Are you putting in enough time, energy and effort into managing your inventory? Do you have a dedicated, disciplined process that tells you what to buy, when to buy & how much to buy? Well, here are a few useful tips and must-haves that can help optimize your restaurant’s overall business.
The allocation of resources and its management is a common issue for all organizations. Inventory management aims to hold resources at the lowest possible cost while ensuring uninterrupted supplies for ongoing operations. Kitchens tend to get extremely chaotic when your restaurant is crowded and tables are filling fast. Multiple things are at play when a restaurant is operating during peak-hours at its optimum capacity and inventory management is central to this.
Market researchers and analysts have repeatedly noted that the F&B industry is highly prone to ups and downs owing to the intense competition and changing trends. So in this uncertain market, it feels great to have a sound overview and control over your inventory.
Traditional Challenges with Managing Inventory
The Indian market has been undergoing digitization since the past decade or so, and all the big food-processing industries, as well as QSRs, have been digitally managing their inventory data using sophisticated software and tools. However, in the food-service sector, the majority of small and medium-scale restaurants physically log their inventory data and weigh their raw materials daily.
Market studies show that a majority of employees see the task of calculating opening stock, purchase, orders and closing stock to be the most boring part of their routine. More importantly, inventory is something that all restaurants have to keep track of on a daily basis, you can’t escape it! This compulsion added with the tedious task of measuring and manually filling the ledger.
Most of the restaurants in India share their daily stock report on either Whatsapp or via email. This means they have to fill an excel sheet every single day. It is usually a 40-60 minute task, each day before the shutters go down.
Manual tasks of weighing and monitoring might also result in miscommunication or lapse of data. So there is a dire need to change these old and ineffective ways of managing your inventory. Integrating the inventory data onto a digital platform like your phone or tablet is the best way to manage your inventory. This saves up a lot of time and also reduces your staff’s effort.
Ways to Overcome These Challenges
Categorise your Inventory
Categorizing your inventory into priority groups can help you understand which you need to order more frequently, and which are important to your business but maybe costly and slow-moving. As a general rule, 80 percent of your profits come from 20 percent of your stock.
Experts typically suggest segregating your inventory into A, B and C groups. Items in the A group are higher-ticket items that are required in fewer quantities. Items in the C category are lower-cost items whose inventory turns over quickly. The B group is those items that are moderately priced and churn out at a slower rate than C items but quicker than A items.
Track Food Costs & Product Information
Food costs tend to fluctuate owing to factors like seasonality, excessive demand, low supply or scarcity. So tracking these items and recording their conversion and yield is a crucial part of Inventory Management.
Make sure that you report all of the product information for your items in the inventory. Information should include SKUs (Stock Keeping Unit), bar-code data, suppliers data, countries of origin and so on. Along with this weighing, your raw-materials and resources are also very crucial. As I mentioned earlier, the majority of restaurants still monitor and report their inventory manually. A weighing-scale integrated with your inventory management software can greatly reduce your time and energy.
Audit your Inventory
The allocation of resources and its management is a common issue for all organizations. In the F&B industry that cycle of managing inventory is daily. What separates food from other commodities is its shelf-life. Among other items of the inventory, any restaurant’s primary concern is the optimal use of its edible resources.
Depending on the type and quality of the inventory-goods and their shelf-life you must conduct a weekly or monthly audit for your inventory to ensure fair deployment of your resources and materials. It is extremely important to track the variance that occurs in inventory sales as well. A regular audit will give you a clearer view of your future trajectory.
Analyze your Supplier Performance
Restaurant operations rely heavily on suppliers’ performance. A non-reliable supplier can cause problems for your inventory. If you have a supplier that is habitually late with deliveries or frequently misses out items on your order-list, it’s time to look for a better supplier! Finding suppliers can also be a challenge so if it may help, you should keep looking for better vendors at all times just to be aware of the market.
Comparative-analysis has proven to be very helpful for small and big outlets, alike. Track no of items on paper vs the items delivered, if the supplier generally underdelivers. Having said that, have a good rapport with your suppliers, talk to them about the issues if any and keep that communication very clear.
The more clarity you have about your inventory the more likely you are to save your restaurant from a downhill trajectory. and find out what the problem is. Be prepared to switch partners, or deal with uncertain stock levels and the possibility of running out of inventory as a result.
Manage your food-waste
Food wastage is basically a wastage of your inventory. So understanding the actual value of discarded food is very important to manage wastage and thereby control your inventory. Ensure proper cold storage for your raw-materials; especially meat and dairy products. Design your kitchen in a way that is efficient in moving reloading stock.
To avoid spillages while moving the inventory, you could also use a flooring material that has a good grip and is not too slippery. Storage and chilling units must be checked and maintained regularly. Many raw materials like break get spoiled in moisture, so storage units for dry inventory must be kept moisture-free.
Sometimes, food-waste is inevitable and that issue also needs to be addressed. Discarded foods can be given away for manure development instead of dumping it as waste. So even if there is food-wastage in your kitchen, you could give it away to be utilized in some other form.
Invest in Inventory Management Technology
All of the above-mentioned tips could complement your growth only if you track your inventory using a software or a Restaurant Management Platform. If you’re a small or medium-scale restaurant, managing your inventory list manually, with spreadsheets and notebooks, is doable. But as your business grows, you’ll spend more time on inventory than you do on your business, or risk your stock getting out of control.
Inventory management software isn’t the only technology that can help you manage stock. A PoS system with in-built inventory management is perhaps the best way to compare your inventory data, allowing you to compare it against the recipes you serve.
Having a POS System that isn’t connected to your inventory management software isn’t the end of the world, but it might cost you extra time to transfer the data from one system to another and your staff might end up with inaccurate inventory counts. So, when you are investing in technology make sure to prioritize and integrate co-dependent systems.