to indicate a process when critical information about the product must be recorded.
Te ability to trace products depends on the ability to capture data about the product at each CTE point. Data that
must be captured include date, location(s), product code, quantity, and lot number. Te manner in which data
are stored is up to the school district. At a minimum, schools need to record sufcient information on invoices or
receiving documents and production records. Programs with more complex delivery and production methods will
have more CTEs.
Note to districts with warehouses and/or central kitchens: When food is shipped from one location to another,
such as between schools or centralized storage or production facilities, additional recordkeeping is necessary.
Data need to be recorded for each shipment received as well as each shipment out of the facility.
Internal and External Traceability
Internal traceability refers to processes within a school when data should be collected in order to trace a product,
including transforming the product into a fnished product. Processes such as cooking, serving, and disposal or
destruction of the product are all considered internal traceability processes.
External traceability refers to a physical exchange of product between two supply chain members such as a distributor,
a state USDA Foods warehouse, or a contracted receiving site such as a day care and one or more locations within
the school district. It also refers to transfers within a district when products are shipped from a warehouse or central
kitchen to a school or between schools.
Te source location must provide the recipient with at least one identifcation number such as the GTIN and the
recipient must keep this identifcation attached to the item until the product is used or destroyed.
Best Practice: Use GLNs and GTINs on all purchase orders. Require vendors to use GTINs on advance shipping
documents and GLN and GTINs with lot numbers for their products on all invoices. Internal shipping documents and
production records should also use GTIN and lot numbers for items produced and/or shipped within the district and
to entities outside of the district.
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Inventory Management and Tracking Reference Guide
Role of Technology
GTIN numbers are designed so that they can be encoded into bar codes or electronic product codes (EPC) such as
radio frequency identifcation (RFID) tags in order to be read by electronic data capture devices such as scanners.
RFID is a technology that shows great promise but it is not readily available for school nutrition application and is too
expensive to consider for school districts at this time.
On the other hand, bar code technology is relatively inexpensive, bar codes are encoded at the case level for most food
products, and scanners with the ability to read all GS1 and other bar codes are readily available. Ideally sofware already
in use by school nutrition programs for ordering, receiving, inventory control, production, and point-of-sale will
incorporate tracking capabilities enabling schools to capture GTIN and lot numbers.
Reports from these systems should summarize the disposition of a given product code and lot number, by location,
within a specifed date range including the ability to be exported electronically for submission to a state agency in the
event of a USDA Foods recall or to FDA or other authorities in the event of a commercial recall, foodborne illness, or
bioterrorism event.
Te cost efectiveness and efciency of such a system will depend on the complexity and size of the school nutrition
program. In a small district where food is primarily delivered to each location, manual systems will sufce as data
can be gathered, reviewed, summarized, and reported to the requesting agency quickly. In larger or more complex
programs where data are collected at many processing points and locations, an electronic means for collecting and
reporting data may become essential in order to provide full traceability.
Electronic capture of the GTIN plus lot numbers is more efcient than tracking lot numbers manually. Products may
be scanned when they:
n arrive from vendors,
n are placed in or removed from storage,
n are shipped to other buildings, and
n are discarded.
When selecting sofware vendors, ensure the sofware can provide reports fltered for a given GTIN and lot number
and sorted by location and date.
CHAPTER 4: Best Practices in Inventory Control
27
C H A P T E R 4
Best Practices in Inventory Control
TERMINOLOGY
Batch Cooking: Preparing smaller quantities of food as needed throughout the serving period rather than
preparing the total quantity needed at one time.
Cycle Menu: Menus that are repeated over a specifed period of time.
Cycle Counts: Physical count of a small group of randomly selected products on a periodic basis. Typically used in
high volume operations when a monthly physical inventory may not be possible.
Indirect Discount: Applying a discount for the fair market value of USDA Foods on processed products on the
invoice; also referred to as “net of invoice”.
Par Value: Te amount of product needed to fulfll menu requirements for one ordering period plus a small
amount for safety stock.
Perpetual Inventory: Continuous recording of all receipts and issues of products in storage providing a balance of
each item at all times.
Physical Inventory: Periodic actual count of products in storage areas.
Single Inventory Method: Maintenance of a single inventory for food and supplies, including USDA Foods.
Standard Operating Procedure (SOP): Detailed written instructions for a process that must be followed to ensure
a desired outcome.
School nutrition programs across the country have diferent methods of achieving the same goal: serving nutritious,
cost-efective meals students will enjoy. Some methods, however, stand out as “best practices” or procedures that when
followed achieve consistent high quality results. Tis chapter identifes “best practices” that are related to inventory
management and product tracking.
Typically, inventory management is addressed as a function or discrete set of tasks. In this chapter we approach
inventory management from a systemic or holistic view looking at the impact each function in the school nutrition
program has on the management of inventory. Inventory management ensures that quality, cost efective products are
available in the right quantities at the right time.
Similar to strategies used in Efcient Foodservice Response (EFR) initiatives to take advantage of supply chain
management and inventory management efciencies, it is important to:
n assemble a cross-functional team including representatives from purchasing, operations, accounting, and technology;
n educate the team on how inventory management is afected by each department;
n develop a plan with a vision for improving management of inventory to improve cost, efciency, traceability, and
safety; and
n develop metrics (e.g., food cost, inventory turns) that may be used to benchmark starting points and measure progress.
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Inventory Management and Tracking Reference Guide
Menu Planning
Menu planning is the underpinning of inventory control because the menu establishes what items are needed and how
frequently they are going to be used. Efective menu planning requires considerable planning and skill to ensure that
menus are cost efective, popular with customers, and meet nutrition and program guidelines. It is unlikely that menus
planned monthly by each site manager efectively control inventory.
Using a central cycle menu controls inventory by making the items and quantity needed predictable. When the same
items served together are repeated, a pattern emerges that, during each cycle, can be used to predict what customers
will purchase. Tis allows managers to improve ordering forecasts. Remember that the menu consists of more than
reimbursable meals. A la carte oferings are part of the menu and also should be carefully planned. Timing of menu
planning also can afect pricing.
When menus are planned before bids are developed, bid quantities may be forecasted with more certainty. Vendors
that can count on accurate bid quantities are more likely to ofer volume price discounts. If complete menus cannot
be planned in advance, determine the number of times each menu item will be ofered during the bid period and later
plan menus meeting these guidelines.
A sofware program can facilitate forecasting by using the sales and production history from previous menu cycles.
Te number of cycles to review depends on the participation trends of the school. If participation is rising, the history
from the last serving date may be all that is needed. If participation is holding steady, review the last two or three menu
cycles and forecast using the highest fgure.
Procurement
Efective procurement afects inventory control by obtaining the right items in the correct quantity for the best value.
Once menus are planned, a list of items to purchase can be developed so that only items planning to be served are
purchased. USDA (1998) found that schools carried an average of over 800 SKUs. Reducing the number of SKUs
reduces the time it takes to specify, order, receive, track, store, and inventory items.
A SKU is a discrete item with the same characteristic (e.g., juice purchased in fve favors represents fve separate
SKUs). Each SKU will have its own GTIN. For tracking of items during a recall it is helpful to have fewer SKUs of a
certain item when trying to account for the status of all recalled product.
Reviewing menus and recipes to utilize the same SKU for more than one menu item will make inventory control
simpler and reduce costs. Also, reviewing production or sales records can identify items with low sales so those items
may be eliminated. Selling less than 25 units of an item or favor of any SKU is probably not worth the time it takes to
order, store, and sell it. In large schools the cut of may be 50 sales for a given SKU.
Although food and supply specifcations may be written so that more than one product is acceptable to bid, once
the purchasing decision has been made only the selected product code should be purchased. When substitutions are
needed, an appropriate product code substitution should be approved in advance by someone at the central ofce and
clearly communicated to receiving agents. Product substitutions may lead to a variety of problems including:
n reduced quality,
n non-compliance with regulations,
n increased costs,
CHAPTER 4: Best Practices in Inventory Control
29
n non-compliance with nutritional guidelines, and
n loss of customer satisfaction.
Managing suppliers is also part of inventory management. Clearly identifying vendor requirements in bid documents
ensures that your food safety eforts will not be undermined by faulty vendor practices. Adding language to bid
documents such as requiring Good Manufacturing Practices (GMP), Good Agriculture Practices (GAP), and Good
Handling Practices (GHP) for produce and Farm to School procurement, and requiring HACCP plans and traceability
requirements found in SQF2000 or ISO certifcation can ensure product safety (see Appendix).
Forecasting and Ordering
Forecasting and order can greatly afect inventory control. When forecasting is not accurate and products are ordered
in excess:
n too much money is tied up in inventory, which reduces cash fow;
n there is more opportunity for spoilage;
n the incidence of thef is increased;
n more products become obsolete; and
n the quality of products deteriorate overtime.
Problems, such as stockouts and emergency buying, result from under ordering. Both conditions result in not getting
maximum value from inventory.
Predictability improves inventory control across the supply chain giving manufacturers the opportunity to lower costs
by producing only the quantity of products actually needed by end users and helping distributors stock sufcient
quantities of product without overstocking. When schools order larger quantities or diferent products than vendors
expect, items may be out of stock.
Several practices help reduce the out of stock conditions:
n planning cycle menus,
n ordering based on menus,
n sharing menus and expected order quantities with vendors in advance,
n minimizing menu substitutions, and
n maintaining a low inventory of menu items so ordering refects usage.
An ordering system should be established to prevent over ordering. A par value system establishes a maximum
quantity to keep on-hand. Te par value is the amount needed to fulfll menu requirements for one ordering period,
usually one week, plus a small amount for safety stock. Other factors to consider when setting par values include:
n storage space,
n frequency of deliveries,
n vendor minimum orders, and
n value of product ( e.g., higher cost products should be ordered close to the time of use).
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Inventory Management and Tracking Reference Guide
Accurately forecasting orders is not a simple task. Managers should not be required to place an order while another
order is incomplete. Requiring managers to place weekly orders more than a few of days in advance may result in
incorrect ordering.
When orders are placed, the quantity of product to be ordered is the amount needed to bring inventory back to the
maximum or par level. If an item is served more than once between delivery periods you must also consider how much
will be used before the order is received. Inventory should be checked prior to placing the order and subtracted from
the total quantity needed. A par stock method works well for items where consistent amounts are used each week or
order period (see Exhibit 4-1). Par values need to be monitored throughout the year and adjusted when menus and
participation change.
EXHIBIT 4-1. Determining Order Quantity
PRODUCT/GTIN FREQUENCY PAR (MAX) COMMITTED (+) INVENTORY (-) ORDER QTY
# 10012345000017
Peaches
6 cns/cs
Weekly 10 cases 2 cases 1 case 11 cases
# 10012345000021
Trays
10 pkg/cs
Weekly 20 cases 12 cases 12 cases 20 cases
# 10012345456784
Detergent
4 gal/cs
Monthly 2 cases 1 case 1 case 2 cases
# 10123457890006
Chicken Patties
120/cs
Menu 5 cases 0 2 case 3 cases
Ordering based on menus is another alternative. Order guides are designed to match weekly menus. Ordering by menu
still requires that you establish the amount you would need to fulfll the menu plus a small extra amount for safety
stock. You still consider the amount committed before the order arrives, and the amount currently on inventory. Te
only diference is the item would not be ordered until right before it is on the menu.
Te same ordering system may be used when ordering USDA Foods. Te delivery periods may be the same as for
commercial products or longer depending on whether or not your state participates in an indirect discount or “net of
invoice” program, receives a commercial delivery by a distributor, receives deliveries to a district-operated warehouse,
or receives monthly deliveries directly at the school site.
Receiving
Te receiving process ensures that you receive specifed products that were ordered, in correct quantities, safe, and at
the best quality. Receiving is a very important function of inventory control and its value is ofen overlooked. Efective
receiving requires a well-trained employee and the following resources:
n standard operating procedure (SOP) for receiving food and supplies,
n item specifcations including product code or GTIN numbers,
n orders and/or receiving documents,
n thermometers for checking temperatures of TCS products,
n markers or date stamp, pens, pencils, wire snips, and clipboard,
CHAPTER 4: Best Practices in Inventory Control
31
n wire cutters for breaking seals on USDA Foods deliveries,
n hand trucks, carts, or dollies to move food to storage areas, and
n scales to weigh products sold by weight.
Deliveries should be scheduled so that the receiving agent has time to check food items thoroughly and store products
immediately. Deliveries should not be accepted before trained employees are available to receive them. Deliveries made
before school opens or afer staf has lef for the day must be avoided.
Receiving agents should be familiar with expected deliveries so that the receiving process can move as quickly as
possible. Tere are several steps to the receiving process:
n check that deliveries arrive in a clean truck that is capable of maintaining food at correct temperatures and securing
product from tampering during delivery;
n identify the driver if he/she is not familiar to the receiving agent by requesting an ID and recording the driver’s name
on a receiving log;
n check in products by category examining and storing refrigerated items frst, then frozen items, and dry goods last;
n check the product code or GTIN to ensure that the correct product is received and record on the invoice ;
n check each case for quality such as damage to container, wilting or spoilage, and out-of-date products and obtain a
credit receipt for rejected products,
n weigh items sold by weight;
n count and check all cases against orders or receiving reports;
n compare invoices to orders, check prices and extensions, note changes, and obtain credit memos;
n check items that were substituted against approved substitution list; and
n stamp or mark all products with a receiving date.
Using sofware for ordering and receiving helps ensure the correct product is received at the right price. Once products
are entered into the sofware database, only products identifed for each site may be ordered. Orders are automatically
converted to receiving screens once orders are approved, allowing receipt of only the desired products.
Storage and Issuing
Secure, efcient, and safe storage are key elements of inventory control. Tis begins with well designed, equipped, and
secured storage areas, proper placement of food and supplies, and employees trained in proper storage and issuing
processes.
Security is critical to protect foods from thef and intentional contamination or bioterrorism. Since the terrorist actions
of 9/11/2001, threats to the security of food have been re-examined. Purposeful contamination of our food and water
supply has been identifed as potential sof-targets requiring special means of protection. Security of food items should
include:
n keep all storage areas and outside access doors locked at all times,
n control keys, establish a policy for securing keys in a locked safe or cabinet, and sign keys in and out to those who do
not need routine access,
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Inventory Management and Tracking Reference Guide
n issue keys only to those employees who need access,
n collect keys immediately from employees who have been fred or resign,
n restrict kitchen access to school nutrition personnel,
n enforce policies requiring visitors to check in at school ofces, and
n provide lockers for employees to store bags, purses, and other personal items.
Install security cameras by access doors to the establishment and to all storage areas. Post signs to warn employees and
visitors that premises are monitored. Keyless entry systems, otherwise known as key cards, eliminate the need for keys,
can be reprogrammed when personnel change, and can leave an audit trail of who has gained access to storage areas.
Efcient storage layout can save time and maintain safety and security. Because National School Lunch regulations
permit a single inventory method, USDA Foods and commercial foods do not need to be stored separately. Here are
some tips for designing storage areas (see Exhibit 4-2):
n use mobile shelving with adjustable shelf heights, dunnage racks, and dollies rather than stationary shelving,
n place high use products near the door for easy access,
n keep products in original cases, unless pest infestation is a problem, so that information needed for traceability re-
mains intact,
n place products in storage areas in the order of inventory forms or a “sheet to shelf ” numbering system to label shelv-
ing and assign products to specifc locations then print inventory worksheets using the same order,
n place foods that will receive no further cooking on shelves above raw foods that will be cooked, with lowest safe
cooking temperatures placed above items requiring higher cooking temperatures,
n store chemicals away from food and paper supplies, in a separate locked section of storage area away from food to
protect food and supplies from contamination,
n store the heaviest containers near entry on lower shelves, dollies, or dunnage racks to reduce the chance of injuries
when moving product, and
n place expensive products in locked racks or away from easy access to exits.
EXHIBIT 4-2 Example of proper placement of items in storage
USED INFREQUENTLY
DECORATIONS, UNIFORMS
LIGHTWEIGHT ITEMS
PAPER TRAYS, LIGHT FOODS
MEDIUM-WEIGHT ITEMS
CANS, BOTTLES, JARS
CASES, RACKS, BOXES
HEAVIEST ITEMS
SACKS, BARRELS, CRATES
CHAPTER 4: Best Practices in Inventory Control
33
Removing or issuing stock is another point where controls are needed. Allowing several diferent employees to remove
products from storage areas decreases efciency and increases potential for thef. Practice frst-in, frst out stock
rotation and train employees to check “use-by date” or delivery date to ensure older products are used frst.
Storeroom requisitions for issuing products should be used along with production records to provide an audit trail for
items used (see Exhibit 4-3). Keeping records of food in storage is a critical tracking event. Te specifc product code
number or GTIN should be listed on the requisition along with the initials of the person(s) who removed the stock. For
improved traceability, lot numbers also should be listed. Food and supplies that are delivered directly to production or
serving areas rather than storage areas, such as milk and produce, must also be recorded on a requisition. Requisitions also
can be used for completing production records. Diferent approaches can be considered for issuing stock.
All employees should review the menu and recipes a day in advance and provide a written list of items needed or a
requisition. An employee trained in issuing gathers supplies, places them on trucks or carts, checks items of the list,
and delivers to each work area. Tis method requires sufcient refrigerated storage in production areas to keep foods
at proper temperature during production. If cold storage is not available, multiple requisitions with the addition of
delivery time may be needed to accommodate batch cooking methods.
Ingredient rooms increase control of inventory by assigning to a person(s) tasks related to pulling inventory as well as
weighing and measuring all ingredients needed for the day’s production. Ingredient rooms are efective in high volume
kitchens and centralized production facilities where centralizing equipment needed to weigh and measure food can
save time and improve accuracy.
When there is a small staf or insufcient cold storage in work areas, production employees obtain products from
storage areas, write down products removed, and sign a storeroom requisition. Tis system requires that all employees
receive training in stock rotation, safe lifing, and recordkeeping.
EXHIBIT 4-3 Sample Storeroom Requisition
Storeroom Requisition Number: 129
Date: 05/06/2010
Storeroom: Dry Storage
Qty Unit Product Code Lot # Description Issued to Unit Price Total Price
1 Can 12345 3029 Tomato Paste JB $ 2.00 $ 2.00
2 Cases 23456 9909, 9908 Peaches, Canned BG $ 12.00 $ 24.00
4 Bags 34567 2000811 Macaroni JN $ 1.20 $ 4.80
Total $30.80
Inventory Control Records
Food and supplies account for 40% or more of program revenues and warrant the time it takes to keep adequate and
accurate records of products. In order to have a complete picture or audit trail of products received and used, a good
recordkeeping system needs to include menus, orders, receiving records, requisitions, production records, and point-
of-sale or serving records. Each type of record has a specifc purpose; however, collectively they lay the groundwork for
internal traceability for each food item.
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Inventory Management and Tracking Reference Guide
Perpetual Inventory
A record of food and supplies received, issued, and a running balance on hand is called a perpetual inventory. Some
states require schools to maintain perpetual inventory records. A manual perpetual inventory is time consuming and,
unless required by the state agency, for small operations may not be cost efective. A perpetual inventory can:
n provide information about current stock levels,
n serve as a tool for ordering,
n provide information for food and supply cost control,
n prevent thef, spoilage, and other shrinkage, and
n improve the ability to trace foods in the event of a recall or foodborne illness.
In perpetual inventory systems, a card or page is kept for every item that is purchased. Cards are updated daily from
receiving reports or storeroom requisitions. When a physical inventory is taken, the actual count is recorded on the
card and adjustments are recorded for diferences found between the “book” or card quantity on hand and actual
quantity on hand (see Exhibit 4-4). Having a written record of adjustments provides a tool to track shrinkage due to
thef or other discrepancies. Inventories should also be kept for USDA Foods held by distributors or processors.
EXHIBIT 4-4 Perpetual Inventory Card
Product Code: 23456 Description: Peaches, Canned Storeroom: Dry Storage
Purchase Unit: Case Issue Unit: Can
Date Req/Invoice Qty In (Purchase Unit) Qty Out (Issue Unit) Balance (Issue Unit)
5/10/10 RQ 129 12 2
5/12/10 PO 222 2 14
5/17/10 RQ 140 12 2
5/29/10 INV 1
Computer systems have made maintaining a perpetual inventory system much easier. Usually food is ordered through
the sofware program, which creates a receiving record. When food is received, inventory is updated with new
quantities and inventory values are adjusted. When food is issued or used, the inventory quantity is adjusted again.
Some systems utilize menu plans and production forecasts in order to compare the planned with the actual quantities
used. Finally, a periodic physical inventory is taken and recorded to keep the inventory system accurate and to identify
discrepancies.
Physical Inventory
An actual count of food and supplies must be taken on a periodic basis. Tis is called a physical inventory. In schools, a
physical inventory is usually taken of all products in refrigerators, freezers, and dry storage areas once a month.
CHAPTER 4: Best Practices in Inventory Control
35
Note for central kitchens and warehouses: In larger volume operations it is not usually practical to take a full
monthly inventory at one time. Tese operations should maintain a perpetual inventory system and utilize
cycle counts for checking accuracy of inventory records and to control shrinkage. In cycle counting, a group of
products is randomly selected from a list of expensive or high volume products and counted on a periodic basis.
For example, 20 diferent items may be counted each week.
It is a best practice to have two people involved in taking inventory; one to count and one to record. To maintain
integrity, at least one of the people should not be involved with day-to-day storekeeping responsibilities such as
receiving or issuing.
Food and Supply Cost Calculation
Food and supply cost may be calculated in two ways. One way is to calculate the total food and supplies used from daily
storeroom requisitions. Tis may be useful when a monthly inventory system is not used. An advantage of this system
is that it will provide an actual food cost associated with the day’s menu. Tis value may be added to production records
for post-costing of menus so that you can see what part of food cost can be attributed to waste.
Inventory values may be used to calculate food costs when used with food purchases. When inventory values are used
to calculate food cost, timing of monthly physical inventories should coordinate with invoice processing so that items
included in the ending inventory also are included in food and supplies purchased for the month. Te same formula
may be used for calculating food or supplies. Te formula for calculating food cost is:
Beginning inventory + food purchases - ending inventory = cost of food used
Tis method provides an accurate monthly cost but will not provide enough information to determine the days that
food costs are too high or what portion of the food cost can be attributed to waste or shrinkage. Post costing of menus
will help determine if high food costs can be attributed to incorrect forecasting or waste.
Technology can greatly beneft the process of taking a physical inventory. Te simplest systems provide items listed
in the order of storage areas, record quantities on hand, track unit pricing, and calculate total inventory value. More
sophisticated systems allow the user to scan in bar codes for items and type in quantities. Both will lead to faster and
more accurate inventory counting than traditional methods.
Production
Production procedures impact inventory control by ensuring correct products are used, portion sizes are correct, and
waste from production is controlled. If using cycle menus, production records can be pre-printed with:
n product codes/GTIN,
n recipe numbers,
n serving size, and
n serving utensil required.
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Inventory Management and Tracking Reference Guide
Tis ensures the right items and portions are used in production. Record the GTIN or product code of foods used in
production . To help with traceability, lot numbers may be added to production records as products are pulled from
inventory.
All recipes should be standardized for consistent yields. Recipes should be extended to the number of servings needed.
Match recipe extensions to standard serving pan sizes to discourage overproduction. In some cases, this may mean
purchasing smaller pans such as half pans for lasagna or half sheet pans for pizza. Using standard or whole production
measures on production records and recipe extensions helps control waste by planning the use of whole cans rather
than specifying a partial can only to have production employees use the entire contents rather than saving the
remainder as a lefover.
Waste may be controlled by accurately forecasting production needs and batch cooking. Production records are not just
a program requirement; they are also an important management tool. Cycle menus make it easier to forecast needs. For
efcient use of cycle menus:
n predict the quantity of each item needed using sales and production history,
n plan to have a small amount of each item lefover to ensure all students have the same choices,
n record the number of servings sold at the end of each serving period or every 30 minutes to forecast batch cooking
needs for the next menu cycle,
n record an estimate of how many additional servings may have been sold when products run out, in order to forecast
more accurately for the next menu cycle,
n complete production records immediately afer each serving period to promote accuracy,
n freeze usable lefovers to serve the next time the cycle is repeated, and
n record production projections and lefovers to be used on the production record for the next menu cycle immedi-
ately afer completing each day’s production record.
Having enough stock on hand for production is essential. When products are substituted due to insufcient stock,
historical records cannot be used to forecast production and current records will not be useful for forecasting future
production. Tis ofen begins a cycle of inaccurate forecasting that is difcult to break.
Service
Te fnal process afecting inventory is serving products to customers. Sometimes the best production planning is
inefective due to serving incorrect portion sizes. Correct portioning can:
nresult in customer satisfaction because the same portion size is served to everyone,
nmake certain that expected yields are obtained from recipes so that products do not run out,
nensure that school nutrition program regulations for serving sizes are met, and
ncontrol costs.
Controlling thef during service is also important in inventory management. Food items that are easy to hide in pockets
or bags need to be placed by the cashier or held behind the line until customers have paid for them.
Keeping an inventory of items placed on the line can help identify when thef is occurring. Tis is efective for tracking
a la carte items that tend to be stolen more frequently. One employee should place items in snack bars or serving lines
CHAPTER 4: Best Practices in Inventory Control
37
and record the count for each item (see Exhibit 4-6). As lines are refreshed with items, the record should be updated. A
diferent employee should cashier the line. Once serving is over, the employee should take a fnal count of the items and
record. Te site manager adds the sales from the point-of-sale report or tape. Te usage is calculated:
beginning inventory + additions – ending inventory = sales
Specifc items can be programmed on the computerized cash register at the point-of-sale rather than using generic
item keys. Tis improves item tracking, aids in completing production records, and helps identify thef. Requirements
to record servings of a la carte and adult portions on production records are nearly impossible to achieve accurately
without ringing up individual food items at the point-of-sale.
