A Treatise on Baking

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Increasing Bakery Efficiency

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Chapter XIV

INCREASING BAKERY EFFICIENCY

Foreword

This chapter is divided into three sections. Section one explains the importance of maintaining a suitable system of accounting. Section two describes a system of accounting and records which has proven successful. Section three discusses the control of invisible losses which are revealed by the operation of systematic records and accounts.

• [Section 1]
• [Section 2]
• [Section 3]

Section One
THE NECESSITY OF COST ACCOUNTING

SECTION ONE:
THE NECESSITY OF COST ACCOUNTING

I. THE NECESSITY OF AN ACCOUNTING SYSTEM

Success in the baking business today has proven itself to be dependent on the efficient production and merchandizing of quality goods together with the maintenance of an adequate system of accounting and management.

The major portion of this book has dealt with the various basic ingredients entering into bakery products and the different steps in modern bakery manufacturing methods. However, the use of good raw materials, the adoption of up-to-date manufacturing processes and the operation of effective advertising and merchandizing policies will not spell success for the baker unless utmost efficiency in production and selling also prevails. Real efficiency in manufacture, selling and general management of a bakery means the minimizing of controllable losses and is impossible without the continuous maintenance of accurate records and accounts.

Sometimes a baker suddenly wakes up to the fact that he is bankrupt and is at a loss to understand why. An investigation in such cases frequently shows that the lack of an adequate accounting system is the basic cause of the failure.

In other instances a baker may say: “My goods are of the finest quality, my shop is clean, my windows and store attractive, my delivery wagon and driver neat,—and I have advertised well. I’m selling a lot of goods at what I believe to be a fair price, but I’m not making much money. What’s the matter?”

Usually the answer to this is: “How about your cost accounting system. Do you know what every article costs to produce, do you know what lines are paying and just how much,—and—what’s more important, are you carrying any lines which are actually losing money for you?”

Without a suitable system of accounting even at best business is a gamble. If you do not maintain adequate accounts and records, you can easily lose money and material through theft or careless waste without your even knowing it. You may overcharge the public on one article and undercharge on another. If the average keeps your head above water and your business shows a profit, all well and good; but if on the other hand, at the end of the year you show a loss, then it is too late to repair

the damage done. By installing and operating a simple system of accounting you will eliminate all guess work. You will know what factors enter into the cost of each product, and the price you should get for it in order to insure a fair profit. You will be able to recognize any unnecessary losses in material as well as goods damaged in the process of being made, so that the conditions responsible for this may be corrected. You will know how much money,you can afford to spend on advertising and sales promotional work. You will know what routes are paying the best. You will be able to recognize various items of expense which can be lowered. You will be able to know how much work is accomplished by each employee. You will be free from worry inasmuch as you will know at all times just how your business stands.

II. INCOME TAX REPORTS REQUIRE THE OPERATION OF AN ACCOUNTING SYSTEM

The necessity of rendering an accurate income tax statement should compel every business man to know just where he stands financially at the end of the year. Without an adequate system of accounting, this of course is impossible.

III. A SIMPLE MEANS OF ESTABLISHING AN ACCOUNTING SYSTEM

While many owners of bakeries are not bookkeepers or accountants, themselves, they should recognize the importance of the installation and operation of a simple yet satisfactory system of accounts.

If the business is small and does not warrant the continuous services of an expert accountant it should always be remembered that it is a simple matter to hire such an expert to install a suitable accounting system which can then be kept up and operated by a clerk or bookkeeper, or even by the proprietor himself. Usually this will mean the saving of considerable money in the long run and will pay many times over for the cost of installation and operation.

IV. ALL ACCOUNTS AND RECORDS SHOULD BE EXAMINED AND AUDITED

To make sure that the books of the bakery are accurately kept, they should be inspected regularly by the owner of the bakery or by an outside accountant. While it is to be expected of course that every employee is honest, it is a well known fact that occasionally money is stolen by those who are entrusted to handle it. By skillful manipulation of the cash records, it is possible for a bookkeeper or cashier to camouflage such a theft so that it will escape detection, unless all of the records are carefully examined and audited. While such instances are rare, nevertheless they have happened and probably will continue to occur just so long as periodic and thorough examination of all of the accounts and books is neglected by the proprietor.

V. THE ESSENTIAL FACTORS IN ANY ACCOUNTING SYSTEM

The exact system of accounts to be operated of course, will depend on the size of the shop and whether it is a wholesale or retail business. But there are certain fundamental principles to bere certain fundamental principles to be followed by every baker in order to be successful.

First: Take a thorough inventory at definite intervals.

Second: Know how much each article costs to produce.

Daily selling cost and overhead may be calculated by dividing the monthly selling cost and overhead by the number of working days in the month.