Some point-of-sale systems allow users to scan bar codes at the point-of-sale. Many prepackaged item labels are already
printed with bar codes. Tis practice records specifc item information quickly and accurately. Compare the point-
of-sale register sales record to the projected sales. If there is a sizable diference between the two amounts, either the
cashier is not ringing up sales correctly or customers are taking items and not paying for them.
EXHIBIT 4-6 Sales Inventory Form
Item Beg. Inventory + Additions - End Inventory = Number Sold Price Projected Total
Water 48 24 20 52 .75 $ 39.00
Juice, 12 oz 60 10 50 1.00 $ 50.00
Pretzels 48 12 5 55 .50 $ 27.50
Crackers 24 4 20 .50 $ 10.00
Expected Total Sales $126.50
Total Sales from Register $120.50
Adding columns for portion cost information to production records enables the manager to identity where food costs
are afected by overproduction and waste. Exhibit 4 -7 illustrates this process:
1. Multiply portion cost (column 4) by usage (columns 7 and 8) to achieve total cost (column 9).
2. Divide total cost (column 9) by number served (column 7) to achieve actual portion cost (column 10).
3. Total column 9 to get the total food cost for the meal.
4. Divide the total food cost (11) by number of meals served (2). Tis is the cost per lunch (13).
5. Notice that the $ .86 actual cost (13) is $ .05 per meal higher than the planned cost (1) of $ .81. Tis was due to the
waste from the sandwiches and broccoli.
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Inventory Management and Tracking Reference Guide
EXHIBIT 4 -7 Example of Post Service Section of Production Record
Planned per meal cost: $ .81 (1) Lunches served: 85 (2)
Menu
Item
(3)
Portion
Cost
(4)
Qty
Produced
(5)
Usable
Lefover
(6)
Served
(7)
Waste
(8)
Total Cost
(9)
Actual
Portion Cost
(10)
Chicken Patty
on Bun
$ .35 100 10 85 5 $ 31.50 $ .37
Broccoli $ .20 75 0 65 10 $ 15.00 $ .23
Peaches $ .18 80 10 70 0 $ 12.60 $ .18
Milk $ .20 85 15 70 0 $ 14.00 $ .20
Total Meal Cost (11) $ 73.10
Actual Food Cost Per Meal $ .86 = $ 73.10 ÷ 85 (13)
Technology can make preparation of production records much faster and more accurate. A simple spreadsheet can be
developed for each day and designed with locked cells with menu items, portion sizes, portion costs, and formulas for
all calculations. Te cooks and managers enter the quantities produced, served, and wasted and spreadsheet formulas
complete the calculations. Computer sofware can make the process even more precise by calculating pre-costs from
recipes and menus and adding items served from point-of-sale transactions.
Summary
Inventory control is more than securing products in storage areas. It starts with carefully planned menus, procuring
the right products in the right quantities, and making sure the items ordered are the ones received. Secure storage areas
are important; however accurate production forecasting and meal preparation to ensure student choices are equally
important. Finally, serving the planned portion of each food item and protecting items from customer and employee
thef completes the chain of control.
CHAPTER 5: Responding to Food Emergencies including Recalls
39
C H A P T E R 5
Responding to Food Emergencies
including Recalls
Preparing for Problems
Careful management of food and supply inventories from the time a product is received into the facility until it is
served or discarded is considered good business practice. Tese management practices include:
nkeeping products secure,
nseparating products from sources of contamination, and
ntracking quantities received, on-hand, used, and disposed.
Proactive preparation for emergencies has increased the need for additional inventory management practices that
will prevent or minimize foodborne illness caused by products that have been adulterated, mishandled, or mislabeled.
Schools may either be a recipient of products suspected of contamination or they could be the source of contamination.
In both instances, careful inventory practices and recordkeeping can minimize damages.
Every school district should develop an Emergency Management Plan that provides:
ndescriptions of emergencies that might afect the school district;
ncontact information for emergency-management team members, district administration, and outside resources such
as the health department, the fre department, the local Environmental Protection Agency, and the local Environ-
mental Health Agency;
nroles and responsibilities of each emergency-management team member;
nappropriate response to each type of emergency;
ncommunication plan containing information to be shared with employees, parents, and community and who the
spokesperson will be; and
na recovery plan for each type of emergency including follow-up investigations.
Ensuring the ability to trace foods back through the supply chain to their original source and to track food received
from your facility is part of a proactive emergency response plan and is needed in the event that:
nschool customers become ill from eating a food product served at school;
na food safety or quality problem for a product is identifed at your facility; or
na product is recalled.
Tis requires keeping records containing information used to identify the product, the source or recipient, and delivery
(Exhibit 5-1).
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Inventory Management and Tracking Reference Guide
EXHIBIT 5-1 Recordkeeping Requirements for Tracking Food and Supplies
RECORD SPECIFIC INFORMATION
Product identifcation information Manufacturer
Product code or GTIN
Lot or batch number
Sell by or use by date
Establishment number for meat, poultry, or egg products
Information about the source or recipient
(if shipping to another location)
Name
GLN
Physical address
Phone number
Fax number
E-mail address
Delivery or shipping information Delivery order number
Notice to deliver number
Delivery date
Quantity of product received or shipped
When a problem occurs at a school, a detailed description of the problem and contact information for the people
involved (e.g., customer reporting illness, personnel who prepared the food) should be kept. Food should not be
discarded until a sample is taken by the Health Department or instructed by state agency during a recall process.
Disposal of products is a CTE . A written record of all food discarded and the manner in which it was disposed of
should be maintained.
Freeze one or two servings of every batch of prepared food that has been cooled and reheated to use in the event of a
complaint. Label the product with recipe number and/or name, date of preparation, name of personnel who prepared
the item, date the item was served, and the date when the sample may be discarded. Note the products and product
number that were sampled and stored on production records. Keep for two weeks.
Central Production Facilities: Setup a schedule to randomly sample product on the production line and send
to a laboratory for microbial analysis. Record the product name, date of production, date of service, personnel
involved in production, and outcome of the analysis. Note the products that were sampled and stored on
production records.
Identifying Stakeholders and Their Responsibilities
It takes a team to respond to emergencies and many diferent school personnel may be involved, each fulflling
distinct roles. Some emergencies require roles that are not needed in other circumstances (Exhibit 5-2). Te size and
composition of the emergency response team will depend on the size of the district and the nature and scope of the
emergency. In addition to internal personnel, individuals representing outside agencies may play a role including the
health department, emergency frst responders, and state agencies.
CHAPTER 5: Responding to Food Emergencies including Recalls
41
EXHIBIT 5-2 Internal Roles Required for Various Emergencies
ROLE AND RESPONSIBILITY
BIOTERRORISM FOODBORNE
ILLNESS
NATURAL
DISASTER
RECALL
Local School District
Emergency Director –
Responsible for response, coordinates team activities, and
serves as single point of contact for outside agencies.
X X X X
Communication Coordinator –
Media and community spokesperson, drafs press releases,
posts notices to website, and conducts media briefngs.
X X X X
Logistics Coordinator –
Responsible for securing facility, providing accommodations
and transportation for response team, providing
communication e.g., phone, walkie-talkies
X X
Human Resources Coordinator –
Next of kin notifcation, counseling services, hiring of
temporary help needed for crisis
X X X
Supply Chain Coordinator –
Determines impact on products being shipped from facility,
current stock, and products due in.
X X X X
Product Disposal Coordinator -
Destroy and/or dispose of products in a manner that will not
harm people or the environment.
X X X X
Local Authorities
Police Department X
Fire Department X
Local Health Department X X X
Local Environmental Protection Agency X X
Local Environmental Health Association X X
State Authorities
State Health Department X
State Department of Agriculture X
State Agency responsible for USDA Foods program X X X
State Environmental Protection Agency X
State Environmental Health Agency X X
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Inventory Management and Tracking Reference Guide
ROLE AND RESPONSIBILITY
BIOTERRORISM FOODBORNE
ILLNESS
NATURAL
DISASTER
RECALL
Federal Authorities
USDA, FSIS (Meat, Poultry, Eggs, and USDA Foods)
X X X X
USDA, FNS
X X X X
Department of Health and Human Services (HHS)
Food and Drug Association (FDA)
Centers for Disease Control and Prevention (CDC)
X
X
X
X
X
X
Food Emergency Response Network (FERN) X X X
Federal Bureau of Investigation (FBI) X
Department of Homeland Security (DHS)
Emergency Preparedness and Response (EP&R)
Federal Emergency Management Agency (FEMA)
X X
Private Sector
Manufacturers and further processors
X X X
Distributors
X X
Private cold and dry warehouses
X X X
At a minimum, the director will be expected to provide information about the products served, when they were served,
the people who had access to the implicated food products, who received or was served the products, and how much
was consumed. Te accuracy and completeness of records will be crucial in determining the products involved and the
ability to control damage. Te director of school nutrition also may be assigned the role of supply chain coordinator
and product disposal coordinator or given other roles depending on the circumstances.
Commercial Products
School districts are responsible for ensuring the safety of commercial food items. USDA Foodand Nutrition Service
and state agencies do not know what foods school districts may purchase and cannot ensure product safety or inform
schools regarding commercial product recalls. When a commercial product is recalled that may be used in schools,
USDA and the state agency may send a general alert. Although most vendors will alert their customers of recalled
products, district personnel should track recalls by signing up for recall e-mail alerts on www.recalls.gov, which tracks
recalls for both FDA and FSIS. Districts also may sign up on GovDirect for notices from FNS about USDA Foods.
Links to both sites are included in the Resources section of this guide.
CHAPTER 5: Responding to Food Emergencies including Recalls
43
To report a problem with a food purchased commercially, contact the manufacturer directly. Information should include:
nproduct name and code (GTIN) number,
nlot, batch, and/or manufacturing or use-by date,
nclear statement of the problem,
nquantity of product afected and still on hand, and
nname and GLN of distributor and delivery date.
If a commercial food is suspected as the cause of a foodborne illness in schools, the local health department should
be contacted frst so they can assist in identifying the source of the illness. A written record should be kept of the
complaint. At no time should school nutrition personnel admit guilt before an investigation is complete.
USDA Foods (Brown Box and Processed)
In the case of USDA Foods, the school district, state distributing agency (SDA), and FNS all have responsibilities
for food safety (Exhibit 5-3). FNS is responsible for alerting state distributing agencies of any USDA Foods that
are recalled. For foods diverted to a processor, notifcations will come from the state agency and the processor.
State distributing agencies are responsible for alerting all recipient agencies, including school districts. FNS cannot
directly notify school districts because they do not know who has received product; however, schools may sign up
for the Commodity Alert System athttps://www.envoyprofles.com/USDA-ALERTS/ . Once the registration form is
completed, a confrmation email will be sent that explains how to activate your account. Be sure to follow directions in
the follow-up email to complete the registration process.
EXHIBIT 5-3 Agencies Involved With Recalls of USDA Foods
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Inventory Management and Tracking Reference Guide
When a problem occurs with a USDA Foods or a further-processed food product, it should be reported to the state
distributing agency, not FNS. Te SDA will determine if the problem can be resolved at the local or state level, and
if not, the SDA will report the problem to FNS. A record should be kept of the complaint. School districts should be
prepared to provide the following information to the SDA:
nUSDA Foods name and code number;
ncase codes including lot, batch, or manufacturing or use-by date;
ndescription of the problem with special circumstances involved;
ndate USDA Foods was received;
nquantity of product afected;
nquantity and physical address of product remaining and if the remaining product is afected or not;
ncontract number (may be stenciled on the outer carton);
ndelivery order number and notice to deliver number;
ndigital photographs of damaged product or foreign objects, if helpful; and
npayee information and documentation of loss if requesting reimbursement.
CHAPTER 6: Standard Operating Procedures
45
C H A P T E R 6
Standard Operating Procedures
Schools must comply with federal, state, and local regulations covering school nutrition programs, public health,
purchasing, and accounting practices as well as policies related to foodservice and business best practices. Standard
operating procedures (SOPs) clarify and simplify regulations and policies into a format that employees can use in their
work environment. Development of SOPs can:
nimprove processes;
nimprove compliance with regulations and policies;
nclarify and improve staf performance;
nidentify roles and responsibilities;
nprovide base content for training programs; and
nprovide instructions for immediate corrective actions if necessary.
Te concept of inventory management and tracking may be new to school nutrition staf. Creating new SOPs and
updating existing SOPs to address inventory management and tracking ensures school nutrition employees across the
district consistently handle inventory in a manner that controls cost, improves productivity, and provides safe products
with consistent quality.
Te SOPs in this chapter are intended to serve as examples. Each school nutrition operation must establish their own
SOPs to address their specifc products, personnel, equipment, processes, and needs.
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Inventory Management and Tracking Reference Guide
Tracking Products
(Sample SOP)
PURPOSE: To ensure that all food and supplies can be identifed and accounted for from the moment they are
received until they are consumed, disposed of, or shipped to a new location.
SCOPE: Tis procedure applies to employees who handle, prepare, or serve food.
KEY WORDS: Receiving, Storage, Production, Holding, Serving, Delivery, Tracking, Traceability
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. Compare delivery invoice against products ordered and products delivered for both delivery quantities and product
code or GTIN.
3. Record GTIN, lot number, and storage location in perpetual inventory system (manual or electronic) upon receipt of
product, when product is removed from storage, or when a product is disposed of.
4. Store products in labeled storage area. When products are removed from storage area, record GTINs and lot
numbers on storage requisition form. Use the storeroom requisition to update perpetual inventory system.
5. Record GTINs on production records. If a lefover product is used, include the date the product was originally
prepared on the production record.
6. If products are shipped to another location record the GTINs and lot numbers on the shipping record.
7. If a product is disposed of, record the GTIN and lot on a Damaged or Discarded Product Log. Use this log to update
the perpetual inventory system.
THE UNIT SUPERVISOR WILL:
1. Train employees on using the procedures in this SOP.
2. Post SOP in storage area.
MONITORING:
Te manager will observe products received, removed from storage, and produced. Te manager will also observe
products shipped each day to ensure that product numbers or GTINs and lot numbers are recorded.
CORRECTIVE ACTION:
1. Retrain any employee found not following the procedures in this SOP.
2. Remind employees where SOP’s are located.
CHAPTER 6: Standard Operating Procedures
47
Tracking Products, continued
(Sample SOP)
VERIFICATION AND RECORD KEEPING:
Te manager will complete the Site Inventory Management and Tracking Checklist monthly. Te Site Inventory
Management and Tracking Checklist will be kept for a minimum of 1 year.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
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Inventory Management and Tracking Reference Guide
Receiving Deliveries
(Sample SOP)
PURPOSE: To ensure that all food is received fresh and safe when it enters the school nutrition operation, to facilitate
traceability, and to transfer food to proper storage as quickly as possible.
SCOPE: Tis procedure applies to employees who handle, prepare, or serve food.
KEY WORDS: Cross-Contamination, Temperatures, Receiving, Holding, Frozen Goods, Delivery, Tracking,
Traceability
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. Organize freezer and refrigeration space, loading docks, and store rooms before deliveries.
3. Gather product specifcation lists and purchase orders, temperature logs, calibrated thermometers, pens, fashlights,
and clean carts before unloading deliveries. Refer to the Using and Calibrating Termometers SOP.
4. Keep receiving area clean and well lighted.
5. For USDA Foods deliveries, clip seal on truck.
6. Do not touch ready-to-eat foods with bare hands.
7. Mark products with the date of arrival or the “use-by” date accordingly upon receipt.
8. Compare delivery invoice with products ordered and products delivered for both delivery quantities and product
code or GTIN.
9. Record lot numbers on perpetual inventory cards, invoices, or other receiving records.
10. Transfer foods to their appropriate locations as quickly as possible.
THE UNIT SUPERVISOR WILL:
1. Train employees on using the procedures in this SOP.
2. Schedule deliveries to arrive at designated times when employees are available to check them in.
3. Post the delivery schedule, including the names of vendors, days and times of deliveries, and drivers’ names.
THE DIRECTOR OF SCHOOL NUTRITION WILL:
1. Establish a rejection policy to ensure accurate, timely, consistent, and efective refusal and return of rejected goods.
2. Determine whether foods will be marked with the date of arrival or the “use-by” date.
CHAPTER 6: Standard Operating Procedures
49
Receiving Deliveries, continued
(Sample SOP)
MONITORING:
1. the delivery truck periodically when it arrives to ensure that it is clean, free of putrid odors, and organized to prevent
cross-contamination. Be sure refrigerated foods are delivered on a refrigerated truck.
2. Check the interior temperature of refrigerated trucks.
3. Confrm vendor name, day and time of delivery, and driver’s identifcation before accepting delivery. If driver’s name
is diferent from what is indicated on the delivery schedule, contact the vendor immediately.
4. For USDA Foods delivery, check the seal on truck. If the seal is broken, contact the state distributing agency.
5. Check frozen foods to ensure that they are all frozen solid and show no signs of thawing and refreezing, such as the
presence of large ice crystals or liquids on the bottom of cartons.
6. Check the temperature of refrigerated foods.
a. For fresh meat, fsh, and poultry products, insert a clean and sanitized thermometer into the center of the product
to ensure a temperature of 41°F or below. Te temperature of milk should be 45°F or below.
b. For packaged products, insert a food thermometer between two packages being careful not to puncture the
wrapper. If the temperature exceeds 41°F, it may be necessary to take the internal temperature before accepting
the product.
c. For eggs, the interior temperature of the truck should be 45°F or below.
7. Check dates of milk, eggs, and other perishable goods to ensure safety and quality.
8. Check the integrity of food packaging.
9. Check the cleanliness of crates and other shipping containers before accepting products. Reject foods that are
shipped in dirty crates.
CORRECTIVE ACTION:
1. Retrain any employee found not following the procedures in this SOP.
2. Reject the following:
nFrozen foods with signs of previous thawing
nCans that have signs of deterioration, such as swollen sides or ends, fawed seals or seams, dents, or rust
nPunctured packages
nFoods with out-dated expiration dates
nFoods that are outside the safe temperature zone or deemed unacceptable by the established rejection policy
nItems with product codes or GTINs that do not match products ordered
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Inventory Management and Tracking Reference Guide
Receiving Deliveries, continued
(Sample SOP)
VERIFICATION AND RECORD KEEPING:
Record the food temperature and corrective action on the delivery invoice or on the Receiving Log. Te manager will
verify that employees are receiving products using the proper procedure by visually monitoring receiving practices
during the shif and reviewing the Receiving Log at the close of each day. Receiving Logs are kept on fle for a
minimum of 1 year.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from the U.S. Department of Agriculture, Food and Nutrition Service, and the National Food Service Management
Institute. (2005). HACCP-based standard operating procedures (SOPs) designed to address food safety issues.
CHAPTER 6: Standard Operating Procedures
51
Transporting Food to Remote or Satellite Sites (Shipping Site)
(Sample SOP)
PURPOSE: To prevent foodborne illness by ensuring that food temperatures are maintained during transportation;
contamination is prevented; and aid product traceability by recording product codes and lot numbers.
SCOPE: Tis procedure applies to employees who transport food from a central kitchen to remote sites (satellite
kitchens).
KEY WORDS: Hot Holding, Cold Holding, Reheating, Cooling, Transporting Food, Tracking, Traceability
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. If State or local health department requirements are based on the 2009 FDA Food Code:
nKeep frozen foods frozen during transportation.
nMaintain the temperature of refrigerated, potentially hazardous foods at 41°F or below and cooked foods that are
transported hot at 135°F or above.
3. Use only food carriers for transporting food approved by the NSF or that have otherwise been approved by the state
or local health department.
4. Prepare the food carrier before use:
nEnsure that all surfaces of the food carrier are clean.
nWash, rinse, and sanitize the interior surfaces.
nEnsure that the food carrier is designed to maintain cold food temperatures at 41°F or below and hot food
temperatures at 135°F or above.
nPlace a calibrated stemmed thermometer or temperature data logger in the warmest part of the carrier if used for
transporting cold food, or the coolest part of the carrier if used for transporting hot food. Refer to the Using and
Calibrating Termometers SOP.
nPre-heat or pre-chill the food carrier according to the manufacturer’s recommendations.
5. Store food in containers suitable for transportation. Containers should be:
nRigid and sectioned so that foods do not mix.
nTightly closed to retain the proper food temperature.
nNonporous to avoid leakage.
nEasy-to-clean or disposable.
nApproved for food use and have National Sanitation Foundation emblem.
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Inventory Management and Tracking Reference Guide
Transporting Food to Remote Sites (Satellite Kitchens), continued
(Sample SOP)
INSTRUCTIONS, continued:
6. Place food containers in food carriers and transport the food in clean trucks, if applicable, to remote sites as quickly
as possible.
7. Prepare shipping documents to include: date, product code, quantity shipped, and lot or batch number.
8. Follow Receiving Deliveries SOP when food arrives at remote site.
THE UNIT SUPERVISOR WILL:
Train employees on using the procedures in this SOP.
MONITORING:
1. Check the air temperature of the food carrier to ensure that the temperature suggested by the manufacturer is
reached prior to placing food into it.
2. Check the internal temperatures of food using a calibrated thermometer before placing it into the food carrier. Refer
to the Holding Hot and Cold Potentially Hazardous Foods SOP for the proper procedures to follow when taking
holding temperatures.
CORRECTIVE ACTION:
1. Retrain any employee found not following the procedures in this SOP.
2. Continue heating or chilling food carrier if the proper air temperature is not reached.
3. Reheat food to 165°F for 15 seconds if the internal temperature of hot food is less than 135°F. Refer to the Reheating
Potentially Hazardous Foods SOP.
4. Cool food to 41°F or below using a proper cooling procedure if the internal temperature of cold food is greater than
41°F. Refer to the Cooling Potentially Hazardous Foods SOP for the proper procedures to follow when cooling food.
5. Discard food held in the temperature danger zone (41º F to 135º F) for greater than 4 hours.
VERIFICATION AND RECORD KEEPING:
1. Before transporting food to remote sites, school nutrition employees will record food carrier temperature, food prod-
uct name and product code, time, internal temperatures, and any corrective action taken on the Hot and Cold Hold-
ing Temperature Log.
CHAPTER 6: Standard Operating Procedures
53
Transporting Food to Remote Sites (Satellite Kitchens), continued
(Sample SOP)
2. Te manager at central kitchens will verify that school nutrition employees are following this SOP by visually observ-
ing employees and reviewing and initialing the Hot and Cold Holding Temperature Log and shipping document
daily.
3. Te manager will complete the Food Safety Checklist daily. Te Food Safety Checklist is to be kept on fle for a mini-
mum of 1 year.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from the U.S. Department of Agriculture, Food and Nutrition Service, and the National Food Service Management
Institute. (2005). HACCP-based standard operating procedures (SOPs) designed to address food safety issues.
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Inventory Management and Tracking Reference Guide
Receiving Food Shipped from Production Kitchen
(Sample SOP)
PURPOSE: To prevent foodborne illness by ensuring that food temperatures are maintained during transportation;
contamination is prevented; and product can be traced by recording product codes and lot numbers.
SCOPE: Tis procedure applies to satellite kitchen employees who receive food from a central kitchen.
KEY WORDS: Hot Holding, Cold Holding, Reheating, Cooling, Transporting Food, Tracking, Traceability
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. If State or local health department requirements are based on the 2009 FDA Food Code:
nCheck and record product code or GTIN, receiving temperatures, and corrective actions taken on the Receiving
Log upon receipt of food. Sign the shipping document and return it to the central kitchen.
nMaintain the temperature of refrigerated, potentially hazardous foods at 41°F or below and cooked foods that are
transported hot at 135°F or above.
THE UNIT SUPERVISOR WILL:
Train employees on using the procedures in this SOP.
MONITORING:
Check the internal temperatures of food using a calibrated thermometer when receiving it. Refer to the Holding Hot
and Cold Potentially Hazardous Foods SOP for the proper procedures to follow when taking holding temperatures.
CORRECTIVE ACTION:
1. Retrain any employee found not following the procedures in this SOP.
2. Reheat food to 165°F for 15 seconds if the internal temperature of hot food is less than 135°F. Refer to the Reheating
Potentially Hazardous Foods SOP. Reject food if it is less than 135°F and equipment is not available to reheat food.
3. Cool food to 41°F or below using a proper cooling procedure if the internal temperature of cold food is greater than
41°F. Refer to the Cooling Potentially Hazardous Foods SOP for the proper procedures to follow when cooling food.
4. Discard food held in the temperature danger zone for greater than 4 hours.
CHAPTER 6: Standard Operating Procedures
55
Receiving Food Shipped from Production Kitchen, continued
(Sample SOP)
VERIFICATION AND RECORD KEEPING:
1. Te manager at the remote site(s) will verify that employees are receiving foods at the proper temperature and fol-
lowing the proper receiving procedures by visually observing receiving practices during the shif and reviewing and
initialing the Receiving Log daily. All logs are kept on fle for a minimum of 1 year.
2. Te manager will complete the Food Safety Checklist daily. Te Food Safety Checklist is to be kept on fle for a mini-
mum of 1 year.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from the U.S. Department of Agriculture, Food and Nutrition Service, and the National Food Service Management
Institute. (2005). HACCP-based standard operating procedures (SOPs) designed to address food safety issues.
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Inventory Management and Tracking Reference Guide
Handling a Food Recall – District Ofce
(Sample SOP)
PURPOSE: To prevent foodborne illness by quickly identifying and securing products in the event of a product recall.
SCOPE: Tis procedure applies to district-level personnel responsible for reporting recall information.
KEY WORDS: Food Recalls, Traceability, Tracking
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. Review the food recall notice and specifc instructions that have been identifed in the notice.
3. Check purchasing specifcations and receiving documents to identify products matching the product code or GTIN
and lot numbers identifed in recall notice.
4. Communicate the food recall notice to afected feeding sites using a method that confrms the message was received
and understood e.g., e-mail with read receipt.