VI. THE RECOGNITION OF DEPRECIATION CHARGES

When asked about his accounting system one baker said: “What do I want to worry about books for. At the end of the year, I’m ahead of the game, and business is fine. Why should I bother with a lot of detail.” But that very baker may be gradually failing and not even realize it. He is forgetting that his machines are wearing out, and that he will have to replace his delivery trucks in a short time. Below is a list of approximate nominal depreciation rates showing average figures for yearly depreciation. These are of interest because many bakers forget them:

When a dough mixer turns out a batch of dough, part of the price of this machine should be charged to the manufacturing costs or general expense. A small portion of the price of show cases and store equipment must also be charged to selling costs. We all know that even constant repairs will not keep machinery, equipment, buildings, etc., in their original condition. It is inevitable that sooner or later buildings must be torn down and replaced, and new show cases must eventually be substituted for old ones. Therefore, to figure costs accurately it is necessary to add in this a small percentage of the cost of buildings, equipment, etc., which will in time replace worn out equipment. Remember this,—depreciation mustnotbe forgotten.

Blind business is worse than no business, and a business without a cost system is like a man without eyes. It is blind and although it may keep going for a while no one knows into what pit it may stumble. The installation and operation of a suitable accounting system are the “eyes” of any business.

Now there are many different efficient systems of maintaining records and accounts for a baking business, but their underlying principles are quite similar. One system which has been adopted and proven successful by many bakers is explained very briefly in the following section of this Chapter.

Section Two
WIHLFAHRT’S SYSTEM OF ACCOUNTING

SECTION TWO:
WIHLFAHRT’S SYSTEM OF ACCOUNTING

I. FOREWORD

It is extremely difficult to give a complete and clear description of any particular system* of bakery accounting without accompanying illustrations of the “forms” used and specimen pages of the actual books in which the various necessary entries are made.

The various forms and specimen sheets pertaining to an accounting system entitled “Increasing Bakery Efficiency” by J. E. Wihlfahrt, can be secured through representatives of the Fleischmann Company at small cost.

However, due to the size of many of the forms and pages used it is not possible to include them in this chapter and the following description of these various forms and their purpose probably will only be clear to those who are more or less familiar with bookkeeping, work.

II. INTRODUCTION

In starting an Accounting System where it is expected to keep a set of books, it is absolutely necessary to take a complete inventory of the assets.

This inventory should contain a complete list and valuation of the following:

• Real Estate including Building Lot, Bakery, Office, Store, Stable, Garage, etc.
• Machinery and Ovens.
• Other Shop and Store Equipment such as Trucks, Show Cases, Pans, Racks and Utensils.
• Delivery Equipment.
• Office Furniture and Fixtures.
• Cash—(Currency on Hand and Balance in Bank).
• Accounts Receivable.
• Miscellaneous Supplies.
• Baking Material—Bread Shop, Cake Shop.

In order to include in the cost of manufacturing the inevitable depreciation on machinery and utensils, delivery equipment, office furniture and fixtures, etc., it is necessary to make calculations of Fixed Charges based on the inventory valuations, as illustrated under “VI—Section One” of this chapter. It is also necessary to take into account a weekly or monthly proportion of insurance and taxes paid during the year.

A separate ledger for customers should be used. Daily purchases are to be charged and collections credited to the respective accounts from the entries made at the back of the daily salesmen’s Settlement Sheets.  A controlling account to cover these accounts is to be carried in the general ledger under the title of Accounts Receivable.

To keep a Cost Accounting System in the bakery we must consider these departments:

• First, the Manufacturing Department,
• Second, the Selling Department,
• Third, the Office.

III. HANDLING OF STOCK

A. IMPORTANCE

One of the most important factors in the efficient operation of a bakery is- the careful handling of stock and the maintenance of accurate stock records.

As explained in the following paragraphs an accurate record of all stock may be easily kept by the use of special records for the Bread Department, Cake Department and Miscellaneous Supplies. However, a similar record may be maintained by the use of a stock ledger if so desired. An actual physical inventory of stock on hand should be taken at the close of each week.

B. STOCK RECORDS

1. Stock Recapitulation Sheet—Bread Dep’t

(a) PURPOSE

The purpose of this record is to show at all times, the amount of bread department material on hand, purchased and used. This record is divided into two sections, “Stock Received” and “Stock Used.” The Section showing “Stock Used” also shows a summary of any excesses or shortages and cost of the stock.

(b) OPERATION

Stock Received

1. Enter inventory of stock on hand at beginning of the week.
2. Enter all material received during the week.
3. At the end of the week add up all columns. The total amount of each ingredient to be accounted for is thus shown.