5. Prepare instructions for the site personnel to hold the recalled product using the following steps:
nPhysically segregate the product, including any open containers, lefover product, and food items in current pro-
duction that contain the recalled product.
nIf an item is suspected to contain the recalled product, but label information is not available, segregate with other
foods containing recalled product.
nMark recalled product “Do Not Use” and “Do Not Discard.” Inform the entire staf not to use the product.
6. Arrange for food to be collected and disposed of as soon as possible or within 30 days per instructions contained in
the recall notice.
7. Do not destroy any USDA Foods without ofcial written notifcation from the State Distributing Agency, USDA
Foods Safety Inspection Services (FSIS), or State or local health department.
8. Inform the school district’s public relations coordinator of the recalled product and what steps are being taken to
secure and dispose of the product.
9. Obtain accurate counts of the recalled products from every feeding site, including the amount received, in inventory,
and amount used.
10. Account for all recalled product by verifying site inventory counts against records of food received at the feeding
site.
11. Identify and record in a spreadsheet whether any of the product was received in the district, the status of the
product (e.g., used, on-hand), locate the food recall product by feeding site, and verify that the food items bear the
product identifcation code(s) and lot and/or production date(s) listed in the recall notice.
12. Report the status of recalled product within 10 days to State distributing agency (for USDA Foods) or manufacturer
(for purchased and further processed food).
CHAPTER 6: Standard Operating Procedures
57
Handling a Food Recall, continued
(Sample SOP)
THE UNIT SUPERVISOR WILL:
Train employees on using the procedures in this SOP.
MONITORING:
Employees and manager will visually observe that school sites have segregated and secured all recalled products.
CORRECTIVE ACTION:
Retrain any employee found not following the procedures in this SOP.
VERIFICATION AND RECORD KEEPING
1. Employees will record the name and product code or GTIN, lot number of the contaminated food, date, time, and
the reason why the food was discarded on the Damaged or Discarded Product Log.
2. Te manager will verify that appropriate corrective actions are being taken by reviewing, initialing, and dating the
Damaged or Discarded Product Log each day. Maintain the Damaged or Discarded Product Logs for a minimum of
1 year.
3. Te school nutrition director will complete and maintain all required documentation related to the recall including:
nRecall notice
nRecords of how food product was returned or destroyed
nReimbursable costs
nPublic notice and media communications
nCorrespondence to and from the public health department and State agency
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from: National Food Service Management Institute. (2002). Responding to a Food Recall. University, MS: Author.
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Inventory Management and Tracking Reference Guide
Handling a Food Recall – School Site
(Sample SOP)
PURPOSE: To prevent foodborne illness by quickly identifying and securing products in the event of a product recall.
SCOPE: Tis procedure applies to site school nutrition employees who prepare or serve food.
KEY WORDS: Food Recalls, Traceability, Tracking
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. Review the food recall notice and specifc instructions that have been identifed in the notice. Notify the central
ofce that the notice was received and understood.
3. Check receiving documents, perpetual inventory, requisitions, production records, and shipping records to identify
products matching the product code or GTIN and lot numbers identifed in recall notice.
4. Quarantine the recalled product using the following steps:
nPhysically segregate the product, including any open containers, lefover product, and food items in current
production that items contain the recalled product.
nIf an item is suspected to contain the recalled product, but label information is not available, follow the district’s
procedure for disposal.
5. Mark recalled product “Do Not Use” and “Do Not Discard.” Inform the entire staf not to use the product.
6. Do not destroy any products until directed to do so by the central ofce ofcial e.g., School Nutrition Director.
7. Identify and record whether any of the product was received at the site, the status of the product e.g., used, on-hand,
and verify that the food items bear the product identifcation code(s) and production date(s) or lot number listed in
the recall notice.
8. Notify shipping sites of any recalled product shipped, date shipped, and other specifc directions to be followed per
the recall notice.
THE UNIT SUPERVISOR WILL:
Train employees on using the procedures in this SOP.
MONITORING:
Te manager will visually observe that employees have segregated and secured all recalled products.
CORRECTIVE ACTION:
Retrain any employee found not following the procedures in this SOP.
CHAPTER 6: Standard Operating Procedures
59
Handling a Food Recall, continued
(Sample SOP)
VERIFICATION AND RECORD KEEPING
1. Employees will record the name and product code or GTIN, quantity, lot number of the recalled food, date, and time
on the Damaged or Discarded Product Log.
2. Te manager will verify that appropriate corrective actions are being taken by reviewing, initialing, and dating the
Damaged or Discarded Product Log each day. Maintain the Damaged or Discarded Product Logs for a minimum of
1 year.
3. Update perpetual inventory record with adjustment – recall.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from: National Food Service Management Institute. (2002). Responding to a Food Recall. University, MS: Author.
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Inventory Management and Tracking Reference Guide
Inventory Management and Tracking Checklists
Te following checklists may be used along with SOPs for monitoring site and central ofce processes afecting inventory. Te
central ofce checklist should be used at least twice per year. Te site checklist should be used a minimum of once per month.
Central Ofce Inventory Management and Tracking Checklist
TASK STATUS
Menu Planning Yes No Corrective Action
Cycle menus are used.
Menus are planned centrally with one menu used for each site or
production type (e.g., elementary schools, satellite schools)
Both reimbursable meals and a la carte oferings are specifed on
menus and production records.
Menu selections are based on production and sales history.
Menus ofer only items with sales of at least 25 servings.
Menus are planned by January of prior year so that USDA Foods
orders and bids can be based on menu forecasts.
Procurement Yes No Corrective Action
Only items on menu are included on bid.
Only items with daily sales of 25 or more servings on average per site
are included on bids.
Specifc product code numbers or GTIN numbers are included in bid
specifcations for pre-approved items.
Bid instructions require vendors to specify product code numbers or
GTINs in bid responses.
Once bids are accepted, only products with specifed product codes are
accepted for delivery unless a substitution is approved in advance.
Menus are provided to vendors in advance of orders.
GLN numbers are obtained for the district and each delivery site.
Vendor and delivery site GLNs are included on invoices and advanced
shipping notices.
Forecasting and Ordering Yes No Corrective Action
Managers are provided with an ordering calendar specifying when
each order is to be placed.
CHAPTER 6: Standard Operating Procedures
61
TASK STATUS
Forecasting and Ordering Yes No Corrective Action
Par values are set for applicable items.
Managers do not have to place orders when an order is still in transit
(placed but not received).
Managers are provided order guides matching menus.
Orders are approved by supervisor.
Receiving Yes No Corrective Action
Site personnel are provided with an SOP for receiving.
At least one employee at each site is trained in receiving procedures.
Receiving personnel are provided with product specifcations including
product codes or GTINs.
Bids contain requirements for delivery times so that deliveries are
made when receiving personnel are available.
Receiving complaints are logged so that poor vendor performance can
be addressed and mitigated.
Storage Yes No Corrective Action
Storage areas keys are distributed to only those requiring access and are
signed for when issued.
An SOP is provided to site managers and personnel covering kitchen
visitors and customers access to storage and preparation areas.
An SOP is provided to site managers and personnel covering proper
dry, refrigerated, and freezer storage.
An SOP is provided to site managers and personnel on the issuing
process.
Inventory Control Yes No Corrective Action
Inventory level goals (e.g., days of inventory on hand) are established
for each site.
Site inventory levels are monitored monthly and corrective action is
taken when needed.
Automated or manual perpetual inventory systems are in use.
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Inventory Management and Tracking Reference Guide
TASK STATUS
Product codes or GTIN and lot numbers are required in inventory
records (e.g., perpetual inventory cards, storeroom requisition)
Follow-up is performed when there are discrepancies between “book”
value and physical inventory to determine cause.
Physical inventories are required on the last working day of each
month.
Inventory Control Yes No Corrective Action
Food cost goals (as a % of revenue) are set for each site and shared
among all site managers.
Cost of food used is calculated each month for each site.
Production Yes No Corrective Action
Production records have columns for waste and cost so that managers
can see the value of food wasted.
Production records are preprinted to match menus.
Production records contain product codes or
GTIN and have blank cells for lot numbers.
Recipes are developed so that typical production will match pan size
and smaller pans are specifed for smaller batches.
An SOP is provided to site manager and employees covering disposal
of unusable lefovers.
Service Yes No Corrective Action
Policies are developed for how thef will be handled for employees,
customers, and vendors.
Portion sizes and serving utensils are specifed on menus and/or
production records.
Sales inventory records are used on each serving line, at least for a la
carte items, to track sales of each item.
CHAPTER 6: Standard Operating Procedures
63
Site Inventory Management and Tracking Checklist
TASK STATUS
Menu Planning Yes No Corrective Action
Menus are consistently followed. Pre-approved substitutions are
made when necessary.
Feedback is provided to menu planners about popularity of
menus based on production and sales records.
Any issues with menu quality or difculty of preparation are
reported to the menu planner.
Forecasting and Ordering Yes No Corrective Action
Order guides are used when placing orders.
Forecasting and Ordering Yes No Corrective Action
Par values are used for applicable items.
Production records from previous menu cycle are used for
forecasting production.
Only items needed to prepare menu selections are ordered.
Inventory is checked before placing orders.
Receiving Yes No Corrective Action
Site personnel follow the SOP for receiving.
Only trained employees receive food and supplies.
GTIN or product codes are checked and lot
numbers recorded when products are received.
Products sold by weight are weighed when received.
Product substitutions are not accepted unless pre-approved.
Storage and Issuing Yes No Corrective Action
Storage areas are kept locked throughout the day, especially
during meal service.
An SOP is followed for kitchen visitors and customers access to
storage and preparation areas.
An SOP is followed for proper dry, refrigerated, and freezer storage.
An SOP is followed on the issuing process.
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Inventory Management and Tracking Reference Guide
TASK STATUS
Inventory Control Yes No Corrective Action
Inventory level meets specifed goals e.g., days of inventory on hand.
Physical inventory is taken on the last day of each month.
Two employees are assigned to take physical inventories.
A perpetual inventory is maintained daily.
Product codes or GTIN, lot numbers, and storage
location are recorded in inventory records (e.g.,
perpetual inventory cards, storeroom requisition).
Storage areas are labeled with product codes and organized with
highest volume products closest to the door.
Products are kept in original cases and lot numbers are written on
inner packages (or cut from case and kept) when removed from
case.
Inventory Control Yes No Corrective Action
Heavy items are kept on lower shelves. Dollies, dunnage racks,
and carts are used to store food.
Chemicals are stored away from food and paper supplies.
Production Yes No Corrective Action
Production records are completed immediately afer each meal.
Production records are completed with
product codes or GTIN and lot numbers.
Food is prepared by cooking small batches every 30 minutes or
before each serving period.
Stockout times are recorded on production records to improve
future forecasts.
An SOP is followed for disposal of lefovers.
Service Yes No Corrective Action
Specifed portion sizes and serving utensils are used.
Sales inventory records are used on each serving line, at least for a
la carte items, to track sales of each item.
APPENDIX
65
Appendix
Appendix: Language for Bids and Processing Agreements
Recipient Agency and Distributor Agreement (Excerpts)
Food Defense Responsibilities
Distributor must have Hazard Analysis Critical Control Point (HACCP) and food defense plans on fle that may be
reviewed by school district for recall procedures. Tis should include, but not be limited to:
a) Distributor must have traceability systems in place from receipt to delivery to designated delivery site.
b) Distributor must provide evidence of conducting a mock recall for product once per year.
c) Distributor must provide 24/7 accessibility of staf in the event of a USDA Recall—individuals with contact numbers
and back ups must be provided with the bid document.
d) Distributor must have public notifcation capability on website to provide updates on USDA Recall information for
customers.
OR
e) Distributor must provide a communication plan to the school district for food recalls.
Distributor Responsibilities
Reporting and Reimbursement:
a) Distributor agrees to provide school district with a report of product usage by item code and manufacturer (in lieu of
data transfer) in a format specifc by school district.
OR
b) Te Distributor agrees to provide data transfer of product usage by item code and manufacturer to school district’s
designated system via electronic channels either daily or weekly (choose one). File format is listed below.
c) Te Distributor agrees to provide a monthly remaining USDA Foods product inventory report to the school district.
66
Inventory Management and Tracking Reference Guide
Type of Data Transmission: Fixed Length Flat File
Length Position Description
10 1-10 Distributor Number (assigned by Processor)
35 11-45 School District Name
35 46-80 School District Address1
35 81-115 School District Address2
35 116-150 City
03 151-153 State
10 154-163 Zip Code
16 164-179 Phone
20 180-199 Invoice Number (Distributor)
10 200-209 Invoice Date
18 210-227 Processor’s Product Code
18 228-245 Case Count
13 246-258 Allowance Amount
10 259-268 School number assigned by Distributor
15 269-283 School Recipient Agency # (assigned by State)
10 284-293 Catch Weight Pounds
10 294-303 Bid Number
10 304-313 Vendor number (Distributor’s number for Processor)
Note:
nNumeric values should be right justifed within data element length and should not be preceded by zeros.
nNon-numeric values and dates should be lef justifed within data element length
nDates should be in the format: 05/21/2010 (four digit year)
nUse a fle name that identifes distributor name and date (i.e., abcdistribution_093004)
Adapted from: American Commodity Distribution Association. (2010). Recipient agency commodity processing handbook. Appendix 11.
RESOURCES
67
Resources
Manuals
American Commodity Distribution Association. (2006). Food safety/food defense response plan.http://www.
commodityfoods.org/fles/FOOD%20SAFETY%20RESPONSE%20PLAN.doc
American Commodity Distribution Association. (2010). Recipient agency commodity processing handbook.http://www.
commodityfoods.org/fles/RA%20Processing%20Handbook%20-%20FINAL%20March%202010.pdf
U.S. Department of Agriculture, Food and Nutrition Service. (2004). A biosecurity checklist for school nutrition
programs: Developing a biosecurity management plan. FNS-364http://healthymeals.nal.usda.gov/hsmrs/biosecurity.pdf
U.S. Department of Agriculture, Food and Nutrition Service, & National Food Service Management Institute. (2005).
HACCP-based standard operating procedures (SOPs).
U. S. Department of Agriculture, Food and Nutrition Service, & National Food Service Management Institute. (2011).
Responding to a food recall.
Website Resources
American Commodity Distribution Associationhttp://www.commodityfoods.org/index.php
American National Standards Institute (ISO 22000:2005, ISO 22005:2007)http://www.ansi.org/
Best if Used - By – USDA Guidance for Inventory Control in Schools and Warehouseshttp://www.fns.usda.gov/FDD/facts/biubguidance.htm
Choice Plus: A Reference Guide for Foods and Ingredientshttp://www.nfsmi.org/documentlibraryfles/PDF/20080201030612.pdf
Commodity Alert System (USDA Foods recall notifcation)https://www.envoyprofles.com/USDA-ALERTS/
From Field to Fork, Archive for the ‘Traceability’ Category, Produce Marketing Association (PMA)http://feldtofork.pma.com/?cat=17
Federal Food Safety Information (commercial recall notifcation)http://www.foodsafety.gov/keep/recalls/
Food Safety and Inspection Servicehttp://www.fsis.usda.gov/About_FSIS/index.asp
68
Inventory Management and Tracking Reference Guide
Foodservice GS1 US Standards Initiativehttp://www.gs1us.org/faqs/foodservice_faqs
Food Safety Working Grouphttp://www.foodsafetyworkinggroup.gov/
Global Food Safety Initiative (GFSI)http://www.ciesnet.com/2-wwedo/2.2-programmes/2.2.foodsafety.gfsi.asp
Institute of Food Technology – Food Product Tracinghttp://www.if.org/knowledge-center/focus-areas/food-safety-and-defense/traceability.aspx
Meat Poultry Grouphttp://www.mpxml.org/
Produce Traceability Initiativehttp://www.producetraceability.org/
Recall Alerts
www.recalls.gov
Safe Quality Food Institute (Standards SQF 1000/SQF 2000)http://www.sqf.com/standards/
USDA Foods Fact Sheetshttp://www.fns.usda.gov/fdd/schfacts/default.htm
USDA Web-based supply chain managementhttp://www.fns.usda.gov/fdd/WBSCM/default.htm
REFERENCES
69
References
Alfaro, J.A., & Rabade, L.A. (2009). Traceability as a strategic tool to improve inventory management: A case study in
the food industry. International Journal of Production Economics, 111, 104-110.
American Commodity Distribution Association. (2006). Food safety/food defense response plan. Retrieved March 4,
2010 fromhttp://www.commodityfoods.org/fles/FOOD SAFETY RESPONSE PLAN.doc
American Commodity Distribution Association. (2010). Recipient agency commodity processing handbook. Retrieved
March 4, 2010 fromhttp://www.commodityfoods.org/fles/RA Processing Handbook - FINAL
March%202010.pdf
Becker, G.S. (2009, December). Te federal food safety system: A Primer. CRS Report for Congress, Congressional
Research Service, Order code: RS-26600. Retrieved April 7, 2010 fromhttp://www.nationalaglawcenter.org/assets/crs/
RS22600.pdf
Daf, L., Arcoss, A., Hallawell, A., Root, C., & D.W. Westfall. (1998). U.S. Department of Agriculture, Food and
Nutrition Service, Ofce of Analysis and Evaluation. School food purchase study. Retrieved on April 27, 2010 fromhttp://www.fns.usda.gov/ora/menu/published/FoodDistribution/FDStudies.htm
Efcient Foodservice Response. (2000). Standard product ID and bar coding: Foodservice case studies and practical
applications. Retrieved January 15, 2010 fromhttp://www.ifdaonline.org/webarticles/articlefles/544-Product_ID_and_
Barcodes_Case_Studies.pdf
Farsad,B., & LeBruto, S. (1993). A measured approach to food-inventory management. Cornell Hotel and Restaurant
Administration Quarterly, 34(3), 90-95.
Fleming, G., & Gombas, D.E. (2009). Continuous improvement trends in produce traceability. Food Safety
Magazine, April/May 2009. Retrieved on March 29, 2010 fromhttp://www.foodsafetymag-digital.com/
foodsafetymag/20090405/#pg32
Food Marketing Institute. (2008). SQF 2000: A HACCP-based supplier assurance code for the food manufacturing and
distributing industries, 6
th
ed. Retrieved on March 31, 2010 fromhttp://www.scscertifed.com/docs/SQF2000_Code_
Ed_6_August_08.pdf
Food Marketing Institute. (2010). SQF 1000: A HACCP-based supplier assurance code for the primary producer, 5
th
ed.
Retrieved on March 31, 2010 fromhttp://www.scscertifed.com/docs/SQF1000_Code.pdf
Food Safety Enhancement Act, HR 2749, 111
th
Cong. (2009).
Food Safety Modernization Act, S510, 111
th
Cong. (2009).
70
Inventory Management and Tracking Reference Guide
Food Safety Working Group. (2009). Food safety working group: Key fndings. Retrieved from on December 27, 2009
fromhttp://www.foodsafetyworkinggroup.gov/ContentKeyFindings/HomeKeyFindings.htm
Golan, E., Krissof, B., Kuchler, F., Nelson, K., and Price, G. (2004). Traceability in the U.S. food supply: Economic theory
and industry studies. Report 830. Retrieved on August 23, 2011 fromhttp://www.ers.usda.gov/publications/aer830/
aer830.pdf
Gregoire, M.B. (2010). Foodservice organizations: A managerial and systems approach. 7
th
ed. Upper Saddle River, NJ:
Pearson Prentice Hall.
Grocery Manufacturers Association. (2008). Food supply chain handbook. Retrieved on April 7, 2010 fromhttp://www.
gmaonline.org/downloads/technical-guidance-and-tools/GMA_SupplyChain2.pdf ’
GS1. (2009, February). GS1 Standards document: Business process and systems requirements for full chain traceability
Issue 1.1.0. Retrieved on December 27, 2009 fromhttp://barcodes.gs1us.org/dnn_bcec/Documents/tabid/136/
DMXModule/731/Command/Core_ViewCollection/Default.aspx
GS1. (2009, December). U.S. meat and poultry traceability: Implementation guide, Issue 1-10 22.23. Retrieved on April 7,
2010 fromhttp://www.mpxml.org/_Documents/mpXML Trace Guide June 2010.pdf
Institute of Food Technologists. (2009). Product tracing in food systems, (Executive Summary). Retrieved on December
15, 2009 fromhttp://www.if.org/knowledge-center/focus-areas/food-safety-and-defense/~/media/Knowledge%20
Center/Focus%20Areas/Traceability/ExecutiveSummary.pdf
International Food Distributors Association, & GS1 US. (2006). Foodservice and Data Synchronization. Retrieved on
April 7, 2010 fromhttp://www.ifdaonline.org/webarticles/anmviewer.asp?a=543&z=71
International Standards Organization (2005). Food safety management systems: Guidance on the application of ISO
22000:2005, 1
st
ed., ISO/TX 22004-2005(E).
Kasavana, M.L.(2010). Drive efciency with efective inventory control – Part 1 &2. Hospitality Technology. Retrieved
on March 8, 2010 fromhttp://www.htmagazine.com/ME2/dirmod.asp?sid=8D86DF469BD74C098382D9532C904D8E
&nm=&type=MultiPublishing&mod=PublishingTitles&mid=3E19674330734FF1BBDA3D67B50C82F1&tier=4&id=8
D0FA931CD2C46B99204243D9C31F86B
Miller, D. (2009). Food product traceability: New challenges, new solutions. Food Technology, 63(1), 33-36.
National Food Service Management Institute. (2000). Inventory Management for Child Nutrition Programs: 2000
breakfast lunch training. ET20-00. University, MS: Author.
National Restaurant Association. (2008). ServSafe
©
coursebook. 5
th
ed. Chicago: Author.
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Pannell-Martin,D.V. (2005). Cost control manual for school foodservices. 3
rd
ed. Aiken, SC: Author.
Produce Marketing Association. (2006). Produce traceability: A guide to implementation. Retrieved on April 7, 2010
fromhttp://www.producetraceability.org/pdfs/CPMA_PMA_Traceability_Guide.pdf
School Nutrition Association. (2009). School nutrition supply chain toolkit: A guide to efcient supply chain
management. Alexandria, VA: Author.
Stevens, E.M., (2009). Focus on food recalls: Guidelines for conducting a simulated food recall. Food Safety Magazine
Retrieved on March 29, 2010 fromhttp://www.foodsafetymagazine.com/article.asp?id=3482&sub=sub1
Surak, J.G., & Gombas, K.L. (2009). GFSI’s role in harmonizing food safety standards, Food Safety Magazine, June/July
2009. Retrieved on March 29, 2010 fromhttp://www.foodsafetymagazine.com/article.asp?id=3027&sub=sub1
Uniform Code Council (now GS1 US), Efcient Foodservice Response Supply Chain Demand Forecasting Committee.
(2003). Standard product identifcation and bar codes: Te cornerstone of EFR. Retrieved April 7, 2010 fromhttp://www.
ifdaonline.org/webarticles/articlefles/544-Product_ID_and_Barcodes_cornerstones.pdf
University of Florida, Security Research Project. (2008). National Retail Security Survey. Retrieved on February 15,
2010 fromhttp://soccrim.clas.uf.edu/criminology/srp/srp.html
U.S.Department of Agriculture, Food and Nutrition Service. (2004). A biosecurity checklist for school foodservice
programs: Developing a biosecurity management plan. FNS-364.Retrieved on August 23, 2011 fromhttp://healthymeals.
nal.usda.gov/hsmrs/biosecurity.pdf
U.S. Department of Agriculture, Food and Nutrition Service. (2008). School lunch and breakfast cost study II: Summary
of fndings. Retrieved on February 15, 2010 fromhttp://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/
MealCostStudySummary.pdf
U.S. Department of Agriculture, Food and Nutrition Service, with the National Food Service Management Institute.
(2002). First choice: A purchasing systems manual for school food service. 2
nd
ed. University, MS: National Food Service
Management Institute.
U. S. Department of Agriculture, Food and Nutrition Service, with the National Food Service Management Institute.
(2011). Responding to a food recall. University, MS: National Food Service Management Institute.
U.S. Department of Agriculture, Food and Nutrition Service, with the National Food Service Management Institute.
(2005). HACCP-based standard operating procedures (SOPs). University, MS: National Food Service Management
Institute.
72
Inventory Management and Tracking Reference Guide
U.S. Department of Agriculture, Food Distribution. (2009). National Policy Memorandum FD-020: Single inventory
and commodity issues—Clarifcation of regulatory changes and other guidance. Retrieved on December 15, 2009 fromhttp://www.fns.usda.gov/fdd/PolicyMemo/pmfd020_CNP-SingleInventory.pdf
U.S. Department of Agriculture, Food Distribution. (2009). National Policy Memorandum FD-058: Annual physical
inventory—Reconciliation of book inventory to physical inventory. Retrieved on December 15, 2009 fromhttp://www.
fns.usda.gov/fdd/policymemo/pmfd058_Annual%20Physical%20Inventory.pdf
U.S. Department of Agriculture, Food Distribution. (2009). National Policy Memorandum FD-067: School food
authorities acting as a collective unit in the control and use of donated foods (revised). Retrieved on December 15,
2009 fromhttp://www.fns.usda.gov/fdd/policymemo/pmfd067_NSLP-CollectiveUnitrev.pdf
U.S. Department of Health and Human Services, Ofce of Inspector General. (2009). Traceability in the food supply
chain. OEI-02-06-00210. Retrieved on April 23, 2010 fromhttp://oig.hhs.gov/oei/reports/oei-02-06-00210.pdf
U.S. Department of Health and Human Services, Food and Drug Administration. (2004). Protecting the U.S. food
supply: What you need to know about establishment and maintainance of records. Retrieved on February 15, 2010
fromhttp://www.fda.gov/downloads/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/
FoodDefenseandEmergencyResponse/UCM113920.pdf
ACRONYMS
73
Acronyms
AI Application identifers
AMS Agriculture Marketing Service
CDC Centers for Disease Control and Prevention
CTE Critical tracking event
DHS Department of Homeland Security
EFR Efcient Foodservice Response
EPC Electronic Product Code
EP&R Emergency Preparedness and Response
FBI Federal Bureau of Investigation
FDA Food and Drug Administration
FEMA Federal Emergency Management Agency
FERN Food Emergency Response Network
FSA Farm Service Agency
FNS Food and Nutrition Service
FSIS Food Safety and Inspection Service
GDSN Global Data Synchronization Network
GTIN Global trade item number
GLN Global location number
HACCP Hazard Analysis and Critical Control Points
HHS Department of Health and Human Services
RFID Radio frequency identifcation tag
SOP Standard operating procedure
SKU Stockkeeping unit
TCS Time and temperature control for safety
UPC Universal product code
USDA United States Department of Agriculture
74
Inventory Management and Tracking Reference Guide
GLOSSARY
75
Glossary
Application Identifers (AIs): A section of a GS1 bar code found on product packaging enclosed in parentheses used
to identify additional information such as weight, count, lot numbers, country of origin, and production date.
Adulterated: A product that has been contaminated with a foreign substance causing it to be unsafe for usage.
Batch Cooking: Preparing smaller quantities of food as needed throughout the serving period rather than preparing
the total quantity needed at one time.
Bioterrorism: Te deliberate use of biological, chemical, physical, or radioactive agents for the purpose of causing
harm.
Brown box USDA Foods: USDA Foods labeled with plain USDA labels instead of a commercial label. Te name
originated from the brown shipping boxes used to ship these products.
Carrying costs: Costs for transporting, handling, and storing inventory.
Critical tracking event (CTE): A point at which a product is moved between sites, a product is transformed, or any
point where a record is required in order to trace a product.
Cycle Menu: Menus that are repeated over a period of time e.g., every three weeks.
Cycle Counts: Physical count of a small group of randomly selected products on a periodic basis. Typically used in
high volume operations when a monthly physical inventory may not be practical.
Efcient Foodservice Response (EFR): A voluntary initiative where members of the foodservice supply chain studies
methods to eliminate waste and excess cost.
External supply chain: Members of the supply chain outside the school district including vendors, brokers, customers,
and agencies that handle products or product information.
Foodborne illness: An illness carried or transmitted to people through food.
Global Data Synchronization Network (GDSN): An internet-based network of interrelated databases containing
product information and the GS1 Global Registry that allows companies to exchange standardized and synchronized
information with their trading partners.
Global Location Number (GLN): Te GS1 Identifcation Key used to identify physical locations such as a
manufacturing plant or legal entities such as the manufacturer’s corporate ofce. Te 13-digit key is comprised of a GS1
Company Prefx, Location Reference, and Check Digit.
Global Trade Item Numbers (GTIN): Te GS1 Identifcation Key used to identify products such as a specifc brand,
unit of measure, and product code. Te key is comprised of a GS1 or UPC company prefx and an item identifcation
number.
Hazard analysis and critical control points (HACCP): A food safety system based on principles to identify, evaluate,
and control hazards.
76
Inventory Management and Tracking Reference Guide
Indirect Discount: Applying a discount for the fair market value of USDA Foods on processed products on the invoice;
also referred to as “net of invoice”.
Internal supply chain: Members of the supply chain within the school district including district-owned warehouses,
central production facilities, schools, the central school nutrition ofce, and the accounting department that handle
products or product information.
Inventory: Food and supplies purchased for an organization but not yet used.
Lot: Te batch or lot number that associates an item with information the manufacturer considers relevant for
traceability of the trade item (e.g., the time and date the product was manufactured).
Par Value: Te amount of product needed to fulfll menu requirements for one ordering period plus a small amount
for safety stock.
Perpetual Inventory: Continuous recording of all receipts and issues of products in storage providing a balance of each
item at all times.
Physical Inventory: Periodic actual count of products in storage areas.
Radio Frequency Identifcation Tag (RFID): An electronic tag encoded with an Electronic Product Code (EPC) used
to identify products within a supply chain. Te 14-digit GTIN number was designed so that it could be used as an EPC
code in RFID tags.
Recall: A process used to remove products from the marketplace when there is reason to believe the products may be
contaminated, misbranded, or cause health problems.
Safety Stock: A small amount of product kept on hand to accommodate an unexpected rise in customer demand or a
late delivery.
Shelf Life: Length of time a food may be stored before safety or quality is diminished.
Shrink: Loss of product due to waste, damage, spoilage, and thef.
Single Inventory Method: Maintenance of a single inventory for all food and supplies, including USDA Foods.
Standard Operating Procedure (SOP): Detailed written instructions for a process that must be followed to ensure a
desired outcome.
Stockkeeping units (SKU): An item of stock that is completely specifed as to size, favor, color, recipe, and any other
attribute (e.g., two favors of gelatin are diferent SKUs).
Stockouts: Running out of a stockkeeping unit when there is still demand for the item.
Supply chain: Te system of interrelated departments, businesses, and agencies through which products, services, and
product information fows beginning with raw materials and ending with the fnal customer.
Supply chain orientation: An organization’s ability to build and maintain a culture and value system that supports
relationships with supply chain partners.
GLOSSARY
77
Time and temperature control for safety (TCS) foods: Foods that need time and temperature controls to prevent the
product from becoming unsafe due to biological hazards.
Traceability: Te ability to trace the history, use, or location of a product.
Trace back or trace: Te ability to determine the origin attributes or history of an item in the supply chain by
referencing records held by each entity.
Trace forward or track: Te ability to determine the path a traceable product takes through the supply chain on its way
to the end customer.
Universal Product Codes (UPC): A 12-digit GTIN bar code used to uniquely identify a product and the company that
owns the product brand.
USDA Foods: Foods purchased by USDA for use in school nutrition programs.
doc_714262167.pdf
Inventory management has long been considered a critical component of a well-managed school nutrition program. According to a United States Department of Agriculture (USDA) cost study, 46 % of school nutrition program revenue is spent on food (USDA, 2008).
Inventory
Management
and Tracking
National Food Service Management Institute
The University of Mississippi
Item Number ET109-12
2012
Reference Guide
Inventory
Management
and Tracking
National Food Service Management Institute
The University of Mississippi
Item Number: ET 109-12
2012
Reference Guide
Tis project has been funded at least in part with Federal funds from the U.S. Department of Agriculture, Food and Nutrition
Service through an agreement with the National Food Service Management Institute at Te University of Mississippi. Te contents
of this publication do not necessarily refect the views or policies of the U.S. Department of Agriculture, nor does mention of trade
names, commercial products, or organizations imply endorsement by the U.S. government.
Te University of Mississippi is an EEO/AA/TitleVI/Title IX/Section 504/ADA/ADEA Employer.
In accordance with Federal law and U.S. Department of Agriculture policy, this institution is prohibited from discriminating on the
basis of race, color national origin, sex, age, or disability.
To fle a complaint of discrimination, write USDA, Director, Ofce of Civil Rights; Room, 326-W, Whitten Building, 1400
Independence Avenue, SW, Washington, DC 20250-9410 or call (202) 720-5964 (voice and TDD). USDA is an equal opportunity
provider and employer.”
© 2012, National Food Service Management Institute, Te University of Mississippi
Except as provided below, you may freely use the text and information contained in this document for non-proft or educational
use providing the following credit is included
Suggested Reference Citation:
National Food Service Management Institute. (2012). Inventory management and tracking reference guide). University,
MS: Author.
Te photographs and images in this document may be owned by third parties and used by Te University of Mississippi under a
licensing agreement. Te University cannot, therefore, grant permission to use these images. For more information, please contact
[email protected].
Education and Training Division
Information Services Division
Te University of Mississippi
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P.O. Drawer 188
University, MS 38677-0188
Applied Research Division
Te University of Southern Mississippi
118 College Drive #5060
Hattiesburg, MS 39406
Phone: 601-266-5773
Fax: 888-262-9631
National Food Service Management Institute
The University of Mississippi
Building the Future Through Child Nutrition
Te National Food Service Management Institute was authorized by Congress in 1989 and established in 1990 at Te
University of Mississippi in Oxford and is operated in collaboration with Te University of Southern Mississippi in
Hattiesburg. Te Institute operates under a grant agreement with the United States Department of Agriculture, Food
and Nutrition Service.
PURPOSE
Te purpose of the National Food Service Management Institute is to improve the operation of child nutrition
programs through research, education and training, and information dissemination.
MISSION
Te mission of the National Food Service Management Institute is to provide information and services that promote
the continuous improvement of child nutrition programs.
VISION
Te vision of the National Food Service Management Institute is to be the leader in providing education, research, and
resources to promote excellence in child nutrition programs.
CONTACT INFORMATION
Headquarters
Administration Division
Te University of Mississippi
Phone: 800-321-3054
Fax: 800-321-3061
www.nfsmi.org
ACKNOWLEDGMENTS
WRITTEN AND DEVELOPED BY
Julie Boettger , PhD, RD
GRAPHICS BY
Carole van Almelo
Amy Howell
TASK FORCE MEMBERS
Sincere appreciation is expressed to those who contributed their time and expertise to plan these materials.
REVIEWERS
Sincere appreciation is expressed to those who contributed their time and expertise to review these materials.
EXECUTIVE DIRECTOR
Katie Wilson, PhD, SNS
TABLE OF CONTENTS
1
Table of Contents
INTRODUCTION ................................................................................... 3
Inventory management best practices ................................................................................................. 4
Tools for inventory management ......................................................................................................... 4
Traceability systems ................................................................................................................................ 5
Traceability practices .............................................................................................................................. 5
Scope and overview ................................................................................................................................ 5
Organization of information ................................................................................................................. 5
CHAPTER 1 – School Nutrition Supply Chain ........................................ 7
Supply Chain Orientation ..................................................................................................................... 7
Internal Supply Chain ............................................................................................................................ 8
External Supply Chain ........................................................................................................................... 9
Flow of Information ............................................................................................................................. 10
CHAPTER 2 – Basis of Inventory Control ..............................................11
Role of Inventory Management .......................................................................................................... 11
Customer Service .................................................................................................................................. 12
Efciency ............................................................................................................................................... 12
Financial Management ........................................................................................................................ 13
Managing Quantities ............................................................................................................................ 13
Food Safety ............................................................................................................................................ 14
CHAPTER 3 – Traceability ..................................................................... 17
Current Climate .................................................................................................................................... 17
What is Traceability? ............................................................................................................................ 18
Federal Oversight Priorities ................................................................................................................ 18
Voluntary Initiatives ............................................................................................................................. 19
Legislation ............................................................................................................................................. 20
Benefts ................................................................................................................................................... 20
Barriers ................................................................................................................................................... 21
Get Ready For the Future .................................................................................................................... 21
Item Identifcation ................................................................................................................................ 22
Voluntary Standards ............................................................................................................................. 24
Critical Tracking Events and Recordkeeping .................................................................................... 25
Internal and External Traceability ...................................................................................................... 25
Role of Technology ............................................................................................................................... 26
2
Inventory Management and Tracking Reference Guide
CHAPTER 4 – Best Practices for Inventory Control ............................. 27
Menu Planning ..................................................................................................................................... 28
Procurement .......................................................................................................................................... 28
Forecasting and Ordering .................................................................................................................... 29
Receiving ............................................................................................................................................... 30
Storage and Issuing ............................................................................................................................... 31
Inventory Control Records .................................................................................................................. 33
Production ............................................................................................................................................. 35
Service .................................................................................................................................................... 36
Summary ............................................................................................................................................... 38
CHAPTER 5 – Responding to Food Emergencies including Recalls .... 39
Preparing for Problems ........................................................................................................................ 39
Identifying Stakeholders and Teir Responsibilities ....................................................................... 40
Commercial Products .......................................................................................................................... 42
USDA Foods (Brown Box and Processed) ........................................................................................ 43
CHAPTER 6 – Standard Operating Procedures ................................... 45
Inventory Management and Tracking Checklist .............................................................................. 60
APPENDIX .............................................................................................65
Language for Bids and Processing Agreements ................................................................................ 65
RESOURCES .......................................................................................... 67
REFERENCES ........................................................................................69
ACRONYMS .......................................................................................... 73
GLOSSARY ............................................................................................. 75
Introduction
3
Introduction
TERMINOLOGY
Bioterrorism: Te deliberate use of biological, chemical, physical, or radioactive agents for the purpose of causing
harm.
Foodborne illness: An illness carried or transmitted to people through food.
Hazard analysis and critical control points (HACCP): A food safety system based on principles to identify,
evaluate, and control hazards.
Recall: A process used to remove products from the marketplace when there is reason to believe the products may
be contaminated, misbranded, or cause health problems.
Standard Operating Procedure (SOP): Detailed written instructions for a process that must be followed to ensure
a desired outcome.
Supply chain: Te system of interrelated departments, businesses, and agencies through which products, services,
and product information fows beginning with raw materials and ending with the fnal customer.
Time and temperature control for safety (TCS) foods: Foods that need time and temperature controls to prevent
a product from becoming unsafe due to biological hazards.
Traceability: Te ability to trace the history, use, or location of a product.
Trace back or trace: Te ability to determine the origin attributes or history of an item in the supply chain by ref-
erencing records held by each entity.
Trace forward or track: Te ability to determine the path a traceable product takes through the supply chain on its
way to the end customer.
Inventory management has long been considered a critical component of a well-managed school nutrition program.
According to a United States Department of Agriculture (USDA) cost study, 46 % of school nutrition program revenue
is spent on food (USDA, 2008). Controlling this prime cost has been the focus of classic inventory management
practices. More recently, food safety and security issues have added a need for traceability or the ability for schools to
trace food products back to their source and trace them forward to the end consumer. Te Inventory Management and
Tracking Reference Guide presents information about inventory management and tracking that may be new to school
nutrition operators and updates information about traditional inventory management in light of new traceability
expectations.
Recalls of beef, spinach, tomatoes, and peanuts have been in the headlines afer sickening hundreds of people. Quick
response to trace back to the source of contamination and trace forward to warn potential consumers is crucial for
safeguarding public health. More recently, the number and frequency of food product recalls has required school
districts to respond to these incidents by identifying recalled products and determining if they have been received by
the districts, served, or still in stock.
During the last few years, food safety concerns have driven new initiatives that impact inventory control practices.
Te Child Nutrition and WIC Reauthorization Act of 2004 requires schools to implement food safety plans based on
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Inventory Management and Tracking Reference Guide
Hazard Analysis and Critical Control Points (HACCP). Traceability should be incorporated into standard operating
procedures (SOPs) contained in food safety plans because both the source for food products implicated in foodborne
illness and the ability to track the storage, production, and service of food products is critical in controlling the spread
of illness.
Te need to trace and track products is not limited to food recalls and foodborne illness. Security of our food supply
has come under scrutiny since terrorist attacks in 2001. In response to potential risk to our food supply from terrorism
attacks, Congress passed the Public Health Security and Bioterrorism Preparedness and Response Act of 2002
(Bioterrorism Act) that requires all food processing businesses to track specifc information about where food was
sourced and where it was delivered, also called “one step forward, one step back.”
For these reasons, the food industry is taking a fresh look at ways to track and streamline the fow of food and
information related to food sales. Although schools are exempt from the Bioterrorism Act, it is important that school
districts receive and understand information from their suppliers that ensures the ability to trace and track products
within their own establishment. New standards for product identifcation that schools can use to improve management
of their inventory have begun to emerge from these industry eforts.
Te ability to track food products across the supply chain is at the center of modern inventory management in
school nutrition programs. Te goals of this guide are to incorporate food product tracking into standard inventory
management practices addressing cost efciencies, food safety, and efective responses to recalls, foodborne illness, and
bioterrorism. Tis will allow a more proactive approach to food tracking rather than just reacting to recalls. Te goals
of the Inventory Management and Tracking Reference Guide are to:
n identify inventory management best practices;
n provide tools for inventory management;
n introduce traceability and tracking systems; and
n advance traceability practices in school nutrition programs.
Inventory management best practices
Efective inventory control begins before products are purchased. Efective menu planning and recipe development
is the frst step in inventory management. Menu planning and recipe development should utilize a minimum of
products while providing enough variety to maximize customer satisfaction and good nutrition. Procuring, forecasting,
ordering, and receiving ensure that the right foods in the correct quantities are received just in time for production.
Storage practices keep food secure and minimize waste. Efective and efcient production and service practices
ensure that customers consistently receive desired foods freshly prepared, served in correct portions, and in a safe
environment.
Tools for inventory management
Good inventory management may require new tools to help one succeed. Tese tools can be customized to meet the
needs of your organization and will give you a quicker path to implementation of recommended best practices. Report
templates, bid language, sample standard operating procedures, checklists, and resources are included in this guide.
Introduction
5
Traceability systems
Traceability or the ability to track food items back to their original source may be a new concept for employees in
school nutrition programs. It encompasses recording delivery dates, delivery agent information, quantity, product
codes, and lot numbers for items received by the school, as well as the disposition of the product.
Traceability practices
Although schools are not currently required to keep records that would help them track food products, advancements
in product tracking made by suppliers have made product tracking more feasible for schools. Recent incidents of food
recalls also may make product tracking a high priority in order to assure the safety of foods served in schools.
Scope and overview
Te Inventory Management and Tracking Reference Guide takes a systems approach to inventory control by looking
at all functions related to inventory management from the procurement process through the service of meals. Te
individual school nutrition program is part of a large supply chain that starts at the farm and ends with consumption of
food and disposal of waste. Most school nutrition programs are at the end of this chain, but districts that supply food
to other organizations (day care or senior programs that are outside the school district) may be in the middle of the
supply chain with additional responsibility for tracking and tracing food for the organizations they serve. Te ability
to follow modern inventory management practices depends on having a supply chain point of reference because many
efective controls rely on diferent members, such as manufacturers and distributors, all along the supply chain.
Tis guide includes information about traditional inventory management practices designed for efciency and cost
control as well as newer inventory management practices such as inventory tracking required for responding to
emergencies including product recalls, foodborne illness incidents, and threats of bioterrorism. Te information is
presented in six chapters: 1) school nutrition supply chain, 2) basis of inventory control, 3) food traceability, 4) best
practices in inventory control, 5) standard operating procedures, and 6) responding to recalls and food emergencies.
Organization of information
Each chapter in this guide contains four parts:
n terminology,
n introduction and background,
n special notes for districts with warehouses and/or central kitchens, and
n tools and approaches for three levels:
n basic approaches that all can/must do,
n best practices, and
n advanced approaches or trends (e.g., use of technology).
Reading the Inventory Management and Tracking Reference Guide will give you new perspectives on inventory control
and resources to help you implement improvements in your inventory management system.
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Inventory Management and Tracking Reference Guide
CHAPTER 1: School Nutrition Supply Chain
7
C H A P T E R 1
School Nutrition Supply Chain
TERMINOLOGY
External supply chain: Members of the supply chain outside the school district including vendors, brokers,
customers, and agencies that handle products or product information.
Internal supply chain: Members of the supply chain within the school district including district-owned
warehouses, central production facilities, schools, the central school nutrition ofce, and the accounting
department that handle products or product information.
Supply chain orientation: An organization’s ability to build and maintain a culture and value system that supports
relationships with supply chain partners.
USDA Foods: Foods purchased by USDA for use in school nutrition programs.
Supply Chain Orientation
Historically, school nutrition programs have stayed within their own four walls when considering changes that make
their operation safer or more efcient. One of the most recent changes in business strategy is that businesses no longer
operate as individual entities, but rather work in partnerships across the supply chain. Although referred to as a chain,
this group of entities is better described as a system of interrelated departments, businesses, and agencies through
which products, services, and product information fow (Exhibit 1-1).
EXHIBIT 1-1 Example school nutrition supply chain
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Inventory Management and Tracking Reference Guide
In school nutrition programs, the supply chain includes internal members throughout the school district. Tese
members may include the central school nutrition ofce, school kitchens, transportation, business ofce, purchasing
department, and district warehouses. External members of the school nutrition supply chain include suppliers
(distributors, vendors, or farmers), state and federal agencies, and perhaps outside customers such as daycare or senior
centers.
Unnecessary expenses or safety hazards incurred anywhere along the supply chain will increase costs and risks to
safety for the end customer. Terefore, a modern approach to inventory management is to reduce the cost of waste and
ensure safety across the supply chain while maximizing value to school nutrition customers.
Internal Supply Chain
Internal supply chain members include any unit or functional area within the school district that shares information
or products with the school nutrition program. Tis includes functional areas within school nutrition such as menu
planning, purchasing, production, transportation, and service as well as other departments within the district that
utilize information about food and supply products such as accounts payable and purchasing. Te internal supply chain
will be diferent from district to district and may even be diferent within a single district based on the type of product
purchased.
Mapping out one’s primary internal supply chain is similar to mapping the fow of food for food safety plans and is
important when considering inventory management improvements. It is unproductive to map out the supply chain
of every product; however, it is productive to consider whether or not having multiple supply chain confgurations
is necessary, or efcient. Internal supply chains for most districts will be simple, consisting of a central ofce where
purchasing decisions are made and sites where food is directly delivered, stored, prepared, and served (Exhibit 1-2).
EXHIBIT 1-2 Example of internal school nutrition supply chain
CHAPTER 1: School Nutrition Supply Chain
9
Note for districts with warehouses or central/base kitchens: Utilizing central production and distribution
facilities adds complexity to the internal supply chain. Mapping one’s supply chain for commercial food and
supplies and USDA Foods can bring clarity to wasted steps in procurement, storage, and distribution. Include
transport vehicles going into and out of each facility when mapping the supply chain. Also note whether facilities
are managed by school nutrition or another department in the district.
External Supply Chain
Te external supply chain includes any organization that interacts directly or indirectly with school nutrition programs by:
n growing or raising raw ingredients,
n processing USDA Foods and other ingredients into fnished products,
n packaging fnished products,
n storing food or supplies, or
n delivering food or supplies.
It also includes organizations that share product information with school nutrition programs such USDA Foods
product specifcations, available USDA Foods and delivery dates from state agencies, brokers, and purchasing
cooperatives. Te supply chain may include external customers of the school nutrition program such as private day care
facilities, charter schools, summer feeding sites, or senior programs.
Similar to the internal supply chain, confguration of external supply chains will vary from district to district. Te
school nutrition supply chain is complex in large part due to the number of agencies involved with procuring, ordering,
processing, storing, and delivering both commercial foods and USDA Foods. Even when the fow of products is
relatively simplistic, the fow of information remains complex (Exhibit 1-3).
EXHIBIT 1-3 Example of external school nutrition supply chain
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Inventory Management and Tracking Reference Guide
Flow of Information
Although most people think only of the fow of food products when considering a supply chain, the fow of
information and services also is a consideration. For example, serving salad dressing manufactured with USDA Foods
requires a series of events involving many supply chain members including farmers, manufacturers, distributors,
USDA and HHS, the state distributing agency, and perhaps even a third party such as a purchasing cooperative. Te
ingredients and end product may fow only through the farmers, manufacturers, distributors, into the school district,
however, information about costs, ingredients, specifcations, and ownership will pass through many more entities
adding to the complexity of the supply chain.
Many barriers exist that impede efective communication of essential information among supply chain members
including lack of:
n shared understanding of terminology and standardized information such as product codes and other product identi-
fers,
n knowledge of what information each entity needs, and
n efcient means of transferring information.
Addressing these barriers will help reduce errors, speed the fow of information, and ultimately reduce costs while
ensuring that school nutrition programs receive the safe and high quality products they expect. Te ability to efectively
share product information is essential for traceability and modern inventory management.
CHAPTER 2: Basis of Inventory Control
11
C H A P T E R 2
Basis of Inventory Control
TERMINOLOGY
Assets: Total inventory stored in schools.
Carrying costs: Costs for transporting, handling, and storing inventory.
Inventory: Food and supplies purchased for an organization but not yet used.
Lot: Te batch or lot number that associates an item with information the manufacturer considers relevant for
traceability of the trade item (e.g., the time and date the product was manufactured).
Par (Periodic automatic replacement) Value: Te amount of product needed to fulfll menu requirements for one
ordering period plus a small amount for safety stock.
Safety Stock: A small amount of product kept on hand to accommodate an unexpected rise in customer demand
or a late delivery.
Shelf Life: Length of time a food may be stored before safety or quality is diminished.
Shrink: Loss of product due to waste, damage, spoilage, and thef.
Stockkeeping units (SKU): An item of stock that is completely specifed as to size, favor, color, recipe, and any
other attribute (e.g., two favors of gelatin are diferent SKUs).
Stockouts: Running out of a SKU when there is still demand for the item.
Role of Inventory Management
Food and supplies purchased, but not immediately used (inventories), ofen represent a signifcant portion of
operational revenue. One classic method of controlling food cost is to maintain inventory levels high enough to ensure
menu items can be produced in the right quantity, but low enough to not have excess product sitting in storage. Tis is
called inventory control.
Excess inventory can result in increased waste from foods that spoil, are pilfered, or simply wasted due to
overproduction or obsolescence. When inventory is high, it is harder to keep track of what products are on hand, more
storage space is required, money is tied up, and it is harder to control waste than when inventory is kept at low levels.
Tis is true for both raw ingredients and fnished products. Te value of waste may be tracked on production records,
or by maintaining a waste report.
On the other hand, not producing enough of each menu item, whether due to lack of raw ingredients or inadequate
forecasting, leads to customer disappointment and may violate program regulations. Te goal is to have all choices
available to students but not have excessive amounts lefover. Although the concept appears simple, it requires careful
planning, standardized procedures, and monitoring to achieve desired results.
In the past managers only needed to consider inventory control for their own facility in order to control costs. Te
age of supply chain management, however, has made school nutrition operators more aware of the cost of inventory
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Inventory Management and Tracking Reference Guide
across the supply chain and the efect it has on end costs. Producers, manufacturers, and distributors experience lower
margins and waste when anticipated sales do not materialize resulting in excess inventories of product. Tis cost is
passed along to the school district, which is why using predictable buying patterns will lower food costs to schools.