Stock Used

1. Each day, the amount of each ingredient used is secured by totalling the amounts shown on the dough reports for the day.
2. The total amount of each ingredient used is entered on the “Stock Used” record daily.
3. At the end of the week add up all columns. Thus the total amount of each dough batch ingredient used is shown.
4. At the right side of the “stock used” record there should be a space for the entering of Extra Materials used such as dusting flour, trough grease, etc. Each day the total amount of such ingredients should be secured from the dough reportsandentered.
5. At the end of the week these “extra materials” are totalled.
6. The inventory of stock on hand at the end of the week is taken and entered on a separate line just below the line on which the total amount of materials used during the week is entered.
7. The total amount of each ingredient used as figured from the dough reports during the week is added to the amount of each ingredient on hand at the end of the week as shown by the inventory and the grand total is shown.
8. This grand total of ingredients should be equal of course, to the respective amounts of ingredients to be accounted for as shown by the inventory at the beginning of the week, plus that received during the week and as entered on the “Stock Received” record.
9. If these totals do not agree the difference in each instance represents “stock over” or “stock short” as the case may be. If there is any “stock over,” there undoubtedly has been an error in the weights of material received,—in recording in the inventories, the dough reports or stock records. If there is any “stock shortage,”—this represents a loss which should be investigated and the cause of this loss eliminated.
10. The total stock actually used up including any shortages or excess is secured by subtracting the material inventoried at the end of the week from the sum of the amount at hand at the beginning of the week plus that received during the week.
11. The cost of each material actually used is shown, and then the total cost of all materials used is entered accordingly.

2. Stock Recapitulation Sheet—Cake Dep’t
Purpose and Operation

The purpose and operation of this record is the same as the stock recapitulation sheet for the Bread Department as described above.

3. Stock Record of Miscellaneous Supplies

(a) PURPOSE

The stock recapitulation sheets for Bread and Cake are records of all the stock actually entering into the manufacture of bread and cake. Materials such as wax paper, cake boxes, wrapping paper, etc., used in marketing baked goods are recorded on a separate sheet entitled “Stock Record of Miscellaneous Supplies.”

(b) OPERATION

1. Enter miscellaneous stock on hand at beginning of week as shown by inventory and also cost of same.
2. Enter miscellaneous stock purchased during the week.
3. Enter miscellaneous stock issued during the week, indicating whether issued to the bread department, cake department or store.
4. Calculate total cost of material used during the week.
5. Record balance of materials on hand at end of week.

4. Stock Ledger

(a) PURPOSE AND OPERATION

A stock ledger is kept by some bakers as one means of maintaining a permanent record at all times of their stock purchased, used and on hand. In cases where such a ledger is used, each material is entered on a separate page.

IV. MANUFACTURING DEPARTMENT

A. PRODUCTION COST SHEETS

1. Purpose and Operation

These sheets are used so that each formula may be calculated, showing the amounts of each ingredient used, the formula weight and the net weight of the dough after allowing fermentation and evaporation losses. The material cost and total selling price desired is also listed. The total selling price desired is divided by the selling price per unit. This quotient represents the number of counts required. If this is divided into the net weight of the dough in ounces, the result will represent the required scaling weight per unit. If the scaling weight calculated in this manner does not result in the desired weight of each unit of finished baked goods, then the scaling weight will have to be changed accordingly. This of course will bring about a corresponding change in the number of units produced from the dough batch. A similar cost production sheet is used for cakes. The maintenance of accurate production cost sheets is very important.

B. BREAD SHOP ORDER AND CAKE SHOP REPORT

These shop orders show the total amount of the various kinds of goods required and ordered by the salesmen and store and are compiled by a clerk and entered on these forms which are turned over to the foreman so that he will know the amount of each kind of goods which will have to be made up, and be guided thereby. The foreman should enter on these forms the various “counts” actually produced from each batch as well as the totals.

C. DOUGH REPORT

1. Purpose and Operation

This dough report is made out by the foreman as a summary or record of his work for the day. The information on this report shows the different doughs made up, the formula and fermentation period of each, together with actual amount of materials used, thus furnishing the necessary data for the stock records.

D. BREAD ORDER SLIP—SALESMAN OR STORE
CAKE ORDER SLIP—SALESMAN OR STORE

These order slips are made out to enable the office to know just what amount of each different item will be required for each trip during the day. In this way the clerk can total all of the items listed on these various order slips and make out his shop order for the foreman of the bakery accordingly.

E. WEEKLY REPORT OF COST OF MANUFACTURE

This report shows the total amount of each ingredient used during the week and the cost of each. At the bottom of this report the total cost of the materials is shown and also the gross value of the goods produced.

V.  SELLING DEPARTMENT

A. ROUTE BOOK

Each salesman should be required to maintain a route book with a page for each customer. This shows the amount of business done each day with each customer.

B. RETURN SLIP

After the orders have been filled and the men have returned from their respective trips, each salesman’s returns should be noted on a “Return Slip” showing exactly the quantities and kind of a product they returned so as to be able to check their orders the following week and get a better check on Stale Returns.

C. SETTLEMENT SHEET FOR SALESMAN

As the salesman comes to the office, his transactions should be noted on the Settlement Sheet provided for salesmen which has its proper caption for bread, cake and pies received, also a caption for “Returns.” The total value of his load must be entered on the top line opposite caption “Total Charge.” His returns for cash sales, accounts receivable and any sundry credits or shortages he may have, must be entered on separate lines, and then added up. The total of this column must correspond with the total charge on the top line. On the reverse side of this sheet there should be a caption for “Accounts Receivable (Authorized Credits),” under which will be entered his credit sales. Opposite this should be a caption for “Outstanding Accounts Collected,” the total amount of which is entered in its proper place on the front of this sheet. Adding this amount to his cash sales item, the total comprises the “Total Cash” to be credited to his account.