Efective inventory management can achieve several goals. Te frst is preserving food quality. Receiving the right
quantity of product shortly before products are served ensures freshness. Also, training employees to check product
codes ensures that products meet specifcations resulting in the expected quality. Other goals include:
n maintaining a high level of customer service,
n maximizing efciency,
n managing fnances,
n reducing the space and cost related to storage,
n limiting the loss in the case of recalls or disaster,
n controlling the quantities of food and supplies on-hand, and
n keeping foods safe.
Customer Service
One important aspect of good customer service is to have daily advertised menu items by controlling stockouts.
Customers are disappointed when their favorite products run out and when acceptable substitutions are not available.
Also, some customers have allergies or other dietary restrictions and their health depends on the right products being
available. Substituting a peanut oil for vegetable oil may literally mean life or death for some customers.
Good customer service also requires the delivery of product that is fresh. Although they may be safe to eat, serving
products past their use-by date call into question the quality of all products. Serving lefovers resulting from inaccurate
forecasting also erodes the perception of quality.
Finally, ofering a product mix with enough variety to maximize participation contributes to good customer service.
However, it is also important to limit variety to those products that provide sufcient sales in order to maintain
operational efciency. Making small quantities of product increases labor and reduces efciency.
Efciency
Another aspect of inventory management is efcient product handling. Te design of the facility, especially the location and
arrangement of storage areas can afect the ease with which products are delivered to production areas, as well as the security
of inventory. Designing inventory forms to match the layout of storage areas can reduce the time needed to count inventory.
Examples of practices that can be used to increase efciency include:
n reducing the number of items or stockkeeping units (SKUs) that need to be ordered, handled, and stored resulting in
decreased handling time;
n eliminating items with low volume;
n consolidating common types or styles of food such as using the same chicken patties for more than one entrée;
and
n using purchasing reports from vendors or sofware systems to determine the number of cases purchased of each item.
CHAPTER 2: Basis of Inventory Control
13
Financial Management
One of the most important goals of inventory management is improved fnancial control. Te fnancial goal of
inventory management is to ensure that the maximum value is generated from food and supply investments. In
addition to the actual cost of acquiring inventory, costs are associated with transporting and storing inventory.
Tese costs are called carrying costs and may include storage rental, utilities, insurance, cost of shrinkage, cost of
obsolescence, cost of wages and benefts for labor to move and count stock, and opportunity cost - how much more you
could have earned if the money were spent elsewhere.
Note for districts with warehouses: In order to determine if you have received products for the lowest cost, it is
important that warehouse carrying costs be calculated. A cost per case may then be calculated. Te cost per case
should be added to the price paid for each case of product to give you a total case cost. Tis cost can be compared to
the price to purchase the same item direct shipped to the school site. Te question you need to ask: Is it cheaper for
you to manage a warehouse or have a distributor manage the warehousing of food and supplies for you?
According to the National Retail Security Survey (2009), shrinkage in the U.S. is calculated at 1.5% of sales. Shrinkage
is the cost of loss due to waste, thef, spoilage, and other product loss. It is estimated that 44% of shrinkage in retail
operations is due to employee thef and 35% due to shoplifing. Te remaining 21% can be attributed to spoilage,
damage, shipping errors, misplaced product, and vendor fraud. Although there are no studies related to shrinkage in
school nutrition programs, the use of sofware for tracking perpetual inventory makes it easier to determine shrink
rate in school nutrition programs. Manual calculations are time consuming and may be difcult for most districts. No
matter what approach is used, it is important to monitor inventory in order to reduce shrinkage.
Managing Quantities
Te correct quantity of inventory is the level at which sufcient product can be produced to meet customer demands
– no more, no less. Some safety stock, a small cushion of inventory for unpredicted usage, is necessary to prevent sites
from running out of food. For many products, this may mean setting a periodic automatic replacement (par) level or
a reorder point. Par levels are usually set for items served daily such as milk, common ingredients used in multiple
recipes (e.g., sugar, four, spices), chemicals, and paper supplies. For entrees, fruits, vegetables, and bread products it is
best to project serving quantities for the week’s menu.
Common measures of inventory efciency are the number of days of inventory on hand and turnover rate. Te days of
inventory on hand and turnover rate are calculated:
Ending inventory ÷ average daily food cost = days of inventory on hand
Number of serving days ÷ days of inventory on hand = turnover rate
A school that receives a weekly delivery for most products should keep no more than 7-10 days of inventory on hand
and have a turnover rate of 2 – 3 (Pannell-Martin, 2005). Both of these metrics can help determine if a school site or
warehouse is carrying too much inventory. Setting district goals for these metrics can help site managers better manage
inventory.
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Inventory Management and Tracking Reference Guide
Food Safety
Food safety is a critical consideration in inventory management. It is very important to protect food inventories
from both unintentional and intentional contamination. Proper placement of product in storage areas can ensure
that raw products do not cross-contaminate food that will receive no further cooking as well as prevent accidental
contamination from chemicals. Standardized, HACCP-based receiving practices protect customers from products that
have not been held at proper temperatures or have been damaged during transport.
Recently, intentional contamination or food defense threats such as bioterrorism have caused the need for additional
measures. It is important to verify that food and supplies are secured throughout transit and storage. Security practices
include recording the names of individuals who handle food as well as locking and limiting access to storage areas and
transport vehicles at all times. School nutrition employees must be able to identify:
n product numbers,
n lot numbers,
n when the products were delivered, and
n from whom the product was received.
Procedures must be in place to track and record specifc food product numbers and lot numbers from the date received
to the date served to customers. A new industry-wide focus on traceability has resulted in a standard method of
product identifcation that is gaining adoption throughout the food industry. Te Global Trade Item Number (GTIN)
along with a lot number can be used in the event of a foodborne illness, recall, or terrorism threat. Tis is discussed in
depth in Chapter 3.
Note to districts with central kitchen and/or warehouses: Additional records will be required to ensure that
products transported between sites within the school district as well as to sites outside of the school district can
be tracked.
Proper storage practices ensure foods are kept safe and shelf life is maximized. Ideal storage temperatures vary based
on the type of food. Although refrigerated foods should be held between 32°F and 40°F, temperatures near 32°F may
freeze produce whereas this temperature may be ideal for meat and fsh. Products requiring colder temperatures should
be placed near the back of the cooler where temperatures are cooler. Termometers should be placed both near the
door and at the back of the cooler to adequately monitor proper holding temperatures. Keep in mind that holding
temperatures refer to the temperature of the food, not the air temperature of the cooler. Cooler air temperatures should
be 2°F below recommended product temperatures.
Interpreting product dating and shelf life can be confusing. Four types of dates may be found on product packaging
and each type has a diferent meaning:
n “Sell-By” is the last date products should be displayed for sale. Although the product may still be safe, the quality
starts to diminish once this date passes.
n “Best If Used By (or Used Before)” is peak quality date. It does not mean the product is unsafe or unft to eat beyond
this date.
n “Use-By” is the last date recommended by the manufacturer for consuming the product for best quality.
CHAPTER 2: Basis of Inventory Control
15
n “Closed or coded dates” are packing numbers used by the manufacturer. Tese may be perpetual calendar dates with
each day of the year given a consecutive number with January 1 coded as 001 or some variation of a date such as
20100615 representing June 15, 2010.
n It is not unusual for pack dates to be several months before schools receive the product due to harvest schedules.
Tese dates are not intended to be interpreted as “Use By” dates; however, they are ofen needed for recalls.
None of the four types of dating indicates that a product is unsafe to eat. Ideal food storage temperatures and shelf
life for various food products may be found in USDA Use-By Guidance, Choice Plus: A Reference Guide for Foods and
Ingredients, and USDA Foods Fact Sheets (internet links may be found under Resources).
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Inventory Management and Tracking Reference Guide
CHAPTER 3: Traceability
17
C H A P T E R 3
Traceability
TERMINOLOGY
Application Identifers (AIs): A section of a GS1 Data Bar Expanded or GS1-128 bar code found on product
packaging enclosed in parentheses used to identify additional information such as weight, count, lot numbers,
country of origin, and production date (GS1, 2009 February).
Adulterated: A product that has been contaminated with a foreign substance causing it to be unsafe for usage.
Brown box USDA Foods: USDA Foods labeled with plain USDA labels instead of a commercial label. Te name
originated from the brown shipping boxes used to ship these products.
Critical tracking event (CTE): A point at which a product is moved between sites, a product is transformed, or
any point where a record is required in order to trace a product.
Efcient Foodservice Response (EFR): A voluntary initiative where members of the foodservice supply chain
studied methods to eliminate waste and excess cost from the foodservice supply chain.
Global Data Synchronization Network (GDSN): An internet-based network of interrelated databases containing
product information and the GS1 Global Registry that allows companies to exchange standardized and
synchronized information with their trading partners.
Global Location Number (GLN): Te GS1 Identifcation Key used to identify physical locations such as a
manufacturing plant or legal entities such as the manufacturer’s corporate ofce. Te 13-digit key is comprised of a
GS1 Company Prefx, Location Reference, and Check Digit (GS1, 2009 February).
Global Trade Item Numbers (GTIN): Te GS1 Identifcation Key used to identify products such as a specifc
brand, unit of measure, and product code. Te key is comprised, at a minimum, of a GS1 or GS1 US UPC
company prefx and an item identifcation number (GS1, 2009 February).
Radio Frequency Identifcation Tag (RFID): An electronic tag encoded with an Electronic Product Code (EPC)
used to identify products within a supply chain. Te 14-digit GTIN number was designed so that it could be used
as an EPC code in RFID tags.
Universal Product Codes (UPC): A bar code with a 12-digit GTIN used to uniquely identify a product and the
company that owns the product brand.
Current Climate
Since the terrorist attacks in 2001, the ability to track the source of foods and the hands that products have passed
through on the way to consumers has been a concern. Te vulnerability of the food supply provides opportunities
for intentional contamination of food. In the last few years, the need to track food has intensifed due to large-scale
recalls of products such as beef and peanuts. Te need to identify the source of foodborne illness and reduce the risks
associated with contamination, improper labeling, and product tampering are making traceability an emerging issue.
Te agriculture and food industries are linked through traceability. Take the example of a school that receives ground beef. Is
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Inventory Management and Tracking Reference Guide
it beyond the realm of reality to expect that the ground beef could be traced back to a specifc herd of cattle or even a specifc
animal within 48 hours? We may be closer to this reality than you think! Technology provides the capability to identify and
track animals as they are transported from their origin, through processing, and delivery to school nutrition operations.
What is Traceability?
Traceability is the ability to track a specifc food within the supply chain, ideally from “farm to fork”. It requires keeping
sufcient records within each establishment that grows, processes, or handles food throughout the supply chain to be
able to trace back from any point where the food originated or trace forward to fnd who purchased the product. Tis
capability requires that each member of the supply chain keeps a detailed record of cases of product they purchase, as
well as cases of product that they sell.
In order to implement traceability, organizations across the supply chain need to be able to identify food items, capture the
information accurately, and share the information with other supply chain partners. Tis activity requires standards for all
three functions. First, all supply chain members must be able to identify products using a common description or number
such as Global Trade Item Number (GTIN). Ten information needs to be accurately captured in a standard format that
identifes the type of data to collect. Finally, this information needs to be stored in a manner that it may be shared with others,
for example, a comma delimited fle, spreadsheet, or database. A good example of standardization used for electronic transfer
of information may be found on the Produce Traceability Initiative (PTI) website listed in the resource section of this guide.
Federal Oversight Priorities
At the federal level, the Department of Health and Human Services (HHS) and the Department of Agriculture (USDA)
share food safety responsibilities through various agencies within their departments. Te Environmental Protection
Agency (EPA) provides oversight for the public water systems. Te Department of Homeland Security (DHS) becomes
involved if terrorism is suspected. Te Department of Defense (DOD) could be called if an incident occurred in a DOD
school or if the DOD fresh produce program were involved. Unprecedented communication and cooperation among
these agencies has occurred over the past few years as the vulnerability of our food supply has been questioned.
Te Food and Drug Administration (FDA) of HHS and USDA’s Food Safety and Inspection Service (FSIS) have
responsibility for regulating the U.S. food supply to keep food safe. FSIS is responsible for inspecting and regulating
meats, poultry, egg products, and catfsh and FDA is responsible for all other food products. In addition, there are
many state and local agencies that also inspect and regulate food processing. Any of these agencies may determine that
a product has been contaminated or adulterated and request that the manufacturer initiate a recall, however, FDA has
the power to require a food product recall if eforts to get the manufacturer to issue a voluntary recall are unsuccessful.
In the event of a problem that involves USDA Foods, these agencies involve the Food and Nutrition Service (FNS),
the Agriculture Marketing Service (AMS), or the Farm Service Agency (FSA) to help determine if USDA Foods are
involved either through the brown box program or a national processing agreement. If it is suspected that USDA Foods
may be involved in a recall, the state distributing agencies are contacted by FNS because they are the initial recipients
of these products. Te state distributing agency will then contact the recipient agencies that received the product. DOD
may also be involved in the recall if produce they purchased is recalled.
Although several industry initiatives, such as the Foodservice GS1 US Standards Initiative, Produce Traceability
Initiative, and the mpXML Group (Meat and Poultry), are underway to improve food traceability, FDA and FSIS do not
have the power to enforce expanded traceability. Both agencies are actively involved in voluntary traceability initiatives
as well as new tracking policy legislation included in the Food Safety Modernization Act of 2010 (FSMA) that requires
CHAPTER 3: Traceability
19
FDA, in consultation with USDA, to establish a product tracking system to rapidly track and trace food that is in the
United States.
Te Bioterrorism Act of 2002 requires any company that manufactures, processes, distributes, receives, holds, or
imports food products to keep records on the source of food and the recipients of food from their establishment. Tis is
ofen referred to as “one step back, one step forward” because the company goes one link back in the supply chain and
one link forward. When there is reasonable belief that food is adulterated, companies are required to allow FDA and
FSIS access to these records within 24 hours if requested. Non-proft food establishments are exempt from establishing
new records, but still must produce existing records when requested.
Although companies may comply with the “one step forward, one step back” provision of the Bioterrorism Act,
governmental agencies coordinate the tracing in the event of an incident such as a foodborne illness outbreak. If we
do not enable these agencies to do their jobs efectively, then more people may be exposed to foodborne illness. If
everyone has diferent information tied to the product, or if information is not consistently stored in their systems,
the tracking done by the government agency will be protracted due to inconsistent information, inconsistent record
keeping, manual records, and proprietary standards. Te longer it takes an agency to perform trace back, the larger and
broader the recall becomes. Tis means that it is not only important to capture information associated with product
tracking it must be stored in a manner that makes it easy to share with other members of the supply chain.
Voluntary Initiatives
For over 40 years food companies have standardized product identifcation in the grocery industry by using Universal
Product Codes (UPC). Tis practice has led to greater efciency in the grocery industry. Hoping to achieve similar
results in the foodservice sector, several industry groups representing manufacturers, distributors, and restaurants
began an initiative called Efcient Foodservice Response (EFR) for the purpose of educating supply chain members in
traceability for the purpose of improving efciency. Teir eforts led to the voluntary adoption of GS 1 GTIN for food
products and Global Location Numbers (GLN) to identify company locations. Te use of GLNs help with traceability
eforts by identifying the precise location where products originated and also where they have been shipped.
Today the Foodservice GS 1 U.S. Standards Initiative (Foodservice Initiative), endorsed by most industry groups
representing food manufacturers, distributors, and school nutrition operators strives for GTIN numbers to be placed
on cases of product and in buying guides by 2011. Although the 12-digit UPCs are a GTIN, food manufacturers are
standardizing on a 14-digit GTIN commonly found on cases that can be captured electronically through bar codes
and radio frequency identifcation (RFID) tags. Te 14-digit GTIN, when used with application identifers (AIs) in bar
codes such as the GS1-128, can also track product information such as the lot, country of origin, use-by dates, and net
weight making the number much more versatile and useful.
Recalls have hit the fresh produce industry especially hard with growers and processors losing millions of dollars from
disposal of products later found not to be involved with food safety issues. In 2008, tomatoes were thought to be the
source of a Salmonella Saint Paul outbreak that sickened over 1,400 people. Although each company had records available
to trace tomatoes back to the feld, the lack of compatible electronic records slowed the process resulting in several months
of wasted time before FDA realized that no common source existed to implicate tomatoes. Motivated by these losses,
industry traceability initiatives such as the PTI have accelerated from obscurity to mainstream as fresh produce packers
who are PTI members prepare to label all produce cases with a scanable GTIN plus lot or batch number by 2011.
mpXML, a group of leading meat and poultry suppliers and retailers, is also using the GS1 standards used by both
20
Inventory Management and Tracking Reference Guide
the PTI and the Foodservice Initiative. All three groups have taken voluntary steps toward identifying products at the
case level using GTIN plus lot numbers and GS1-128 bar codes. Te mpXML and PTI have already adopted standards
for cases and pallets using the GS1-128 bar code and the Foodservice Initiative is expected to do so as well. Te goals
for all three initiatives are to minimize waste in the supply chain, improve product information for customers, and
establish a foundation for improving food safety and traceability.
Legislation
Te Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (Bioterrorism Act) brought
new focus on the ability to trace all foods sold in the U.S. from the source to the end user. Tis act standardized the
information that was to be kept including product and lot numbers, date of delivery/date of shipment, and the names
of those who came in contact with the food item. Although this provided data needed to trace products, each company
had the option of storing the data in any form that was convenient such as on invoices or other paper formats as well as
electronically. Although each company could trace products it received or shipped, lack of a common data format and
electronic means of sharing the information slowed traceability eforts.
More recently, the Food Safety Modernization Act of 2010 further strengthens the efort to track foods by requiring
FDA to establish a food tracking system to improve the ability to track and trace food products rapidly. Although
provisions of this law generally do not pertain to meat, poultry, and egg products, the Secretary of Agriculture stated
the Administration is reviewing the Federal Meat Inspection Act and that it is possible that food safety reforms adopted
by FDA may also be proposed and adopted by USDA and approved by the next Congress.
Bene?ts
Te biggest beneft from incorporating traceability in schools is cost savings. When recalls occur, products from the
same manufacturers or with the same ingredients unrelated to the recall are ofen pulled or destroyed “just to be safe.”
When students and other customers perceive a problem with a recalled food type, they ofen will not buy any product
similar to the recalled item. When this boomerang efect occurs, millions of dollars of food is unnecessarily removed
from the food supply and ultimately the costs are passed along to the schools and other establishments. If schools are
specifc about which foods are involved in a recall, react quickly to recall notices, and provide assurances about the
safety of related products, damage and costs are reduced.
Additional savings come from greater efciency. When coupled with technology such as bar code readers, the scanning
of GTIN numbers can potentially save money on tasks related to ordering, inventory, and receiving. One study conducted
by A.T. Kearney (International Food Distributors Association [IFDA], 2006) found that retailers reduced inventory by .5 -
1.0%, stockouts by 2 - 4%, and reconciliation errors (e.g., invoice discrepancies) by 5 - 10% when using bar code readers.
Scanning bar codes requires inventory and ordering sofware with the ability to store GTIN numbers for a case or
purchase unit. For complete traceability, sofware also needs the capability of storing lot numbers for each case of
product received. A hand held scanner that is capable of reading GS1-128 or GS1 ITF-14 bar codes is also required.
Tese bar codes are described later in this chapter under Item Identifcation. Te database used by the sofware must be
capable of exporting data in forms (e.g., comma delimited fle) that can be shared with supply chain partners.
Scanning products during the receiving process will not only record the product codes and lot numbers but provides
the ability to check these numbers against purchase orders to ensure that the correct products were delivered. Scanning
bar codes when taking inventory eliminates manual data entry required when a spreadsheet or sofware is used alone.
CHAPTER 3: Traceability
21
Even paying invoices can be automated when accounting departments are equipped to electronically share information
about received products rather than entering invoices into fnancial systems for payment. Scanning product codes
increases both accuracy and efciency.
In addition to food safety and efciency, the ability to trace foods also ensures that attributes such as organic, locally
grown, country of origin, genetically modifed foods (GMO), allergen-free, and other qualities that are impossible for
consumers to detect from examining products are delivered as specifed. Manufacturers are beginning to populate the
Global Data Synchronization Network (GDSN) with this type of information in order to electronically synchronize
standardized product information with their sales agents, brokers, distributors, and ultimately with operators such as
those in school nutrition programs. Te GDSN is a network of data pools containing item, location, and price information
from trading partners subscribing to the network using standardized information such as GLNs and GTINs.
Major food manufacturers are beginning to populate GDSN with pack size, nutrition information, allergens, and other
information ofen required by schools. When schools show an interest in using the GDSN, it will raise the priority
for manufacturers to populate the database with school products. Because schools are customers of the organizations
implementing these traceability initiatives, they are well positioned to take advantage of these eforts.
Barriers
Because electronic tracking is new to schools, the initial costs may be higher than some school districts can aford. It is also
typical that early adopters of technology may have to deal with imperfect sofware and other glitches. It may not be for everyone.
In order to take advantage of scanning, the school district would need to invest in both hardware (e.g., scanners) and
sofware that can store and share product numbers. Vendors currently providing ordering and inventory sofware to
schools may not have the ability to scan bar codes making it difcult to implement electronic tracking. Funding for
such purchases may be justifed based on potential cost savings, especially in larger school districts.
Although there are many manufacturers and distributors that have already begun using GTIN numbers on cases of
food products, there may be many others who have not yet taken that step. School personnel may fnd it frustrating to
continue using manual systems for products from certain vendors when other vendors are using GTIN numbers.
Get Ready For the Future
Te Foodservice GS1 US Standards Initiative has set goals for participating manufacturers to communicate product
information to the GDSN and for distributors to scan GTINs and lot numbers on all outbound cases by 2012. Tis
will enable operators to begin receiving product information electronically and scanning inbound cases from industry
partners participating in the Foodservice GS1 US Standards Initiative shortly thereafer. Companies currently
participating in this initiative are listed on the Foodservice GS1 US Standards Initiative webpage. Te link for the
webpage is listed in the resources section of this guide.
Preparing to participate in this initiative will require following inventory management best practices described in this
guide as well as preparing for the electronic exchange of information with industry partners. Implementing business
practices that standardize product information and ensures product tracking within the school district is the frst step
in preparing for electronic data sharing.
To prepare for electronic information exchange through the GDSN, school districts should:
1. Specify that vendors include GTINs on product cases;
22
Inventory Management and Tracking Reference Guide
2. specify that vendors include GLNs on shipping documents, and invoices;
3. select sofware vendors that store GLNs and GTINs in their system and have interoperability with GDSN-certifed
data pools;
4. select scanning hardware that can read GS1-128 and IFT-14 bar codes;
5. obtain GLNs for school district and each location receiving products or product information.
In order to assign GLNs for each location, frst contact GS1 customer service to obtain a company prefx. Next, assign location
numbers to each location that will either receive products or product information such as schools, accounts payable, and
warehouse. Te company-prefx and location number together comprise the GLN. Each school district should be identifed
by only one company prefx so it is important to communicate with school district administration to coordinate the eforts
of diferent school district departments to avoid duplication. Although there is a small annual subscription fee for each GLN
number, larger districts may fnd it less expensive to annually subscribe for a company prefx and then assign their own GLNs.
Item Identi?cation
Te basic requirement for manual or electronic traceability is the ability to accurately identify products. If using an electronic
tracking system such as bar coding, a 14-digit GTIN plus lot number is the most common method of identifying products.
Manual systems will use a variety of case coding depending on the manufacturer. For food recalls, additional information must
be gathered for the batch or lot regardless of the type of tracking system used. Even if an electronic system is implemented, not all
manufacturers have adopted GTINs so a combination of automated and manual processes will be needed.
Manual case markings will be diferent depending on the type of food product. Meat, poultry, and egg products will
have an establishment number located inside the USDA inspection seal (Exhibit 3-1). Te package will have a lot or
batch number or “use-by date” that identifes when a product was manufactured.
EXHIBIT 3-1 Examples of common case markings
Establishment
number
Lot
number
GTIN
Number
Lot
number
CHAPTER 3: Traceability
23
Once an operator learns to read and understand bar code numbers, these numbers may also aid in product identifca-
tion. Products manufactured by companies that have adopted GTINs will have a 14-digit number and bar code on the
case as shown in Exhibit 3-3. One digit will diferentiate the packaging levels, one is a placeholder, and twelve digits will
represent the unique company prefx and item reference number (Exhibit 3-2). A GS1 Company Prefx (identifer) can
vary from six to nine digits; the length of the Company Prefx determines the number of digits a company has available
for its Item Reference numbers; the shorter the prefx; the more Item Reference numbers that are available for use. Te
fnal digit is a check digit that is used to ensure the product scanned correctly.
EXHIBIT 3-2 GTIN coding scheme
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Indicator
Code
Placeholder Company
Pre?x
Item
Reference
Check
digit
Indicator codes will be zero (0) if inner packages have diferent item reference numbers and one (1) when the case and
item references are the same. When the indicator code is 0, school operators need to be aware that inner packs will not
have the same item reference number as the case or shipping container and extra care will need to be taken to ensure
that correct item references are recorded. An indicator code of nine (9) represents a product with a variable weight
(e.g., turkey ham where each ham has a diferent weight).
Manufacturers choosing to use a GS1-128 barcode have the option to add a lot number next to the GTIN (Exhibit 3-3).
Manufacturers also have the option to add net weight and other information by stringing along additional numbers
identifed by application identifers (AIs) (Exhibit 3-4). Application identifers have the potential to provide school
districts with more accurate information about country of origin and other attributes.
EXHIBIT 3-3 Examples of Global Trade Item Numbers
GS1 ITF-14 Barcode
Inside packages will have
the same item reference
numbers.
GS1-128 Barcode
with application identi?ers.