Under the caption “Cash Returns” should be specified, as provided, the amounts in bills and coin and below that the names and amounts of the checks turned in. The total of these items should agree with the “Total Cash” referred to.

D. SETTLEMENT SHEET FOR STORE

Each driver has his own individual Settlement Sheet and the store business is handled in precisely the same manner. Bread returns from the wagons are charged at a reduced price to the store and only after a product becomes unsalable in the store is it actually discarded, and the

store then receives credit on the daily Settlement Sheet for this amount of “stale.” On bread left over in store at end of day the store Account, inasmuch as such bread is to be sold at a reduced price the next day, is to receive corresponding credit, and the Stale Bread Account charged accordingly. As the Stale Returns from wagons are charged to the store at part price and should be sold at that rate, the store becomes the clearing house for the leftover products. The store must make its own Settlement Sheet showing actual Cash Returns and Stale and the difference between the total of these two items and the “Total Charge” for the day should represent the sales value of stock goods on hand at end of day, which amount is carried on the records daily as stock on hand until the end of the week, at which time the actual stock on hand in the store, is taken by inventory and its corresponding value credited on Saturday’s Settlement Sheet, as Stock on Hand.

E. DAILY RECAPITULATION OF SETTLEMENTS WITH SALESMEN AND STORE

Next we have a “Daily Recapitulation of Settlements with Salesmen and Store.” This sheet should contain captions showing the total charge of sales made per route, the collections made in each case, the amount of credit sales,—goods returned, and total cash returned by the salesman. The totals appearing thereon as Cash Returns must correspond with the deposit made in the bank for that day’s business, except for Saturday’s receipts, out of which commissions are usually paid to the salesmen.

F.  ROUTE AND STORE SALES RECORD

The Route and Store Sales Record shows the weekly totals for each of the salesmen, also the weekly store business, accounts for the stale—credit and debit, giving actual loss on “Stales,” which must be entered on a report of “Cost of Manufacturing, Sales, Expenses and Profits.” It also shows the sales of bread, cake and pies, Authorized Credits, Salesmen’s Cash Returns, and Salesmen’s Commissions. By adding up the figures representing the business done on the different routes and the store business, we arrive at the totals for the week’s business.

A sheet of exactly the same dimensions and style can be used for recording the total weekly transactions of each driver and of the store for the purpose of comparing weekly net sales and “stales,” which record will show up fluctuations in trade—if any. A separate sheet should be used for each driver and also for the store.

G. WEEKLY REPORT OF SALES, EXPENSES AND PROFIT

This report lists the Material Cost, Manufacturing Expense, Selling and Delivery Expense, Office and Overhead Expense, the total cost, total sales and net profit—both in the Bread Department, the Cake Department and in both combined as finally summarized under the heading of “Final Recapitulation.”

The data for these entries is secured from the Stock Record. Cash Journals—Fixed charges (Depreciation, Taxes, Insurance), Route and Store Sales Record.

The Weekly Report of Sales, Expenses and Profits tells the baker just where he stands for the week and is a very important record.

VI. ACCOUNTING DEPARTMENT

A. CASH JOURNAL

The Cash Journal is divided into two sections, one for Cash Receipts and the deposit thereof in bank and the other for Disbursements. The caption “Salesmen’s Cash Sales,” shows the returns of salesmen’s cash sales, next “Outstanding Accounts Collected,” then “Stores Cash Sales,” then “Sundry Items,” such as may be received through the selling of sacks or barrels, and finally the “Total Receipts.” Following this is a space for “Description of Entires.” Then comes the caption “Bank Account,” showing in the first column the deposits, each of which as before stated, should be exactly the same as the total cash received for the corresponding day’s business, except Saturday’s receipts. Every cent received should be deposited in the bank except amount required for salesmen’s commissions. The next caption is for the numbers of the checks issued. Following this is the column for amounts withdrawn from bank. All payments, with the possible exception of salesmen’s commissions, should be made by check. If you need money in your Petty Cash, for which space is provided in this Cash Journal, or for which you may prefer to keep a Petty Cash Book, issue a check, cash the check and place the money in the Petty Cash and have the amount properly accounted for. Now for Disbursements :

First comes the caption “Office Expenses,” with subheadings for “Salaries,” “Insurance and Taxes” and “Sundries,” the latter for items paid out of Petty Cash. The items “Salaries” includes a weekly salary for the owner. The next caption is “Manufacturing Department” with subheading reading as follows:

Following this are spaces for dates of payments and for description of entries.

We then come to the Selling Department, which has a caption for “Salesmen’s Commission and Salaries.” The Commission items are based on the net sales as shown on Weekly Route and Store Sales Record. Barn Expenses must be entered under the caption provided therefor. Advertising in newspapers or any other advertising expense incurred to promote the business to be entered under caption “Advertising.” Under the caption “General Selling and Delivery Expense” enter expense in connection with the automobiles or wagons used for special deliveries.

As the Cash Journal is added up at the end of the week each total represents the total expense for the week for the caption under which it

appears. The totals are then copied on to the form entitled “Weekly Report of Sales, Expenses and Profits.” These two forms have been previously described.

B. FIXED CHARGES

We then procure from our ledger valuation, the “Fixed Expenses,” meaning a weekly charge based on a yearly two or three per cent depreciation on the value of the buildings, 10 per cent on Machinery and Ovens, 15 per cent on “Other Shop and Store Equipment,” 25 to 33 per cent on Auto, 10 per cent on Horse, Wagons and Harness and 10 per cent on Office Furniture and Fixtures. The yearly depreciation is first figured out in each case and then divided by 52 to give the proportionate weekly depreciation charge.

At the close of each fiscal period, an actual inventory of Real Estate and Personal Property should be taken. The difference between such inventories and the total amounts charged to the respective accounts should be charged to the respective Depreciation Reserve Accounts. If a proper percentage has been charged off periodically, the Reserve Accounts should about offset the actual depreciation as ascertained by taking aforesaid inventories.

C. CUSTOMER’S LEDGER

The authorized Credit Sales as shown by salesmen must be entered in the salesmen’s Route Book, which has been previously described, and a transcript thereof must be entered in the customer’s Ledger.

D. ANALYSIS OF WEEKLY EXPENSES

• Bread Department.
• Cake Department.

An excellent means whereby weekly expenses in both bread and cake departments may be analyzed is by a form entitled “Analysis of Weekly Expenses.”

This form should have columns carrying the following headings or captions which should be listed from left to right as follows:

A separate form is used for both bread and Cake Departments.

E. WEEKLY COMPARISON OF MANUFACTURING AND SELLING DEPARTMENTS AND OF RESULTS

• Bread Department.
• Cake Department.

An excellent way of making weekly comparisons of the Manufacturing and Selling Departments and of weekly profit is through the maintenance of a special form which has columns carrying the following headings or captions listed from left to right as follows:

Separate forms are used for both Bread and Cake Departments.

VII. CONCLUSION

In the use of the forms described in this section or other similar forms adaptable to the requirements of the individual bakery, it should be kept in mind that protection is afforded by adhering strictly to the following points:

1st. By checking Raw Material used by taking an inventory at regular intervals. It is best to do so weekly. This enables you to use your working capital to best advantage.

2nd. By calculating each formula.

3rd. By checking daily sales against daily production.

4th. By watching authorized credits closely and limiting credit accounts, lest bad accounts accumulate.

5th. By depositing in bank all money received, except amount required weekly for salesmen’s commission.

6th. By paying all bills by check.

7th. By charging cost of manufacture with a proper amount weekly for Fixed Charges in order to arrive at the net profit.

Section Three
THE CONTROL OF VISIBLE AND INVISIBLE LOSSES IN THE BAKERY

SECTION THREE:
THE CONTROL OF VISIBLE AND INVISIBLE LOSSES IN THE BAKERY

I. FOREWORD

A suitable system of records and accounts in a bakery not only shows the position of the business from a financial standpoint at all times,—but also points out the various factors which enter into production, selling and management costs. This enables the manager or owner to check up on these items and in this way to minimize controllable cost factors and to eliminate certain unnecessary losses which would go unrecognized without the accounting system.

The principal factors which should be investigated and controlled are discussed in the following paragraphs.

II. STOCK MATERIAL

A. RESPONSIBILITY OF STOCK CLERK

All ingredients and materials used in the bakery should be placed in charge of one man who is held accountable for the same at all times. It should be his duty to check in and check out all material received and to keep an accurate record thereof. The other employees should not be permitted to secure any such material except through the stock-clerk.

B. RECEIPT OF MATERIAL

When starting the system of controlling materials, an inventory of stock on hand should be taken. Thereafter, all materials purchased should be carefully weighed at the time of their receipt in order to ascertain any possible shortage and to make sure that the amount of each material billed and paid for, actually represents the amount received. It is also advisable to run moisture and absorption tests on the flour if practically possible to do so. All incoming material should be properly entered on the stock records as explained in Section two of this chapter.

C. DISBURSEMENT OF MATERIAL

All stock used in the bakery should be issued by the stock clerk only on written requisition which is signed by the department receiving the same. All such orders for stock should be properly dated and indicate the dough in which it is to be used or the purpose to which it is to be put.

D. INVENTORY OF MATERIAL

1. Perpetual Inventory

By keeping a continuous accurate record of all materials received and dispersed in the stock ledger the stock clerk will have a perpetual inventory record of material on hand at all times.

2. Physical Inventory

An actual physical inventory of all material on hand including the flour in the bins should be carefully taken weekly or monthly. This should agree with the perpetual inventory record at the time the physical inventory is taken. If there is any difference between the two, it indicates a loss or leakage which should be checked up as described in the following paragraphs.

E. INVESTIGATION OF LOSSES IN MATERIAL

1. Normal Shrinkage

If the physical inventory of the flour shows that the amount actually on hand is slightly less than indicated by the perpetual inventory records, —this difference may possibly be due to a loss of moisture by evaporation during storage. However, before drawing this conclusion it is necessary to verify the same by actual moisture and absorption tests, and by weighing the flour before sifting. If such tests bear out this conclusion, it merely means that this loss may be compensated for by the use of corresponding additional amount of water in the dough batch. If this is done, there will be no ultimate loss to the baker.