This one shows a lot number
of 10036.
GS1 ITF-14 Barcode
Inside packages will have
diferent item reference
number.
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Inventory Management and Tracking Reference Guide
EXHIBIT 3-4 Common Application Identi?ers
AI TITLE
01 Global Trade Item Number
10 Batch or lot number
11 Production date (YYMMDD)
15 Minimum durability date or “sell-by” (YYMMDD)
17 Maximum durability date or “use-by” (YYMMDD)
30 Variable count
320
Net weight (lb), n = decimal placement422 Country of origin
School nutrition personnel need to be able to identify products for a variety of reasons. Subtle diferences in products
can afect pricing, nutritional integrity, and compliance with school nutrition regulations, or the food product may
contain allergens that can be harmful to afected customers.
When products are purchased, the product number or GTIN and any acceptable substitutions must be available to
personnel receiving deliveries to ensure that products ordered are the ones received. Cooks and production employees
also need to read product codes to make certain that prepared products match production records and recipes. In the
event of a foodborne illness, school records must be sufcient to track products served on specifc dates, and meals to
ingredients and sources. When recalls occur, specifc products must be identifed as to date received, used, disposed of,
or sequestered.
Voluntary Standards
Some school districts are addressing organizational quality by adopting standards such as International Organization
for Standardization (ISO) standards and Safe Quality Food Institute (SQF) standards or including these standards as
requirements for vendors in bid documents.
Note for district with centralized production: Although ISO and SQF standards will beneft all school nutrition
programs, districts that operate centralized food production facilities may have the greatest beneft due to the
increased risk when producing a large volume of meals in one facility.
ISO standards are available for many diferent types of organizations, including school districts, and a variety of
processes including ISO 22000:2005, food safety management systems. ISO defnes standard operating procedures,
monitoring systems, adequate recordkeeping, corrective actions, and feedback mechanisms to ensure procedures
are efective. Tis process is very similar to food safety plans based on Hazard Analysis and Critical Control Point
(HACCP) recently added to National School Lunch Program regulations.
CHAPTER 3: Traceability
25
Companies may elect to be ISO or SQF certifed by adopting these standards and participating in periodic audits,
however, you do not need to become ISO or SQF certifed to implement standards that will improve program quality.
Both ISO 22000:2005 and SQF 2000 include traceability standards for food products requiring product codes and lot or
batch numbers to be recorded throughout internal processes as well as among supply chain members.
Critical Tracking Events and Recordkeeping
A critical tracking event (CTE) is a point at which a product is moved between sites, a product is transformed, or any
point where a record is required in order to trace a product. In a school nutrition program where all food is delivered
directly to a school site for production and service, CTEs would include the point at which a product is received, the
point at which the product is used in food production, and the point at which the product is served, stored, or thrown
out. If the product is stored as a lefover, two additional CTEs occur for reheating and serving or disposal. CTEs will be
marked in this document with to indicate a process when critical information about the product must be recorded.
Te ability to trace products depends on the ability to capture data about the product at each CTE point. Data that
must be captured include date, location(s), product code, quantity, and lot number. Te manner in which data
are stored is up to the school district. At a minimum, schools need to record sufcient information on invoices or
receiving documents and production records. Programs with more complex delivery and production methods will
have more CTEs.
Note to districts with warehouses and/or central kitchens: When food is shipped from one location to another,
such as between schools or centralized storage or production facilities, additional recordkeeping is necessary.
Data need to be recorded for each shipment received as well as each shipment out of the facility.
Internal and External Traceability
Internal traceability refers to processes within a school when data should be collected in order to trace a product,
including transforming the product into a fnished product. Processes such as cooking, serving, and disposal or
destruction of the product are all considered internal traceability processes.
External traceability refers to a physical exchange of product between two supply chain members such as a distributor,
a state USDA Foods warehouse, or a contracted receiving site such as a day care and one or more locations within
the school district. It also refers to transfers within a district when products are shipped from a warehouse or central
kitchen to a school or between schools.
Te source location must provide the recipient with at least one identifcation number such as the GTIN and the
recipient must keep this identifcation attached to the item until the product is used or destroyed.
Best Practice: Use GLNs and GTINs on all purchase orders. Require vendors to use GTINs on advance shipping
documents and GLN and GTINs with lot numbers for their products on all invoices. Internal shipping documents and
production records should also use GTIN and lot numbers for items produced and/or shipped within the district and
to entities outside of the district.
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Inventory Management and Tracking Reference Guide
Role of Technology
GTIN numbers are designed so that they can be encoded into bar codes or electronic product codes (EPC) such as
radio frequency identifcation (RFID) tags in order to be read by electronic data capture devices such as scanners.
RFID is a technology that shows great promise but it is not readily available for school nutrition application and is too
expensive to consider for school districts at this time.
On the other hand, bar code technology is relatively inexpensive, bar codes are encoded at the case level for most food
products, and scanners with the ability to read all GS1 and other bar codes are readily available. Ideally sofware already
in use by school nutrition programs for ordering, receiving, inventory control, production, and point-of-sale will
incorporate tracking capabilities enabling schools to capture GTIN and lot numbers.
Reports from these systems should summarize the disposition of a given product code and lot number, by location,
within a specifed date range including the ability to be exported electronically for submission to a state agency in the
event of a USDA Foods recall or to FDA or other authorities in the event of a commercial recall, foodborne illness, or
bioterrorism event.
Te cost efectiveness and efciency of such a system will depend on the complexity and size of the school nutrition
program. In a small district where food is primarily delivered to each location, manual systems will sufce as data
can be gathered, reviewed, summarized, and reported to the requesting agency quickly. In larger or more complex
programs where data are collected at many processing points and locations, an electronic means for collecting and
reporting data may become essential in order to provide full traceability.
Electronic capture of the GTIN plus lot numbers is more efcient than tracking lot numbers manually. Products may
be scanned when they:
n arrive from vendors,
n are placed in or removed from storage,
n are shipped to other buildings, and
n are discarded.
When selecting sofware vendors, ensure the sofware can provide reports fltered for a given GTIN and lot number
and sorted by location and date.
CHAPTER 4: Best Practices in Inventory Control
27
C H A P T E R 4
Best Practices in Inventory Control
TERMINOLOGY
Batch Cooking: Preparing smaller quantities of food as needed throughout the serving period rather than
preparing the total quantity needed at one time.
Cycle Menu: Menus that are repeated over a specifed period of time.
Cycle Counts: Physical count of a small group of randomly selected products on a periodic basis. Typically used in
high volume operations when a monthly physical inventory may not be possible.
Indirect Discount: Applying a discount for the fair market value of USDA Foods on processed products on the
invoice; also referred to as “net of invoice”.
Par Value: Te amount of product needed to fulfll menu requirements for one ordering period plus a small
amount for safety stock.
Perpetual Inventory: Continuous recording of all receipts and issues of products in storage providing a balance of
each item at all times.
Physical Inventory: Periodic actual count of products in storage areas.
Single Inventory Method: Maintenance of a single inventory for food and supplies, including USDA Foods.
Standard Operating Procedure (SOP): Detailed written instructions for a process that must be followed to ensure
a desired outcome.
School nutrition programs across the country have diferent methods of achieving the same goal: serving nutritious,
cost-efective meals students will enjoy. Some methods, however, stand out as “best practices” or procedures that when
followed achieve consistent high quality results. Tis chapter identifes “best practices” that are related to inventory
management and product tracking.
Typically, inventory management is addressed as a function or discrete set of tasks. In this chapter we approach
inventory management from a systemic or holistic view looking at the impact each function in the school nutrition
program has on the management of inventory. Inventory management ensures that quality, cost efective products are
available in the right quantities at the right time.
Similar to strategies used in Efcient Foodservice Response (EFR) initiatives to take advantage of supply chain
management and inventory management efciencies, it is important to:
n assemble a cross-functional team including representatives from purchasing, operations, accounting, and technology;
n educate the team on how inventory management is afected by each department;
n develop a plan with a vision for improving management of inventory to improve cost, efciency, traceability, and
safety; and
n develop metrics (e.g., food cost, inventory turns) that may be used to benchmark starting points and measure progress.
28
Inventory Management and Tracking Reference Guide
Menu Planning
Menu planning is the underpinning of inventory control because the menu establishes what items are needed and how
frequently they are going to be used. Efective menu planning requires considerable planning and skill to ensure that
menus are cost efective, popular with customers, and meet nutrition and program guidelines. It is unlikely that menus
planned monthly by each site manager efectively control inventory.
Using a central cycle menu controls inventory by making the items and quantity needed predictable. When the same
items served together are repeated, a pattern emerges that, during each cycle, can be used to predict what customers
will purchase. Tis allows managers to improve ordering forecasts. Remember that the menu consists of more than
reimbursable meals. A la carte oferings are part of the menu and also should be carefully planned. Timing of menu
planning also can afect pricing.
When menus are planned before bids are developed, bid quantities may be forecasted with more certainty. Vendors
that can count on accurate bid quantities are more likely to ofer volume price discounts. If complete menus cannot
be planned in advance, determine the number of times each menu item will be ofered during the bid period and later
plan menus meeting these guidelines.
A sofware program can facilitate forecasting by using the sales and production history from previous menu cycles.
Te number of cycles to review depends on the participation trends of the school. If participation is rising, the history
from the last serving date may be all that is needed. If participation is holding steady, review the last two or three menu
cycles and forecast using the highest fgure.
Procurement
Efective procurement afects inventory control by obtaining the right items in the correct quantity for the best value.
Once menus are planned, a list of items to purchase can be developed so that only items planning to be served are
purchased. USDA (1998) found that schools carried an average of over 800 SKUs. Reducing the number of SKUs
reduces the time it takes to specify, order, receive, track, store, and inventory items.
A SKU is a discrete item with the same characteristic (e.g., juice purchased in fve favors represents fve separate
SKUs). Each SKU will have its own GTIN. For tracking of items during a recall it is helpful to have fewer SKUs of a
certain item when trying to account for the status of all recalled product.
Reviewing menus and recipes to utilize the same SKU for more than one menu item will make inventory control
simpler and reduce costs. Also, reviewing production or sales records can identify items with low sales so those items
may be eliminated. Selling less than 25 units of an item or favor of any SKU is probably not worth the time it takes to
order, store, and sell it. In large schools the cut of may be 50 sales for a given SKU.
Although food and supply specifcations may be written so that more than one product is acceptable to bid, once
the purchasing decision has been made only the selected product code should be purchased. When substitutions are
needed, an appropriate product code substitution should be approved in advance by someone at the central ofce and
clearly communicated to receiving agents. Product substitutions may lead to a variety of problems including:
n reduced quality,
n non-compliance with regulations,
n increased costs,
CHAPTER 4: Best Practices in Inventory Control
29
n non-compliance with nutritional guidelines, and
n loss of customer satisfaction.
Managing suppliers is also part of inventory management. Clearly identifying vendor requirements in bid documents
ensures that your food safety eforts will not be undermined by faulty vendor practices. Adding language to bid
documents such as requiring Good Manufacturing Practices (GMP), Good Agriculture Practices (GAP), and Good
Handling Practices (GHP) for produce and Farm to School procurement, and requiring HACCP plans and traceability
requirements found in SQF2000 or ISO certifcation can ensure product safety (see Appendix).
Forecasting and Ordering
Forecasting and order can greatly afect inventory control. When forecasting is not accurate and products are ordered
in excess:
n too much money is tied up in inventory, which reduces cash fow;
n there is more opportunity for spoilage;
n the incidence of thef is increased;
n more products become obsolete; and
n the quality of products deteriorate overtime.
Problems, such as stockouts and emergency buying, result from under ordering. Both conditions result in not getting
maximum value from inventory.
Predictability improves inventory control across the supply chain giving manufacturers the opportunity to lower costs
by producing only the quantity of products actually needed by end users and helping distributors stock sufcient
quantities of product without overstocking. When schools order larger quantities or diferent products than vendors
expect, items may be out of stock.
Several practices help reduce the out of stock conditions:
n planning cycle menus,
n ordering based on menus,
n sharing menus and expected order quantities with vendors in advance,
n minimizing menu substitutions, and
n maintaining a low inventory of menu items so ordering refects usage.
An ordering system should be established to prevent over ordering. A par value system establishes a maximum
quantity to keep on-hand. Te par value is the amount needed to fulfll menu requirements for one ordering period,
usually one week, plus a small amount for safety stock. Other factors to consider when setting par values include:
n storage space,
n frequency of deliveries,
n vendor minimum orders, and
n value of product ( e.g., higher cost products should be ordered close to the time of use).
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Inventory Management and Tracking Reference Guide
Accurately forecasting orders is not a simple task. Managers should not be required to place an order while another
order is incomplete. Requiring managers to place weekly orders more than a few of days in advance may result in
incorrect ordering.
When orders are placed, the quantity of product to be ordered is the amount needed to bring inventory back to the
maximum or par level. If an item is served more than once between delivery periods you must also consider how much
will be used before the order is received. Inventory should be checked prior to placing the order and subtracted from
the total quantity needed. A par stock method works well for items where consistent amounts are used each week or
order period (see Exhibit 4-1). Par values need to be monitored throughout the year and adjusted when menus and
participation change.
EXHIBIT 4-1. Determining Order Quantity
PRODUCT/GTIN FREQUENCY PAR (MAX) COMMITTED (+) INVENTORY (-) ORDER QTY
# 10012345000017
Peaches
6 cns/cs
Weekly 10 cases 2 cases 1 case 11 cases
# 10012345000021
Trays
10 pkg/cs
Weekly 20 cases 12 cases 12 cases 20 cases
# 10012345456784
Detergent
4 gal/cs
Monthly 2 cases 1 case 1 case 2 cases
# 10123457890006
Chicken Patties
120/cs
Menu 5 cases 0 2 case 3 cases
Ordering based on menus is another alternative. Order guides are designed to match weekly menus. Ordering by menu
still requires that you establish the amount you would need to fulfll the menu plus a small extra amount for safety
stock. You still consider the amount committed before the order arrives, and the amount currently on inventory. Te
only diference is the item would not be ordered until right before it is on the menu.
Te same ordering system may be used when ordering USDA Foods. Te delivery periods may be the same as for
commercial products or longer depending on whether or not your state participates in an indirect discount or “net of
invoice” program, receives a commercial delivery by a distributor, receives deliveries to a district-operated warehouse,
or receives monthly deliveries directly at the school site.
Receiving
Te receiving process ensures that you receive specifed products that were ordered, in correct quantities, safe, and at
the best quality. Receiving is a very important function of inventory control and its value is ofen overlooked. Efective
receiving requires a well-trained employee and the following resources:
n standard operating procedure (SOP) for receiving food and supplies,
n item specifcations including product code or GTIN numbers,
n orders and/or receiving documents,
n thermometers for checking temperatures of TCS products,
n markers or date stamp, pens, pencils, wire snips, and clipboard,
CHAPTER 4: Best Practices in Inventory Control
31
n wire cutters for breaking seals on USDA Foods deliveries,
n hand trucks, carts, or dollies to move food to storage areas, and
n scales to weigh products sold by weight.
Deliveries should be scheduled so that the receiving agent has time to check food items thoroughly and store products
immediately. Deliveries should not be accepted before trained employees are available to receive them. Deliveries made
before school opens or afer staf has lef for the day must be avoided.
Receiving agents should be familiar with expected deliveries so that the receiving process can move as quickly as
possible. Tere are several steps to the receiving process:
n check that deliveries arrive in a clean truck that is capable of maintaining food at correct temperatures and securing
product from tampering during delivery;
n identify the driver if he/she is not familiar to the receiving agent by requesting an ID and recording the driver’s name
on a receiving log;
n check in products by category examining and storing refrigerated items frst, then frozen items, and dry goods last;
n check the product code or GTIN to ensure that the correct product is received and record on the invoice ;
n check each case for quality such as damage to container, wilting or spoilage, and out-of-date products and obtain a
credit receipt for rejected products,
n weigh items sold by weight;
n count and check all cases against orders or receiving reports;
n compare invoices to orders, check prices and extensions, note changes, and obtain credit memos;
n check items that were substituted against approved substitution list; and
n stamp or mark all products with a receiving date.
Using sofware for ordering and receiving helps ensure the correct product is received at the right price. Once products
are entered into the sofware database, only products identifed for each site may be ordered. Orders are automatically
converted to receiving screens once orders are approved, allowing receipt of only the desired products.
Storage and Issuing
Secure, efcient, and safe storage are key elements of inventory control. Tis begins with well designed, equipped, and
secured storage areas, proper placement of food and supplies, and employees trained in proper storage and issuing
processes.
Security is critical to protect foods from thef and intentional contamination or bioterrorism. Since the terrorist actions
of 9/11/2001, threats to the security of food have been re-examined. Purposeful contamination of our food and water
supply has been identifed as potential sof-targets requiring special means of protection. Security of food items should
include:
n keep all storage areas and outside access doors locked at all times,
n control keys, establish a policy for securing keys in a locked safe or cabinet, and sign keys in and out to those who do
not need routine access,
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Inventory Management and Tracking Reference Guide
n issue keys only to those employees who need access,
n collect keys immediately from employees who have been fred or resign,
n restrict kitchen access to school nutrition personnel,
n enforce policies requiring visitors to check in at school ofces, and
n provide lockers for employees to store bags, purses, and other personal items.
Install security cameras by access doors to the establishment and to all storage areas. Post signs to warn employees and
visitors that premises are monitored. Keyless entry systems, otherwise known as key cards, eliminate the need for keys,
can be reprogrammed when personnel change, and can leave an audit trail of who has gained access to storage areas.
Efcient storage layout can save time and maintain safety and security. Because National School Lunch regulations
permit a single inventory method, USDA Foods and commercial foods do not need to be stored separately. Here are
some tips for designing storage areas (see Exhibit 4-2):
n use mobile shelving with adjustable shelf heights, dunnage racks, and dollies rather than stationary shelving,
n place high use products near the door for easy access,
n keep products in original cases, unless pest infestation is a problem, so that information needed for traceability re-
mains intact,
n place products in storage areas in the order of inventory forms or a “sheet to shelf ” numbering system to label shelv-
ing and assign products to specifc locations then print inventory worksheets using the same order,
n place foods that will receive no further cooking on shelves above raw foods that will be cooked, with lowest safe
cooking temperatures placed above items requiring higher cooking temperatures,
n store chemicals away from food and paper supplies, in a separate locked section of storage area away from food to
protect food and supplies from contamination,
n store the heaviest containers near entry on lower shelves, dollies, or dunnage racks to reduce the chance of injuries
when moving product, and
n place expensive products in locked racks or away from easy access to exits.
EXHIBIT 4-2 Example of proper placement of items in storage
USED INFREQUENTLY
DECORATIONS, UNIFORMS
LIGHTWEIGHT ITEMS
PAPER TRAYS, LIGHT FOODS
MEDIUM-WEIGHT ITEMS
CANS, BOTTLES, JARS
CASES, RACKS, BOXES
HEAVIEST ITEMS
SACKS, BARRELS, CRATES
CHAPTER 4: Best Practices in Inventory Control
33
Removing or issuing stock is another point where controls are needed. Allowing several diferent employees to remove
products from storage areas decreases efciency and increases potential for thef. Practice frst-in, frst out stock
rotation and train employees to check “use-by date” or delivery date to ensure older products are used frst.
Storeroom requisitions for issuing products should be used along with production records to provide an audit trail for
items used (see Exhibit 4-3). Keeping records of food in storage is a critical tracking event. Te specifc product code
number or GTIN should be listed on the requisition along with the initials of the person(s) who removed the stock. For
improved traceability, lot numbers also should be listed. Food and supplies that are delivered directly to production or
serving areas rather than storage areas, such as milk and produce, must also be recorded on a requisition. Requisitions also
can be used for completing production records. Diferent approaches can be considered for issuing stock.
All employees should review the menu and recipes a day in advance and provide a written list of items needed or a
requisition. An employee trained in issuing gathers supplies, places them on trucks or carts, checks items of the list,
and delivers to each work area. Tis method requires sufcient refrigerated storage in production areas to keep foods
at proper temperature during production. If cold storage is not available, multiple requisitions with the addition of
delivery time may be needed to accommodate batch cooking methods.
Ingredient rooms increase control of inventory by assigning to a person(s) tasks related to pulling inventory as well as
weighing and measuring all ingredients needed for the day’s production. Ingredient rooms are efective in high volume
kitchens and centralized production facilities where centralizing equipment needed to weigh and measure food can
save time and improve accuracy.
When there is a small staf or insufcient cold storage in work areas, production employees obtain products from
storage areas, write down products removed, and sign a storeroom requisition. Tis system requires that all employees
receive training in stock rotation, safe lifing, and recordkeeping.
EXHIBIT 4-3 Sample Storeroom Requisition
Storeroom Requisition Number: 129
Date: 05/06/2010
Storeroom: Dry Storage
Qty Unit Product Code Lot # Description Issued to Unit Price Total Price
1 Can 12345 3029 Tomato Paste JB $ 2.00 $ 2.00
2 Cases 23456 9909, 9908 Peaches, Canned BG $ 12.00 $ 24.00
4 Bags 34567 2000811 Macaroni JN $ 1.20 $ 4.80
Total $30.80
Inventory Control Records
Food and supplies account for 40% or more of program revenues and warrant the time it takes to keep adequate and
accurate records of products. In order to have a complete picture or audit trail of products received and used, a good
recordkeeping system needs to include menus, orders, receiving records, requisitions, production records, and point-
of-sale or serving records. Each type of record has a specifc purpose; however, collectively they lay the groundwork for
internal traceability for each food item.
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Inventory Management and Tracking Reference Guide
Perpetual Inventory
A record of food and supplies received, issued, and a running balance on hand is called a perpetual inventory. Some
states require schools to maintain perpetual inventory records. A manual perpetual inventory is time consuming and,
unless required by the state agency, for small operations may not be cost efective. A perpetual inventory can:
n provide information about current stock levels,
n serve as a tool for ordering,
n provide information for food and supply cost control,
n prevent thef, spoilage, and other shrinkage, and
n improve the ability to trace foods in the event of a recall or foodborne illness.
In perpetual inventory systems, a card or page is kept for every item that is purchased. Cards are updated daily from
receiving reports or storeroom requisitions. When a physical inventory is taken, the actual count is recorded on the
card and adjustments are recorded for diferences found between the “book” or card quantity on hand and actual
quantity on hand (see Exhibit 4-4). Having a written record of adjustments provides a tool to track shrinkage due to
thef or other discrepancies. Inventories should also be kept for USDA Foods held by distributors or processors.
EXHIBIT 4-4 Perpetual Inventory Card
Product Code: 23456 Description: Peaches, Canned Storeroom: Dry Storage
Purchase Unit: Case Issue Unit: Can
Date Req/Invoice Qty In (Purchase Unit) Qty Out (Issue Unit) Balance (Issue Unit)
5/10/10 RQ 129 12 2
5/12/10 PO 222 2 14
5/17/10 RQ 140 12 2
5/29/10 INV 1
Computer systems have made maintaining a perpetual inventory system much easier. Usually food is ordered through
the sofware program, which creates a receiving record. When food is received, inventory is updated with new
quantities and inventory values are adjusted. When food is issued or used, the inventory quantity is adjusted again.
Some systems utilize menu plans and production forecasts in order to compare the planned with the actual quantities
used. Finally, a periodic physical inventory is taken and recorded to keep the inventory system accurate and to identify
discrepancies.
Physical Inventory
An actual count of food and supplies must be taken on a periodic basis. Tis is called a physical inventory. In schools, a
physical inventory is usually taken of all products in refrigerators, freezers, and dry storage areas once a month.
CHAPTER 4: Best Practices in Inventory Control
35
Note for central kitchens and warehouses: In larger volume operations it is not usually practical to take a full
monthly inventory at one time. Tese operations should maintain a perpetual inventory system and utilize
cycle counts for checking accuracy of inventory records and to control shrinkage. In cycle counting, a group of
products is randomly selected from a list of expensive or high volume products and counted on a periodic basis.
For example, 20 diferent items may be counted each week.
It is a best practice to have two people involved in taking inventory; one to count and one to record. To maintain
integrity, at least one of the people should not be involved with day-to-day storekeeping responsibilities such as
receiving or issuing.
Food and Supply Cost Calculation
Food and supply cost may be calculated in two ways. One way is to calculate the total food and supplies used from daily
storeroom requisitions. Tis may be useful when a monthly inventory system is not used. An advantage of this system
is that it will provide an actual food cost associated with the day’s menu. Tis value may be added to production records
for post-costing of menus so that you can see what part of food cost can be attributed to waste.
Inventory values may be used to calculate food costs when used with food purchases. When inventory values are used
to calculate food cost, timing of monthly physical inventories should coordinate with invoice processing so that items
included in the ending inventory also are included in food and supplies purchased for the month. Te same formula
may be used for calculating food or supplies. Te formula for calculating food cost is:
Beginning inventory + food purchases - ending inventory = cost of food used
Tis method provides an accurate monthly cost but will not provide enough information to determine the days that
food costs are too high or what portion of the food cost can be attributed to waste or shrinkage. Post costing of menus
will help determine if high food costs can be attributed to incorrect forecasting or waste.
Technology can greatly beneft the process of taking a physical inventory. Te simplest systems provide items listed
in the order of storage areas, record quantities on hand, track unit pricing, and calculate total inventory value. More
sophisticated systems allow the user to scan in bar codes for items and type in quantities. Both will lead to faster and
more accurate inventory counting than traditional methods.
Production
Production procedures impact inventory control by ensuring correct products are used, portion sizes are correct, and
waste from production is controlled. If using cycle menus, production records can be pre-printed with:
n product codes/GTIN,
n recipe numbers,
n serving size, and
n serving utensil required.
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Inventory Management and Tracking Reference Guide
Tis ensures the right items and portions are used in production. Record the GTIN or product code of foods used in
production . To help with traceability, lot numbers may be added to production records as products are pulled from
inventory.