2. Unaccountable Shortage

If the shortage noted in flour or other ingredients can not be accounted for as a normal shrinkage as shown above, then it must be investigated from the following angles:—

• (a) ERRORS IN AMOUNTS RECEIVED, DISPERSED AND RECORDED
• (b) WASTAGE OR MISAPPROPRIATION
• (c) EXCESSIVE STORAGE LOSS DUE TO WRONG CONDITIONS OF STORAGE.

In the event that any loss in material can be attributed to actual spoilage during storage, this loss should be recorded on the stock records. While in this case there will be no discrepancy between the stock records and the physical inventory, it is highly important that the cause of such spoilage and loss be recognized and corrected.

F. CLASSIFICATION OF STOCK MATERIAL

In considering the materials used in production of bakery products it is often convenient to classify them in three divisions:—

1. The Ingredients Actually Entering the Dough Batch at the Time of Mixing.
2. Stock Materials in the Making of Bakery Products, but not Incorporated in the Dough When Mixed,—Such as Pan and Trough Grease and Dusting Flour.
3. Wrapping and Packing Supplies.

G. IMPORTANCE OF CHECKING UP ON ALL MATERIALS USED

Most bakers realize that in order to secure utmost efficiency in production, it is absolutely necessary to maintain a close check on all the

material entering the dough mixer and to compare this amount of material with the actual yield of baked goods secured. Furthermore, it is generally recognized that the cost of all wrapping and packing material used constitutes a part of the cost of baked goods and is figured in the net cost accordingly. This also warrants careful observance of the amount of such material used in connection with every batch of goods produced.

However, in some bakeries which are otherwise efficiently managed, insufficient attention is paid to the quantity of trough and pan grease and dusting flour consumed.

Hence this particular subject warrants special consideration at this time.

H. INVESTIGATION OF AMOUNT OF PAN AND TROUGH GREASE AND DUSTING FLOUR

1. Established Amount Necessary

The superintendent of a bakery should be able to determine by observation the minimum amount of pan and trough grease, and dusting flour necessary in the production of a given amount of bakery products. This is frequently expressed as the amount of such material required per 100 lbs. of dough. Then by a careful inspection of the dough reports the stock records, he can ascertain whether the amount actually used has been greater than necessary. If an excess of such materials has been consumed then the necessary steps should be taken to correct the situation. Not only is it advisable to use the minimum amount of trough and pan grease and dusting flour from the standpoint of economy but also because excessive use of these materials will injure the quality of baked goods secured, often causing streaks in the finished loaf.

III. PRODUCTION STANDARDS AND NORMAL YIELD EXPLAINED

By careful observation and investigation of his various doughs and the conditions under which they are handled, a baker should know in each case just what yield (or the number of loaves of a certain weight produced per barrel of flour used) that he is entitled to expect. Now if the stock records are maintained accurately, but the yield of salable baked goods produced from the raw materials used, is below standard, the baker should recognize this fact by daily inspection of the dough reports, cost production cards and other records, and investigate the underlying causes of this condition.

IV. INVESTIGATION OF YIELD BELOW NORMAL

A. WEIGHT OF DOUGHS WHEN MIXED

Inasmuch as each individual dough should be mixed according to a definite formula the weight of the dough out of the mixer should agree closely with the total weight of the ingredients in the formula provided that all of these ingredients are carefully weighed out. In order to weigh the

dough directly after it is mixed, a floor scale may be used. The trough in which the dough is to be placed is first weighed empty. The trough containing the dough is then weighed and the difference between these two weights represents the weight of the dough itself.

B. CAUSES FOR SHORTAGE IN WEIGHT OF DOUGHS WHEN MIXED

If the net weight of the dough itself directly after mixing does not agree closely with the formula weight as recorded on the dough report the following points should be checked in order to determine the reason for the loss.

1. Careless Removal op Dough From Mixer

While of course there may be tiny particles of dough retained in the mixer, this amount should not be appreciable provided the mixer is properly cleaned and scraped when removing the dough into the trough.

2. Errors in Weighing, Recording or Absorption

When the weight of the dough out of the mixer shows an appreciable difference in weight from that shown on the dough report, it is very likely that there has been a mistake in weighing the ingredients or in recording these weights on the dough report. Sometimes a shortage in the weight of the dough directly after it is mixed may be traced to the use of less water than specified in the formula or recorded on the dough report. Such cases should be investigated. If it is found that the full amount of water specified on the formula can not be used without undue slackening of the dough,—then the formula should be corrected accordingly. If, however, the man in charge of the mixing is actually using less water than the dough will successfully carry, then of course this condition should be corrected and the proper amount of water employed. This matter of absorption should be watched very carefully.

3. Improper Care of Scales and Weights

In connection with the weighing of all ingredients prior to mixing, special attention should be given to the water scale, the flour scale and the ingredient scale. It is highly important that these scales be kept clean, properly balanced and in first rate working order. Otherwise another source of invisible loss will be encountered and the yield of bread influenced accordingly. All of the metal weights used in connection with these scales should be kept scrupulously clean. If any foreign matter is allowed to accumulate on these weights, the actual amount of material being weighed out will not be correct.

B. LOSS IN WEIGHT OF DOUGH IN TROUGH

1. General Explanation

This refers to the actual loss in weight of the dough during the fermentation period,—or in other words from the time the dough is removed from the mixing machine and placed in the trough up to the time it is

ready to go to the bench or divider. This loss can be determined by weighing the trough containing the dough directly after mixing and also just before it goes to the divider. The difference in these two weights represents the loss in question. Such a loss is due to the true fermentation losses together with the evaporation of moisture from the dough during the fermentation period. These two losses are discussed in the following” paragraphs and should be shown as a total dough loss during the fermentation period on all dough reports.

2. True Fermentation Loss

The carbon dioxide gas which raises the dough is produced together with some alcohol by the action of yeast on the sugar in the dough. Naturally when a dough is punched this carbon dioxide gas and alcohol vapor is driven off into the atmosphere. This actually represents a corresponding loss in the weight of the sugary content of the dough. A certain slight fermentation loss of this nature of course is practically unavoidable in order that the dough may be properly risen and conditioned.

This loss, however, normally should not exceed one-half of one percent (0.5%) of the weight of the dough if modern methods of bread-making are adhered to. This loss is naturally higher in long time doughs and doughs which are punched or folded a number of times than in short time doughs which are folded over only once.

3. Evaporation Losses During the Fermentation Period

The evaporation of moisture from the dough during the fermentation period in many cases is greater than the true fermentation loss. However, if the temperature and humidity of the dough room are adequately controlled as described in Chapter XII, this evaporation loss should be practically eliminated. The factors which are most influential in reducing evaporation losses to a minimum are:—

• (a) Proper control of temperature and humidity in the dough room.
• (b) Short time—cool doughs.
• (c) Reduction in the number of times a dough is punched or folded over.

D. LOSSES DURING DIVIDING, SCALING AND MOULDING PROCESSES

1. Establishment of Scaling Weight

The scaling weight of each piece of dough when divided by machine or on the bench should be regulated so that each individual piece of goods when baked will have the desired weight.

This of course should be a pre-determined factor and the dough divider should be so adjusted that each individual piece of dough will have the desired weight. In most instances this weight of each piece of dough when delivered from the divider should be about 10% heavier than that desired for the final baked product. The weight of the pieces of dough out of the divider should be checked by the scales.

2. Calculation of the Number of Individual Dough Loaves to be Secured From a Given Dough Batch

The exact number of pieces of dough which should be obtained from any particular batch of dough can be calculated as follows:—

Divide the total weight of the dough batch expressed in ounces at the time it is sent to the divider by the scaling weight of each individual piece of dough as delivered from the divider. The resulting figure will be the number of individual dough loaves which should be expected.

Example:—

Suppose the weight of the dough batch when sent to the divider is 333 lbs. and the scaling weight desired is 18 ounces. How many dough loaves should be secured

333 lbs. x 16 = 5328 ounces

5328 ÷ 18 = 296 Dough Loaves should be Secured.

In other words the number of dough loaves actually secured when multiplied by the scaling weight should give the total weight of the dough batch sent to the divider.

Example:—

If 296 loaves are secured and the scaling weight was 18 ozs. what should be the weight of the total dough batch? 296 x 18 = 5328 ounces or 333 pounds.

3. Shortage in Number of Dough Loaves Delivered From Divider

If the actual number of pieces of dough secured from any given batch of dough is below what it should be when calculated as described above the following possible causes should be investigated.

(a) DOUGH LEFT IN TROUGH, CHUTE OR DIVIDER

Of course, if the proper care is exercised in handling the dough, the amount of dough left in the trough, chute or dividing machine should be negligible,—but carelessness may result in some loss in this way.

(b) DOUGH CRIPPLES IN DIVIDING AND SCALING

If necessary precautions are not taken certain pieces of dough in passing through the dividing machine may be ruined by coming in contact with machine oil, grease or dirt,—or by dropping on to the floor at the time of scaling. Such dough cripples represent a distinct loss which should be avoided.

(c) ERRORS IN SCALING

If the number of dough loaves secured in any case is below normal and if this shortage can not be accounted for through the two causes stated above, then it is very likely that the loss observed can be traced to over-scaling or in other words to the use of a higher scaling weight than specified. Such a condition means a corresponding loss in returns and should be corrected at once.

On the other hand, if the reverse is true and the scaling weight is below standard there will be an apparent gain in the number of dough units secured. However, such a condition is in no sense an advantage,—the apparent gain therefrom may represent a big loss in trade or get the baker in trouble from the standpoint of weight and labelling laws.

4. Cripples Produced During Moulding and Panning

Dough loaves are sometimes crippled in the proof box if the humidity moulding machine or during panning in a similar way to those produced during dividing and scaling if due caution is not exercised.