All recipes should be standardized for consistent yields. Recipes should be extended to the number of servings needed.
Match recipe extensions to standard serving pan sizes to discourage overproduction. In some cases, this may mean
purchasing smaller pans such as half pans for lasagna or half sheet pans for pizza. Using standard or whole production
measures on production records and recipe extensions helps control waste by planning the use of whole cans rather
than specifying a partial can only to have production employees use the entire contents rather than saving the
remainder as a lefover.
Waste may be controlled by accurately forecasting production needs and batch cooking. Production records are not just
a program requirement; they are also an important management tool. Cycle menus make it easier to forecast needs. For
efcient use of cycle menus:
n predict the quantity of each item needed using sales and production history,
n plan to have a small amount of each item lefover to ensure all students have the same choices,
n record the number of servings sold at the end of each serving period or every 30 minutes to forecast batch cooking
needs for the next menu cycle,
n record an estimate of how many additional servings may have been sold when products run out, in order to forecast
more accurately for the next menu cycle,
n complete production records immediately afer each serving period to promote accuracy,
n freeze usable lefovers to serve the next time the cycle is repeated, and
n record production projections and lefovers to be used on the production record for the next menu cycle immedi-
ately afer completing each day’s production record.
Having enough stock on hand for production is essential. When products are substituted due to insufcient stock,
historical records cannot be used to forecast production and current records will not be useful for forecasting future
production. Tis ofen begins a cycle of inaccurate forecasting that is difcult to break.
Service
Te fnal process afecting inventory is serving products to customers. Sometimes the best production planning is
inefective due to serving incorrect portion sizes. Correct portioning can:
nresult in customer satisfaction because the same portion size is served to everyone,
nmake certain that expected yields are obtained from recipes so that products do not run out,
nensure that school nutrition program regulations for serving sizes are met, and
ncontrol costs.
Controlling thef during service is also important in inventory management. Food items that are easy to hide in pockets
or bags need to be placed by the cashier or held behind the line until customers have paid for them.
Keeping an inventory of items placed on the line can help identify when thef is occurring. Tis is efective for tracking
a la carte items that tend to be stolen more frequently. One employee should place items in snack bars or serving lines
CHAPTER 4: Best Practices in Inventory Control
37
and record the count for each item (see Exhibit 4-6). As lines are refreshed with items, the record should be updated. A
diferent employee should cashier the line. Once serving is over, the employee should take a fnal count of the items and
record. Te site manager adds the sales from the point-of-sale report or tape. Te usage is calculated:
beginning inventory + additions – ending inventory = sales
Specifc items can be programmed on the computerized cash register at the point-of-sale rather than using generic
item keys. Tis improves item tracking, aids in completing production records, and helps identify thef. Requirements
to record servings of a la carte and adult portions on production records are nearly impossible to achieve accurately
without ringing up individual food items at the point-of-sale.
Some point-of-sale systems allow users to scan bar codes at the point-of-sale. Many prepackaged item labels are already
printed with bar codes. Tis practice records specifc item information quickly and accurately. Compare the point-
of-sale register sales record to the projected sales. If there is a sizable diference between the two amounts, either the
cashier is not ringing up sales correctly or customers are taking items and not paying for them.
EXHIBIT 4-6 Sales Inventory Form
Item Beg. Inventory + Additions - End Inventory = Number Sold Price Projected Total
Water 48 24 20 52 .75 $ 39.00
Juice, 12 oz 60 10 50 1.00 $ 50.00
Pretzels 48 12 5 55 .50 $ 27.50
Crackers 24 4 20 .50 $ 10.00
Expected Total Sales $126.50
Total Sales from Register $120.50
Adding columns for portion cost information to production records enables the manager to identity where food costs
are afected by overproduction and waste. Exhibit 4 -7 illustrates this process:
1. Multiply portion cost (column 4) by usage (columns 7 and 8) to achieve total cost (column 9).
2. Divide total cost (column 9) by number served (column 7) to achieve actual portion cost (column 10).
3. Total column 9 to get the total food cost for the meal.
4. Divide the total food cost (11) by number of meals served (2). Tis is the cost per lunch (13).
5. Notice that the $ .86 actual cost (13) is $ .05 per meal higher than the planned cost (1) of $ .81. Tis was due to the
waste from the sandwiches and broccoli.
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Inventory Management and Tracking Reference Guide
EXHIBIT 4 -7 Example of Post Service Section of Production Record
Planned per meal cost: $ .81 (1) Lunches served: 85 (2)
Menu
Item
(3)
Portion
Cost
(4)
Qty
Produced
(5)
Usable
Lefover
(6)
Served
(7)
Waste
(8)
Total Cost
(9)
Actual
Portion Cost
(10)
Chicken Patty
on Bun
$ .35 100 10 85 5 $ 31.50 $ .37
Broccoli $ .20 75 0 65 10 $ 15.00 $ .23
Peaches $ .18 80 10 70 0 $ 12.60 $ .18
Milk $ .20 85 15 70 0 $ 14.00 $ .20
Total Meal Cost (11) $ 73.10
Actual Food Cost Per Meal $ .86 = $ 73.10 ÷ 85 (13)
Technology can make preparation of production records much faster and more accurate. A simple spreadsheet can be
developed for each day and designed with locked cells with menu items, portion sizes, portion costs, and formulas for
all calculations. Te cooks and managers enter the quantities produced, served, and wasted and spreadsheet formulas
complete the calculations. Computer sofware can make the process even more precise by calculating pre-costs from
recipes and menus and adding items served from point-of-sale transactions.
Summary
Inventory control is more than securing products in storage areas. It starts with carefully planned menus, procuring
the right products in the right quantities, and making sure the items ordered are the ones received. Secure storage areas
are important; however accurate production forecasting and meal preparation to ensure student choices are equally
important. Finally, serving the planned portion of each food item and protecting items from customer and employee
thef completes the chain of control.
CHAPTER 5: Responding to Food Emergencies including Recalls
39
C H A P T E R 5
Responding to Food Emergencies
including Recalls
Preparing for Problems
Careful management of food and supply inventories from the time a product is received into the facility until it is
served or discarded is considered good business practice. Tese management practices include:
nkeeping products secure,
nseparating products from sources of contamination, and
ntracking quantities received, on-hand, used, and disposed.
Proactive preparation for emergencies has increased the need for additional inventory management practices that
will prevent or minimize foodborne illness caused by products that have been adulterated, mishandled, or mislabeled.
Schools may either be a recipient of products suspected of contamination or they could be the source of contamination.
In both instances, careful inventory practices and recordkeeping can minimize damages.
Every school district should develop an Emergency Management Plan that provides:
ndescriptions of emergencies that might afect the school district;
ncontact information for emergency-management team members, district administration, and outside resources such
as the health department, the fre department, the local Environmental Protection Agency, and the local Environ-
mental Health Agency;
nroles and responsibilities of each emergency-management team member;
nappropriate response to each type of emergency;
ncommunication plan containing information to be shared with employees, parents, and community and who the
spokesperson will be; and
na recovery plan for each type of emergency including follow-up investigations.
Ensuring the ability to trace foods back through the supply chain to their original source and to track food received
from your facility is part of a proactive emergency response plan and is needed in the event that:
nschool customers become ill from eating a food product served at school;
na food safety or quality problem for a product is identifed at your facility; or
na product is recalled.
Tis requires keeping records containing information used to identify the product, the source or recipient, and delivery
(Exhibit 5-1).
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Inventory Management and Tracking Reference Guide
EXHIBIT 5-1 Recordkeeping Requirements for Tracking Food and Supplies
RECORD SPECIFIC INFORMATION
Product identifcation information Manufacturer
Product code or GTIN
Lot or batch number
Sell by or use by date
Establishment number for meat, poultry, or egg products
Information about the source or recipient
(if shipping to another location)
Name
GLN
Physical address
Phone number
Fax number
E-mail address
Delivery or shipping information Delivery order number
Notice to deliver number
Delivery date
Quantity of product received or shipped
When a problem occurs at a school, a detailed description of the problem and contact information for the people
involved (e.g., customer reporting illness, personnel who prepared the food) should be kept. Food should not be
discarded until a sample is taken by the Health Department or instructed by state agency during a recall process.
Disposal of products is a CTE . A written record of all food discarded and the manner in which it was disposed of
should be maintained.
Freeze one or two servings of every batch of prepared food that has been cooled and reheated to use in the event of a
complaint. Label the product with recipe number and/or name, date of preparation, name of personnel who prepared
the item, date the item was served, and the date when the sample may be discarded. Note the products and product
number that were sampled and stored on production records. Keep for two weeks.
Central Production Facilities: Setup a schedule to randomly sample product on the production line and send
to a laboratory for microbial analysis. Record the product name, date of production, date of service, personnel
involved in production, and outcome of the analysis. Note the products that were sampled and stored on
production records.
Identifying Stakeholders and Their Responsibilities
It takes a team to respond to emergencies and many diferent school personnel may be involved, each fulflling
distinct roles. Some emergencies require roles that are not needed in other circumstances (Exhibit 5-2). Te size and
composition of the emergency response team will depend on the size of the district and the nature and scope of the
emergency. In addition to internal personnel, individuals representing outside agencies may play a role including the
health department, emergency frst responders, and state agencies.
CHAPTER 5: Responding to Food Emergencies including Recalls
41
EXHIBIT 5-2 Internal Roles Required for Various Emergencies
ROLE AND RESPONSIBILITY
BIOTERRORISM FOODBORNE
ILLNESS
NATURAL
DISASTER
RECALL
Local School District
Emergency Director –
Responsible for response, coordinates team activities, and
serves as single point of contact for outside agencies.
X X X X
Communication Coordinator –
Media and community spokesperson, drafs press releases,
posts notices to website, and conducts media briefngs.
X X X X
Logistics Coordinator –
Responsible for securing facility, providing accommodations
and transportation for response team, providing
communication e.g., phone, walkie-talkies
X X
Human Resources Coordinator –
Next of kin notifcation, counseling services, hiring of
temporary help needed for crisis
X X X
Supply Chain Coordinator –
Determines impact on products being shipped from facility,
current stock, and products due in.
X X X X
Product Disposal Coordinator -
Destroy and/or dispose of products in a manner that will not
harm people or the environment.
X X X X
Local Authorities
Police Department X
Fire Department X
Local Health Department X X X
Local Environmental Protection Agency X X
Local Environmental Health Association X X
State Authorities
State Health Department X
State Department of Agriculture X
State Agency responsible for USDA Foods program X X X
State Environmental Protection Agency X
State Environmental Health Agency X X
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Inventory Management and Tracking Reference Guide
ROLE AND RESPONSIBILITY
BIOTERRORISM FOODBORNE
ILLNESS
NATURAL
DISASTER
RECALL
Federal Authorities
USDA, FSIS (Meat, Poultry, Eggs, and USDA Foods)
X X X X
USDA, FNS
X X X X
Department of Health and Human Services (HHS)
Food and Drug Association (FDA)
Centers for Disease Control and Prevention (CDC)
X
X
X
X
X
X
Food Emergency Response Network (FERN) X X X
Federal Bureau of Investigation (FBI) X
Department of Homeland Security (DHS)
Emergency Preparedness and Response (EP&R)
Federal Emergency Management Agency (FEMA)
X X
Private Sector
Manufacturers and further processors
X X X
Distributors
X X
Private cold and dry warehouses
X X X
At a minimum, the director will be expected to provide information about the products served, when they were served,
the people who had access to the implicated food products, who received or was served the products, and how much
was consumed. Te accuracy and completeness of records will be crucial in determining the products involved and the
ability to control damage. Te director of school nutrition also may be assigned the role of supply chain coordinator
and product disposal coordinator or given other roles depending on the circumstances.
Commercial Products
School districts are responsible for ensuring the safety of commercial food items. USDA Foodand Nutrition Service
and state agencies do not know what foods school districts may purchase and cannot ensure product safety or inform
schools regarding commercial product recalls. When a commercial product is recalled that may be used in schools,
USDA and the state agency may send a general alert. Although most vendors will alert their customers of recalled
products, district personnel should track recalls by signing up for recall e-mail alerts on www.recalls.gov, which tracks
recalls for both FDA and FSIS. Districts also may sign up on GovDirect for notices from FNS about USDA Foods.
Links to both sites are included in the Resources section of this guide.
CHAPTER 5: Responding to Food Emergencies including Recalls
43
To report a problem with a food purchased commercially, contact the manufacturer directly. Information should include:
nproduct name and code (GTIN) number,
nlot, batch, and/or manufacturing or use-by date,
nclear statement of the problem,
nquantity of product afected and still on hand, and
nname and GLN of distributor and delivery date.
If a commercial food is suspected as the cause of a foodborne illness in schools, the local health department should
be contacted frst so they can assist in identifying the source of the illness. A written record should be kept of the
complaint. At no time should school nutrition personnel admit guilt before an investigation is complete.
USDA Foods (Brown Box and Processed)
In the case of USDA Foods, the school district, state distributing agency (SDA), and FNS all have responsibilities
for food safety (Exhibit 5-3). FNS is responsible for alerting state distributing agencies of any USDA Foods that
are recalled. For foods diverted to a processor, notifcations will come from the state agency and the processor.
State distributing agencies are responsible for alerting all recipient agencies, including school districts. FNS cannot
directly notify school districts because they do not know who has received product; however, schools may sign up
for the Commodity Alert System athttps://www.envoyprofles.com/USDA-ALERTS/ . Once the registration form is
completed, a confrmation email will be sent that explains how to activate your account. Be sure to follow directions in
the follow-up email to complete the registration process.
EXHIBIT 5-3 Agencies Involved With Recalls of USDA Foods
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Inventory Management and Tracking Reference Guide
When a problem occurs with a USDA Foods or a further-processed food product, it should be reported to the state
distributing agency, not FNS. Te SDA will determine if the problem can be resolved at the local or state level, and
if not, the SDA will report the problem to FNS. A record should be kept of the complaint. School districts should be
prepared to provide the following information to the SDA:
nUSDA Foods name and code number;
ncase codes including lot, batch, or manufacturing or use-by date;
ndescription of the problem with special circumstances involved;
ndate USDA Foods was received;
nquantity of product afected;
nquantity and physical address of product remaining and if the remaining product is afected or not;
ncontract number (may be stenciled on the outer carton);
ndelivery order number and notice to deliver number;
ndigital photographs of damaged product or foreign objects, if helpful; and
npayee information and documentation of loss if requesting reimbursement.
CHAPTER 6: Standard Operating Procedures
45
C H A P T E R 6
Standard Operating Procedures
Schools must comply with federal, state, and local regulations covering school nutrition programs, public health,
purchasing, and accounting practices as well as policies related to foodservice and business best practices. Standard
operating procedures (SOPs) clarify and simplify regulations and policies into a format that employees can use in their
work environment. Development of SOPs can:
nimprove processes;
nimprove compliance with regulations and policies;
nclarify and improve staf performance;
nidentify roles and responsibilities;
nprovide base content for training programs; and
nprovide instructions for immediate corrective actions if necessary.
Te concept of inventory management and tracking may be new to school nutrition staf. Creating new SOPs and
updating existing SOPs to address inventory management and tracking ensures school nutrition employees across the
district consistently handle inventory in a manner that controls cost, improves productivity, and provides safe products
with consistent quality.
Te SOPs in this chapter are intended to serve as examples. Each school nutrition operation must establish their own
SOPs to address their specifc products, personnel, equipment, processes, and needs.
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Inventory Management and Tracking Reference Guide
Tracking Products
(Sample SOP)
PURPOSE: To ensure that all food and supplies can be identifed and accounted for from the moment they are
received until they are consumed, disposed of, or shipped to a new location.
SCOPE: Tis procedure applies to employees who handle, prepare, or serve food.
KEY WORDS: Receiving, Storage, Production, Holding, Serving, Delivery, Tracking, Traceability
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. Compare delivery invoice against products ordered and products delivered for both delivery quantities and product
code or GTIN.
3. Record GTIN, lot number, and storage location in perpetual inventory system (manual or electronic) upon receipt of
product, when product is removed from storage, or when a product is disposed of.
4. Store products in labeled storage area. When products are removed from storage area, record GTINs and lot
numbers on storage requisition form. Use the storeroom requisition to update perpetual inventory system.
5. Record GTINs on production records. If a lefover product is used, include the date the product was originally
prepared on the production record.
6. If products are shipped to another location record the GTINs and lot numbers on the shipping record.
7. If a product is disposed of, record the GTIN and lot on a Damaged or Discarded Product Log. Use this log to update
the perpetual inventory system.
THE UNIT SUPERVISOR WILL:
1. Train employees on using the procedures in this SOP.
2. Post SOP in storage area.
MONITORING:
Te manager will observe products received, removed from storage, and produced. Te manager will also observe
products shipped each day to ensure that product numbers or GTINs and lot numbers are recorded.
CORRECTIVE ACTION:
1. Retrain any employee found not following the procedures in this SOP.
2. Remind employees where SOP’s are located.
CHAPTER 6: Standard Operating Procedures
47
Tracking Products, continued
(Sample SOP)
VERIFICATION AND RECORD KEEPING:
Te manager will complete the Site Inventory Management and Tracking Checklist monthly. Te Site Inventory
Management and Tracking Checklist will be kept for a minimum of 1 year.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
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Inventory Management and Tracking Reference Guide
Receiving Deliveries
(Sample SOP)
PURPOSE: To ensure that all food is received fresh and safe when it enters the school nutrition operation, to facilitate
traceability, and to transfer food to proper storage as quickly as possible.
SCOPE: Tis procedure applies to employees who handle, prepare, or serve food.
KEY WORDS: Cross-Contamination, Temperatures, Receiving, Holding, Frozen Goods, Delivery, Tracking,
Traceability
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. Organize freezer and refrigeration space, loading docks, and store rooms before deliveries.
3. Gather product specifcation lists and purchase orders, temperature logs, calibrated thermometers, pens, fashlights,
and clean carts before unloading deliveries. Refer to the Using and Calibrating Termometers SOP.
4. Keep receiving area clean and well lighted.
5. For USDA Foods deliveries, clip seal on truck.
6. Do not touch ready-to-eat foods with bare hands.
7. Mark products with the date of arrival or the “use-by” date accordingly upon receipt.
8. Compare delivery invoice with products ordered and products delivered for both delivery quantities and product
code or GTIN.
9. Record lot numbers on perpetual inventory cards, invoices, or other receiving records.
10. Transfer foods to their appropriate locations as quickly as possible.
THE UNIT SUPERVISOR WILL:
1. Train employees on using the procedures in this SOP.
2. Schedule deliveries to arrive at designated times when employees are available to check them in.
3. Post the delivery schedule, including the names of vendors, days and times of deliveries, and drivers’ names.
THE DIRECTOR OF SCHOOL NUTRITION WILL:
1. Establish a rejection policy to ensure accurate, timely, consistent, and efective refusal and return of rejected goods.
2. Determine whether foods will be marked with the date of arrival or the “use-by” date.
CHAPTER 6: Standard Operating Procedures
49
Receiving Deliveries, continued
(Sample SOP)
MONITORING:
1. the delivery truck periodically when it arrives to ensure that it is clean, free of putrid odors, and organized to prevent
cross-contamination. Be sure refrigerated foods are delivered on a refrigerated truck.
2. Check the interior temperature of refrigerated trucks.
3. Confrm vendor name, day and time of delivery, and driver’s identifcation before accepting delivery. If driver’s name
is diferent from what is indicated on the delivery schedule, contact the vendor immediately.
4. For USDA Foods delivery, check the seal on truck. If the seal is broken, contact the state distributing agency.
5. Check frozen foods to ensure that they are all frozen solid and show no signs of thawing and refreezing, such as the
presence of large ice crystals or liquids on the bottom of cartons.
6. Check the temperature of refrigerated foods.
a. For fresh meat, fsh, and poultry products, insert a clean and sanitized thermometer into the center of the product
to ensure a temperature of 41°F or below. Te temperature of milk should be 45°F or below.
b. For packaged products, insert a food thermometer between two packages being careful not to puncture the
wrapper. If the temperature exceeds 41°F, it may be necessary to take the internal temperature before accepting
the product.
c. For eggs, the interior temperature of the truck should be 45°F or below.
7. Check dates of milk, eggs, and other perishable goods to ensure safety and quality.
8. Check the integrity of food packaging.
9. Check the cleanliness of crates and other shipping containers before accepting products. Reject foods that are
shipped in dirty crates.
CORRECTIVE ACTION:
1. Retrain any employee found not following the procedures in this SOP.
2. Reject the following:
nFrozen foods with signs of previous thawing
nCans that have signs of deterioration, such as swollen sides or ends, fawed seals or seams, dents, or rust
nPunctured packages
nFoods with out-dated expiration dates
nFoods that are outside the safe temperature zone or deemed unacceptable by the established rejection policy
nItems with product codes or GTINs that do not match products ordered
50
Inventory Management and Tracking Reference Guide
Receiving Deliveries, continued
(Sample SOP)
VERIFICATION AND RECORD KEEPING:
Record the food temperature and corrective action on the delivery invoice or on the Receiving Log. Te manager will
verify that employees are receiving products using the proper procedure by visually monitoring receiving practices
during the shif and reviewing the Receiving Log at the close of each day. Receiving Logs are kept on fle for a
minimum of 1 year.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from the U.S. Department of Agriculture, Food and Nutrition Service, and the National Food Service Management
Institute. (2005). HACCP-based standard operating procedures (SOPs) designed to address food safety issues.
CHAPTER 6: Standard Operating Procedures
51
Transporting Food to Remote or Satellite Sites (Shipping Site)
(Sample SOP)
PURPOSE: To prevent foodborne illness by ensuring that food temperatures are maintained during transportation;
contamination is prevented; and aid product traceability by recording product codes and lot numbers.
SCOPE: Tis procedure applies to employees who transport food from a central kitchen to remote sites (satellite
kitchens).
KEY WORDS: Hot Holding, Cold Holding, Reheating, Cooling, Transporting Food, Tracking, Traceability
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. If State or local health department requirements are based on the 2009 FDA Food Code:
nKeep frozen foods frozen during transportation.
nMaintain the temperature of refrigerated, potentially hazardous foods at 41°F or below and cooked foods that are
transported hot at 135°F or above.
3. Use only food carriers for transporting food approved by the NSF or that have otherwise been approved by the state
or local health department.
4. Prepare the food carrier before use:
nEnsure that all surfaces of the food carrier are clean.
nWash, rinse, and sanitize the interior surfaces.
nEnsure that the food carrier is designed to maintain cold food temperatures at 41°F or below and hot food
temperatures at 135°F or above.
nPlace a calibrated stemmed thermometer or temperature data logger in the warmest part of the carrier if used for
transporting cold food, or the coolest part of the carrier if used for transporting hot food. Refer to the Using and
Calibrating Termometers SOP.
nPre-heat or pre-chill the food carrier according to the manufacturer’s recommendations.
5. Store food in containers suitable for transportation. Containers should be:
nRigid and sectioned so that foods do not mix.
nTightly closed to retain the proper food temperature.
nNonporous to avoid leakage.
nEasy-to-clean or disposable.
nApproved for food use and have National Sanitation Foundation emblem.
52
Inventory Management and Tracking Reference Guide
Transporting Food to Remote Sites (Satellite Kitchens), continued
(Sample SOP)
INSTRUCTIONS, continued:
6. Place food containers in food carriers and transport the food in clean trucks, if applicable, to remote sites as quickly
as possible.
7. Prepare shipping documents to include: date, product code, quantity shipped, and lot or batch number.
8. Follow Receiving Deliveries SOP when food arrives at remote site.
THE UNIT SUPERVISOR WILL:
Train employees on using the procedures in this SOP.
MONITORING:
1. Check the air temperature of the food carrier to ensure that the temperature suggested by the manufacturer is
reached prior to placing food into it.
2. Check the internal temperatures of food using a calibrated thermometer before placing it into the food carrier. Refer
to the Holding Hot and Cold Potentially Hazardous Foods SOP for the proper procedures to follow when taking
holding temperatures.
CORRECTIVE ACTION:
1. Retrain any employee found not following the procedures in this SOP.
2. Continue heating or chilling food carrier if the proper air temperature is not reached.
3. Reheat food to 165°F for 15 seconds if the internal temperature of hot food is less than 135°F. Refer to the Reheating
Potentially Hazardous Foods SOP.
4. Cool food to 41°F or below using a proper cooling procedure if the internal temperature of cold food is greater than
41°F. Refer to the Cooling Potentially Hazardous Foods SOP for the proper procedures to follow when cooling food.
5. Discard food held in the temperature danger zone (41º F to 135º F) for greater than 4 hours.
VERIFICATION AND RECORD KEEPING:
1. Before transporting food to remote sites, school nutrition employees will record food carrier temperature, food prod-
uct name and product code, time, internal temperatures, and any corrective action taken on the Hot and Cold Hold-
ing Temperature Log.
CHAPTER 6: Standard Operating Procedures
53
Transporting Food to Remote Sites (Satellite Kitchens), continued
(Sample SOP)
2. Te manager at central kitchens will verify that school nutrition employees are following this SOP by visually observ-
ing employees and reviewing and initialing the Hot and Cold Holding Temperature Log and shipping document
daily.
3. Te manager will complete the Food Safety Checklist daily. Te Food Safety Checklist is to be kept on fle for a mini-
mum of 1 year.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from the U.S. Department of Agriculture, Food and Nutrition Service, and the National Food Service Management
Institute. (2005). HACCP-based standard operating procedures (SOPs) designed to address food safety issues.
54
Inventory Management and Tracking Reference Guide
Receiving Food Shipped from Production Kitchen
(Sample SOP)
PURPOSE: To prevent foodborne illness by ensuring that food temperatures are maintained during transportation;
contamination is prevented; and product can be traced by recording product codes and lot numbers.
SCOPE: Tis procedure applies to satellite kitchen employees who receive food from a central kitchen.