5. Cripples Produced During Pan Proofing and Oven Loading

Dough loaves are sometimes crippled in the proof box if the humidity is excessive, resulting in the condensation of water, which drops on the top of the dough causing unsightly spots.

Furthermore, unless care is used in transferring the dough loaves into the oven, some of them may be “knocked down” and thus crippled.

6. Cripples During Baking

Loaves are often crippled during baking by being burned in the oven, or by “wild” irregular bursts in the oven which result in deformed, un-symmetrical loaves which are unsalable except for animal feed. Oven cripples can be largely avoided by proper regulation of the oven temperature and steam and also by maintaining the proper conditions during pan proofing.

7. Wrapping and Packing Cripples

Loaves which are damaged in the wrapping machine or crushed during packing should be recorded as such and the proper steps taken to prevent the continuance of such cripples.

V. LOSSES FROM OVER-PRODUCTION AND SALESMEN’S RETURNS

If more baked goods are made than are called for on the salesmen’s orders,—and such goods are not sold, they are classified as “plant stales.” Such over-production represents a distinct loss, and when noted the necessary steps should be taken to prevent it happening again.

Of course, the extra goods baked can be sent out with the salesmen in the hope of disposing of the same but if they are not sold, the production department and not the salesmen is accountable.

However, if all the goods which are actually specified on the salesmen’s ciders are not sold by them, the goods which are returned are called salesmen’s returns. Such an occurrence of course, represents a loss to the establishment unless these goods can be sold over the counter.

VI. VISIBLE AND INVISIBLE LOSSES DISCUSSED

In the preceding paragraphs the various losses occurring in general bakery practice have been discussed.  These losses may be conveniently

divided into two classes:— (1) invisible losses and (2) visible losses. Invisible losses are those which are hidden and not obvious without investigation,—such as fermentation and evaporation losses from the dough, discrepancies in dough and formula weights, etc. Such losses only become visible on careful investigation. If, however, it is the custom to weigh doughs after mixing and before sending the same to the bench, some of these invisible losses become visible. Visible losses are those which are quite apparent as they occur such as shop, oven and wrapping and packing cripples as well as plant stales.

By actually keeping a record of visible losses, they may readily be accounted for.

It is usually advisable to bake all dough cripples and, while they do not represent regular salable goods, they can be sold along with oven cripples and plant stales as chicken feed or for some similar purpose and credit allowed accordingly,—thus reducing the net loss to the producer.

Of course, perfection is practically unattainable. No bakery is absolutely 100 $> efficient, and some losses such as those described in the foregoing paragraphs are bound to occur even in the best regulated shops. The important thing is to discover all losses when they occur, ascertain the cause and then take necessary steps to reduce such losses to a minimum.

The maintenance of accurate records throughout the entire bakery is of course, the only way in which the visible and invisible losses may be actually recognized and the controllable factors responsible for these losses corrected. It is only by such “checking” that real efficiency can be attained. This is clearly one of the greatest benefits derived from the keeping systematic records and accounts.

VII. MISCELLANEOUS EFFICIENCY FACTORS IN PRODUCTION

A. FUEL, POWER AND LIGHT

These three items of expense usually play an important part in the general cost of production. Care should be taken to see that the oven is fired with no unnecessary waste of fuel. All machines should be kept in good condition and well lubricated and only operated when in actual use. The power transmission system should be laid out so that only as little as possible will be lost in transmission. The lighting system of the bakery should be so arranged that it will give the most efficient results and no lights should be operated when not required. These little points, while perfectly obvious are often neglected and in a year’s time may represent a considerable sum of money spent for no good purpose and with no return—merely waste.

B. THE “HUMAN EQUATION” IN PRODUCTION

In discussing the ways and means of eliminating loss and thereby increasing efficiency in bakery operation, there is sometimes a tendency to forget the fact that the success of any business depends more on the men

operating it than it does on machinery, materials, formulas and methods. An appreciable portion of all production expense is due to the actual cost of labor, and naturally the owner of any business is anxious to keep this item of expense as low as possible, relative to the amount of goods produced.

However, in most instances it is sheer folly to attempt to accomplish this aim by paying as low salaries as possible or by the “driving” method. Quite frequently such a policy actually results in an increase in the net labor costs rather than decreasing the same. All men are human and in order for them to accomplish real worthwhile results for their employer, they must be kept happy in their work, and really interested in the welfare of the business as a whole.

Some significant factors entering into the securing of the greatest “production per man per hour” are as follows:—

1. Careful selection of employees.
2. Maintenance of good working conditions.
3. Fair wages.
4. Personal interest of employer in the welfare of his employees, and the building up of “company spirit.”
5. Proper recognition of special effort and accomplishment of individual employees.  Personal commendation, bonuses, and advancement when warranted are means of doing this.
6. Efficient, systematic layout of individual work schedules for each employee, avoiding all lost motion and unnecessary duplication of work.
7. A constant study of the work done by each department and each individual relative to the amount of goods produced, thus leading to a more efficient arrangement of schedules and minimizing labor losses wherever possible.