KEY WORDS: Hot Holding, Cold Holding, Reheating, Cooling, Transporting Food, Tracking, Traceability
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. If State or local health department requirements are based on the 2009 FDA Food Code:
nCheck and record product code or GTIN, receiving temperatures, and corrective actions taken on the Receiving
Log upon receipt of food. Sign the shipping document and return it to the central kitchen.
nMaintain the temperature of refrigerated, potentially hazardous foods at 41°F or below and cooked foods that are
transported hot at 135°F or above.
THE UNIT SUPERVISOR WILL:
Train employees on using the procedures in this SOP.
MONITORING:
Check the internal temperatures of food using a calibrated thermometer when receiving it. Refer to the Holding Hot
and Cold Potentially Hazardous Foods SOP for the proper procedures to follow when taking holding temperatures.
CORRECTIVE ACTION:
1. Retrain any employee found not following the procedures in this SOP.
2. Reheat food to 165°F for 15 seconds if the internal temperature of hot food is less than 135°F. Refer to the Reheating
Potentially Hazardous Foods SOP. Reject food if it is less than 135°F and equipment is not available to reheat food.
3. Cool food to 41°F or below using a proper cooling procedure if the internal temperature of cold food is greater than
41°F. Refer to the Cooling Potentially Hazardous Foods SOP for the proper procedures to follow when cooling food.
4. Discard food held in the temperature danger zone for greater than 4 hours.
CHAPTER 6: Standard Operating Procedures
55
Receiving Food Shipped from Production Kitchen, continued
(Sample SOP)
VERIFICATION AND RECORD KEEPING:
1. Te manager at the remote site(s) will verify that employees are receiving foods at the proper temperature and fol-
lowing the proper receiving procedures by visually observing receiving practices during the shif and reviewing and
initialing the Receiving Log daily. All logs are kept on fle for a minimum of 1 year.
2. Te manager will complete the Food Safety Checklist daily. Te Food Safety Checklist is to be kept on fle for a mini-
mum of 1 year.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from the U.S. Department of Agriculture, Food and Nutrition Service, and the National Food Service Management
Institute. (2005). HACCP-based standard operating procedures (SOPs) designed to address food safety issues.
56
Inventory Management and Tracking Reference Guide
Handling a Food Recall – District Ofce
(Sample SOP)
PURPOSE: To prevent foodborne illness by quickly identifying and securing products in the event of a product recall.
SCOPE: Tis procedure applies to district-level personnel responsible for reporting recall information.
KEY WORDS: Food Recalls, Traceability, Tracking
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. Review the food recall notice and specifc instructions that have been identifed in the notice.
3. Check purchasing specifcations and receiving documents to identify products matching the product code or GTIN
and lot numbers identifed in recall notice.
4. Communicate the food recall notice to afected feeding sites using a method that confrms the message was received
and understood e.g., e-mail with read receipt.
5. Prepare instructions for the site personnel to hold the recalled product using the following steps:
nPhysically segregate the product, including any open containers, lefover product, and food items in current pro-
duction that contain the recalled product.
nIf an item is suspected to contain the recalled product, but label information is not available, segregate with other
foods containing recalled product.
nMark recalled product “Do Not Use” and “Do Not Discard.” Inform the entire staf not to use the product.
6. Arrange for food to be collected and disposed of as soon as possible or within 30 days per instructions contained in
the recall notice.
7. Do not destroy any USDA Foods without ofcial written notifcation from the State Distributing Agency, USDA
Foods Safety Inspection Services (FSIS), or State or local health department.
8. Inform the school district’s public relations coordinator of the recalled product and what steps are being taken to
secure and dispose of the product.
9. Obtain accurate counts of the recalled products from every feeding site, including the amount received, in inventory,
and amount used.
10. Account for all recalled product by verifying site inventory counts against records of food received at the feeding
site.
11. Identify and record in a spreadsheet whether any of the product was received in the district, the status of the
product (e.g., used, on-hand), locate the food recall product by feeding site, and verify that the food items bear the
product identifcation code(s) and lot and/or production date(s) listed in the recall notice.
12. Report the status of recalled product within 10 days to State distributing agency (for USDA Foods) or manufacturer
(for purchased and further processed food).
CHAPTER 6: Standard Operating Procedures
57
Handling a Food Recall, continued
(Sample SOP)
THE UNIT SUPERVISOR WILL:
Train employees on using the procedures in this SOP.
MONITORING:
Employees and manager will visually observe that school sites have segregated and secured all recalled products.
CORRECTIVE ACTION:
Retrain any employee found not following the procedures in this SOP.
VERIFICATION AND RECORD KEEPING
1. Employees will record the name and product code or GTIN, lot number of the contaminated food, date, time, and
the reason why the food was discarded on the Damaged or Discarded Product Log.
2. Te manager will verify that appropriate corrective actions are being taken by reviewing, initialing, and dating the
Damaged or Discarded Product Log each day. Maintain the Damaged or Discarded Product Logs for a minimum of
1 year.
3. Te school nutrition director will complete and maintain all required documentation related to the recall including:
nRecall notice
nRecords of how food product was returned or destroyed
nReimbursable costs
nPublic notice and media communications
nCorrespondence to and from the public health department and State agency
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from: National Food Service Management Institute. (2002). Responding to a Food Recall. University, MS: Author.
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Inventory Management and Tracking Reference Guide
Handling a Food Recall – School Site
(Sample SOP)
PURPOSE: To prevent foodborne illness by quickly identifying and securing products in the event of a product recall.
SCOPE: Tis procedure applies to site school nutrition employees who prepare or serve food.
KEY WORDS: Food Recalls, Traceability, Tracking
INSTRUCTIONS:
1. Follow State or local health department requirements.
2. Review the food recall notice and specifc instructions that have been identifed in the notice. Notify the central
ofce that the notice was received and understood.
3. Check receiving documents, perpetual inventory, requisitions, production records, and shipping records to identify
products matching the product code or GTIN and lot numbers identifed in recall notice.
4. Quarantine the recalled product using the following steps:
nPhysically segregate the product, including any open containers, lefover product, and food items in current
production that items contain the recalled product.
nIf an item is suspected to contain the recalled product, but label information is not available, follow the district’s
procedure for disposal.
5. Mark recalled product “Do Not Use” and “Do Not Discard.” Inform the entire staf not to use the product.
6. Do not destroy any products until directed to do so by the central ofce ofcial e.g., School Nutrition Director.
7. Identify and record whether any of the product was received at the site, the status of the product e.g., used, on-hand,
and verify that the food items bear the product identifcation code(s) and production date(s) or lot number listed in
the recall notice.
8. Notify shipping sites of any recalled product shipped, date shipped, and other specifc directions to be followed per
the recall notice.
THE UNIT SUPERVISOR WILL:
Train employees on using the procedures in this SOP.
MONITORING:
Te manager will visually observe that employees have segregated and secured all recalled products.
CORRECTIVE ACTION:
Retrain any employee found not following the procedures in this SOP.
CHAPTER 6: Standard Operating Procedures
59
Handling a Food Recall, continued
(Sample SOP)
VERIFICATION AND RECORD KEEPING
1. Employees will record the name and product code or GTIN, quantity, lot number of the recalled food, date, and time
on the Damaged or Discarded Product Log.
2. Te manager will verify that appropriate corrective actions are being taken by reviewing, initialing, and dating the
Damaged or Discarded Product Log each day. Maintain the Damaged or Discarded Product Logs for a minimum of
1 year.
3. Update perpetual inventory record with adjustment – recall.
DATE IMPLEMENTED: __________________________ BY: _______________________________________
DATE REVIEWED: ______________________________ BY: _______________________________________
DATE REVISED: ________________________________ BY: _______________________________________
Adapted from: National Food Service Management Institute. (2002). Responding to a Food Recall. University, MS: Author.
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Inventory Management and Tracking Reference Guide
Inventory Management and Tracking Checklists
Te following checklists may be used along with SOPs for monitoring site and central ofce processes afecting inventory. Te
central ofce checklist should be used at least twice per year. Te site checklist should be used a minimum of once per month.
Central Ofce Inventory Management and Tracking Checklist
TASK STATUS
Menu Planning Yes No Corrective Action
Cycle menus are used.
Menus are planned centrally with one menu used for each site or
production type (e.g., elementary schools, satellite schools)
Both reimbursable meals and a la carte oferings are specifed on
menus and production records.
Menu selections are based on production and sales history.
Menus ofer only items with sales of at least 25 servings.
Menus are planned by January of prior year so that USDA Foods
orders and bids can be based on menu forecasts.
Procurement Yes No Corrective Action
Only items on menu are included on bid.
Only items with daily sales of 25 or more servings on average per site
are included on bids.
Specifc product code numbers or GTIN numbers are included in bid
specifcations for pre-approved items.
Bid instructions require vendors to specify product code numbers or
GTINs in bid responses.
Once bids are accepted, only products with specifed product codes are
accepted for delivery unless a substitution is approved in advance.
Menus are provided to vendors in advance of orders.
GLN numbers are obtained for the district and each delivery site.
Vendor and delivery site GLNs are included on invoices and advanced
shipping notices.
Forecasting and Ordering Yes No Corrective Action
Managers are provided with an ordering calendar specifying when
each order is to be placed.
CHAPTER 6: Standard Operating Procedures
61
TASK STATUS
Forecasting and Ordering Yes No Corrective Action
Par values are set for applicable items.
Managers do not have to place orders when an order is still in transit
(placed but not received).
Managers are provided order guides matching menus.
Orders are approved by supervisor.
Receiving Yes No Corrective Action
Site personnel are provided with an SOP for receiving.
At least one employee at each site is trained in receiving procedures.
Receiving personnel are provided with product specifcations including
product codes or GTINs.
Bids contain requirements for delivery times so that deliveries are
made when receiving personnel are available.
Receiving complaints are logged so that poor vendor performance can
be addressed and mitigated.
Storage Yes No Corrective Action
Storage areas keys are distributed to only those requiring access and are
signed for when issued.
An SOP is provided to site managers and personnel covering kitchen
visitors and customers access to storage and preparation areas.
An SOP is provided to site managers and personnel covering proper
dry, refrigerated, and freezer storage.
An SOP is provided to site managers and personnel on the issuing
process.
Inventory Control Yes No Corrective Action
Inventory level goals (e.g., days of inventory on hand) are established
for each site.
Site inventory levels are monitored monthly and corrective action is
taken when needed.
Automated or manual perpetual inventory systems are in use.
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Inventory Management and Tracking Reference Guide
TASK STATUS
Product codes or GTIN and lot numbers are required in inventory
records (e.g., perpetual inventory cards, storeroom requisition)
Follow-up is performed when there are discrepancies between “book”
value and physical inventory to determine cause.
Physical inventories are required on the last working day of each
month.
Inventory Control Yes No Corrective Action
Food cost goals (as a % of revenue) are set for each site and shared
among all site managers.
Cost of food used is calculated each month for each site.
Production Yes No Corrective Action
Production records have columns for waste and cost so that managers
can see the value of food wasted.
Production records are preprinted to match menus.
Production records contain product codes or
GTIN and have blank cells for lot numbers.
Recipes are developed so that typical production will match pan size
and smaller pans are specifed for smaller batches.
An SOP is provided to site manager and employees covering disposal
of unusable lefovers.
Service Yes No Corrective Action
Policies are developed for how thef will be handled for employees,
customers, and vendors.
Portion sizes and serving utensils are specifed on menus and/or
production records.
Sales inventory records are used on each serving line, at least for a la
carte items, to track sales of each item.
CHAPTER 6: Standard Operating Procedures
63
Site Inventory Management and Tracking Checklist
TASK STATUS
Menu Planning Yes No Corrective Action
Menus are consistently followed. Pre-approved substitutions are
made when necessary.
Feedback is provided to menu planners about popularity of
menus based on production and sales records.
Any issues with menu quality or difculty of preparation are
reported to the menu planner.
Forecasting and Ordering Yes No Corrective Action
Order guides are used when placing orders.
Forecasting and Ordering Yes No Corrective Action
Par values are used for applicable items.
Production records from previous menu cycle are used for
forecasting production.
Only items needed to prepare menu selections are ordered.
Inventory is checked before placing orders.
Receiving Yes No Corrective Action
Site personnel follow the SOP for receiving.
Only trained employees receive food and supplies.
GTIN or product codes are checked and lot
numbers recorded when products are received.
Products sold by weight are weighed when received.
Product substitutions are not accepted unless pre-approved.
Storage and Issuing Yes No Corrective Action
Storage areas are kept locked throughout the day, especially
during meal service.
An SOP is followed for kitchen visitors and customers access to
storage and preparation areas.
An SOP is followed for proper dry, refrigerated, and freezer storage.
An SOP is followed on the issuing process.
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Inventory Management and Tracking Reference Guide
TASK STATUS
Inventory Control Yes No Corrective Action
Inventory level meets specifed goals e.g., days of inventory on hand.
Physical inventory is taken on the last day of each month.
Two employees are assigned to take physical inventories.
A perpetual inventory is maintained daily.
Product codes or GTIN, lot numbers, and storage
location are recorded in inventory records (e.g.,
perpetual inventory cards, storeroom requisition).
Storage areas are labeled with product codes and organized with
highest volume products closest to the door.
Products are kept in original cases and lot numbers are written on
inner packages (or cut from case and kept) when removed from
case.
Inventory Control Yes No Corrective Action
Heavy items are kept on lower shelves. Dollies, dunnage racks,
and carts are used to store food.
Chemicals are stored away from food and paper supplies.
Production Yes No Corrective Action
Production records are completed immediately afer each meal.
Production records are completed with
product codes or GTIN and lot numbers.
Food is prepared by cooking small batches every 30 minutes or
before each serving period.
Stockout times are recorded on production records to improve
future forecasts.
An SOP is followed for disposal of lefovers.
Service Yes No Corrective Action
Specifed portion sizes and serving utensils are used.
Sales inventory records are used on each serving line, at least for a
la carte items, to track sales of each item.
APPENDIX
65
Appendix
Appendix: Language for Bids and Processing Agreements
Recipient Agency and Distributor Agreement (Excerpts)
Food Defense Responsibilities
Distributor must have Hazard Analysis Critical Control Point (HACCP) and food defense plans on fle that may be
reviewed by school district for recall procedures. Tis should include, but not be limited to:
a) Distributor must have traceability systems in place from receipt to delivery to designated delivery site.
b) Distributor must provide evidence of conducting a mock recall for product once per year.
c) Distributor must provide 24/7 accessibility of staf in the event of a USDA Recall—individuals with contact numbers
and back ups must be provided with the bid document.
d) Distributor must have public notifcation capability on website to provide updates on USDA Recall information for
customers.
OR
e) Distributor must provide a communication plan to the school district for food recalls.
Distributor Responsibilities
Reporting and Reimbursement:
a) Distributor agrees to provide school district with a report of product usage by item code and manufacturer (in lieu of
data transfer) in a format specifc by school district.
OR
b) Te Distributor agrees to provide data transfer of product usage by item code and manufacturer to school district’s
designated system via electronic channels either daily or weekly (choose one). File format is listed below.
c) Te Distributor agrees to provide a monthly remaining USDA Foods product inventory report to the school district.
66
Inventory Management and Tracking Reference Guide
Type of Data Transmission: Fixed Length Flat File
Length Position Description
10 1-10 Distributor Number (assigned by Processor)
35 11-45 School District Name
35 46-80 School District Address1
35 81-115 School District Address2
35 116-150 City
03 151-153 State
10 154-163 Zip Code
16 164-179 Phone
20 180-199 Invoice Number (Distributor)
10 200-209 Invoice Date
18 210-227 Processor’s Product Code
18 228-245 Case Count
13 246-258 Allowance Amount
10 259-268 School number assigned by Distributor
15 269-283 School Recipient Agency # (assigned by State)
10 284-293 Catch Weight Pounds
10 294-303 Bid Number
10 304-313 Vendor number (Distributor’s number for Processor)
Note:
nNumeric values should be right justifed within data element length and should not be preceded by zeros.
nNon-numeric values and dates should be lef justifed within data element length
nDates should be in the format: 05/21/2010 (four digit year)
nUse a fle name that identifes distributor name and date (i.e., abcdistribution_093004)
Adapted from: American Commodity Distribution Association. (2010). Recipient agency commodity processing handbook. Appendix 11.
RESOURCES
67
Resources
Manuals
American Commodity Distribution Association. (2006). Food safety/food defense response plan.http://www.
commodityfoods.org/fles/FOOD%20SAFETY%20RESPONSE%20PLAN.doc
American Commodity Distribution Association. (2010). Recipient agency commodity processing handbook.http://www.
commodityfoods.org/fles/RA%20Processing%20Handbook%20-%20FINAL%20March%202010.pdf
U.S. Department of Agriculture, Food and Nutrition Service. (2004). A biosecurity checklist for school nutrition
programs: Developing a biosecurity management plan. FNS-364http://healthymeals.nal.usda.gov/hsmrs/biosecurity.pdf
U.S. Department of Agriculture, Food and Nutrition Service, & National Food Service Management Institute. (2005).
HACCP-based standard operating procedures (SOPs).
U. S. Department of Agriculture, Food and Nutrition Service, & National Food Service Management Institute. (2011).
Responding to a food recall.
Website Resources
American Commodity Distribution Associationhttp://www.commodityfoods.org/index.php
American National Standards Institute (ISO 22000:2005, ISO 22005:2007)http://www.ansi.org/
Best if Used - By – USDA Guidance for Inventory Control in Schools and Warehouseshttp://www.fns.usda.gov/FDD/facts/biubguidance.htm
Choice Plus: A Reference Guide for Foods and Ingredientshttp://www.nfsmi.org/documentlibraryfles/PDF/20080201030612.pdf
Commodity Alert System (USDA Foods recall notifcation)https://www.envoyprofles.com/USDA-ALERTS/
From Field to Fork, Archive for the ‘Traceability’ Category, Produce Marketing Association (PMA)http://feldtofork.pma.com/?cat=17
Federal Food Safety Information (commercial recall notifcation)http://www.foodsafety.gov/keep/recalls/
Food Safety and Inspection Servicehttp://www.fsis.usda.gov/About_FSIS/index.asp
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Inventory Management and Tracking Reference Guide
Foodservice GS1 US Standards Initiativehttp://www.gs1us.org/faqs/foodservice_faqs
Food Safety Working Grouphttp://www.foodsafetyworkinggroup.gov/
Global Food Safety Initiative (GFSI)http://www.ciesnet.com/2-wwedo/2.2-programmes/2.2.foodsafety.gfsi.asp
Institute of Food Technology – Food Product Tracinghttp://www.if.org/knowledge-center/focus-areas/food-safety-and-defense/traceability.aspx
Meat Poultry Grouphttp://www.mpxml.org/
Produce Traceability Initiativehttp://www.producetraceability.org/
Recall Alerts
www.recalls.gov
Safe Quality Food Institute (Standards SQF 1000/SQF 2000)http://www.sqf.com/standards/
USDA Foods Fact Sheetshttp://www.fns.usda.gov/fdd/schfacts/default.htm
USDA Web-based supply chain managementhttp://www.fns.usda.gov/fdd/WBSCM/default.htm
REFERENCES
69
References
Alfaro, J.A., & Rabade, L.A. (2009). Traceability as a strategic tool to improve inventory management: A case study in
the food industry. International Journal of Production Economics, 111, 104-110.
American Commodity Distribution Association. (2006). Food safety/food defense response plan. Retrieved March 4,
2010 fromhttp://www.commodityfoods.org/fles/FOOD SAFETY RESPONSE PLAN.doc
American Commodity Distribution Association. (2010). Recipient agency commodity processing handbook. Retrieved
March 4, 2010 fromhttp://www.commodityfoods.org/fles/RA Processing Handbook - FINAL
March%202010.pdf
Becker, G.S. (2009, December). Te federal food safety system: A Primer. CRS Report for Congress, Congressional
Research Service, Order code: RS-26600. Retrieved April 7, 2010 fromhttp://www.nationalaglawcenter.org/assets/crs/
RS22600.pdf
Daf, L., Arcoss, A., Hallawell, A., Root, C., & D.W. Westfall. (1998). U.S. Department of Agriculture, Food and
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ACRONYMS
73
Acronyms
AI Application identifers
AMS Agriculture Marketing Service
CDC Centers for Disease Control and Prevention
CTE Critical tracking event
DHS Department of Homeland Security
EFR Efcient Foodservice Response
EPC Electronic Product Code
EP&R Emergency Preparedness and Response
FBI Federal Bureau of Investigation
FDA Food and Drug Administration
FEMA Federal Emergency Management Agency
FERN Food Emergency Response Network
FSA Farm Service Agency
FNS Food and Nutrition Service
FSIS Food Safety and Inspection Service
GDSN Global Data Synchronization Network
GTIN Global trade item number
GLN Global location number
HACCP Hazard Analysis and Critical Control Points
HHS Department of Health and Human Services
RFID Radio frequency identifcation tag
SOP Standard operating procedure
SKU Stockkeeping unit
TCS Time and temperature control for safety
UPC Universal product code
USDA United States Department of Agriculture
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GLOSSARY
75
Glossary
Application Identifers (AIs): A section of a GS1 bar code found on product packaging enclosed in parentheses used
to identify additional information such as weight, count, lot numbers, country of origin, and production date.
Adulterated: A product that has been contaminated with a foreign substance causing it to be unsafe for usage.
Batch Cooking: Preparing smaller quantities of food as needed throughout the serving period rather than preparing
the total quantity needed at one time.
Bioterrorism: Te deliberate use of biological, chemical, physical, or radioactive agents for the purpose of causing
harm.
Brown box USDA Foods: USDA Foods labeled with plain USDA labels instead of a commercial label. Te name
originated from the brown shipping boxes used to ship these products.
Carrying costs: Costs for transporting, handling, and storing inventory.
Critical tracking event (CTE): A point at which a product is moved between sites, a product is transformed, or any
point where a record is required in order to trace a product.
Cycle Menu: Menus that are repeated over a period of time e.g., every three weeks.
Cycle Counts: Physical count of a small group of randomly selected products on a periodic basis. Typically used in
high volume operations when a monthly physical inventory may not be practical.
Efcient Foodservice Response (EFR): A voluntary initiative where members of the foodservice supply chain studies
methods to eliminate waste and excess cost.
External supply chain: Members of the supply chain outside the school district including vendors, brokers, customers,
and agencies that handle products or product information.
Foodborne illness: An illness carried or transmitted to people through food.
Global Data Synchronization Network (GDSN): An internet-based network of interrelated databases containing
product information and the GS1 Global Registry that allows companies to exchange standardized and synchronized
information with their trading partners.
Global Location Number (GLN): Te GS1 Identifcation Key used to identify physical locations such as a
manufacturing plant or legal entities such as the manufacturer’s corporate ofce. Te 13-digit key is comprised of a GS1
Company Prefx, Location Reference, and Check Digit.
Global Trade Item Numbers (GTIN): Te GS1 Identifcation Key used to identify products such as a specifc brand,
unit of measure, and product code. Te key is comprised of a GS1 or UPC company prefx and an item identifcation
number.
Hazard analysis and critical control points (HACCP): A food safety system based on principles to identify, evaluate,
and control hazards.
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Indirect Discount: Applying a discount for the fair market value of USDA Foods on processed products on the invoice;
also referred to as “net of invoice”.
Internal supply chain: Members of the supply chain within the school district including district-owned warehouses,
central production facilities, schools, the central school nutrition ofce, and the accounting department that handle
products or product information.
Inventory: Food and supplies purchased for an organization but not yet used.
Lot: Te batch or lot number that associates an item with information the manufacturer considers relevant for
traceability of the trade item (e.g., the time and date the product was manufactured).
Par Value: Te amount of product needed to fulfll menu requirements for one ordering period plus a small amount
for safety stock.
Perpetual Inventory: Continuous recording of all receipts and issues of products in storage providing a balance of each
item at all times.
Physical Inventory: Periodic actual count of products in storage areas.
Radio Frequency Identifcation Tag (RFID): An electronic tag encoded with an Electronic Product Code (EPC) used
to identify products within a supply chain. Te 14-digit GTIN number was designed so that it could be used as an EPC
code in RFID tags.
Recall: A process used to remove products from the marketplace when there is reason to believe the products may be
contaminated, misbranded, or cause health problems.
Safety Stock: A small amount of product kept on hand to accommodate an unexpected rise in customer demand or a
late delivery.
Shelf Life: Length of time a food may be stored before safety or quality is diminished.
Shrink: Loss of product due to waste, damage, spoilage, and thef.
Single Inventory Method: Maintenance of a single inventory for all food and supplies, including USDA Foods.
Standard Operating Procedure (SOP): Detailed written instructions for a process that must be followed to ensure a
desired outcome.
Stockkeeping units (SKU): An item of stock that is completely specifed as to size, favor, color, recipe, and any other
attribute (e.g., two favors of gelatin are diferent SKUs).
Stockouts: Running out of a stockkeeping unit when there is still demand for the item.
Supply chain: Te system of interrelated departments, businesses, and agencies through which products, services, and
product information fows beginning with raw materials and ending with the fnal customer.
Supply chain orientation: An organization’s ability to build and maintain a culture and value system that supports
relationships with supply chain partners.
GLOSSARY
77
Time and temperature control for safety (TCS) foods: Foods that need time and temperature controls to prevent the
product from becoming unsafe due to biological hazards.
Traceability: Te ability to trace the history, use, or location of a product.
Trace back or trace: Te ability to determine the origin attributes or history of an item in the supply chain by
referencing records held by each entity.
Trace forward or track: Te ability to determine the path a traceable product takes through the supply chain on its way
to the end customer.
Universal Product Codes (UPC): A 12-digit GTIN bar code used to uniquely identify a product and the company that
owns the product brand.
USDA Foods: Foods purchased by USDA for use in school nutrition programs.
doc_714262167.pdf