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. However, there’s no escape to it. Restaurant Inventory is something that all restaurants have to keep a track of on a daily basis.
Most restaurants in India share their daily stock report on either Whatsapp or via email. This means they have to fill out an excel sheet every single day. It is usually a 40-60 minute task, each day before the shutters go down.
The allocation of resources and their management is a common issue for all organizations and restaurant inventory management aims to hold resources at the lowest possible cost while ensuring uninterrupted supplies for ongoing operations.
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.
Let’s See How You Can Smarty Manage Your Restaurant Inventory To Increase Profits
Manual tasks of weighing and monitoring raw materials might also result in miscommunication or lapse of data. Therefore, there is a dire need to change these old and ineffective ways in order to manage your inventory in the best way possible.
Integrating inventory data onto a digital platform using a software or tool can go a long way. It doesn’t just save a lot of time and reduces your staff’s effort but it also gives you important insights about your restaurant’s inventory consumption and patterns that can help you make smart and profitable decisions for your business.
1. Categorise Your Inventory
80 per cent of your profits come from 20 per cent 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.
- Items in the B group are those items that are moderately priced and churn out at a slower rate than C items but quicker than A items
Categorizing your inventory into priority groups can help you understand your inventory consumption patterns and help you order on time.
2. 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 Restaurant 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. A weighing scale integrated with your restaurant inventory management software can greatly reduce your time and energy instead of doing it manually.
3. Audit Your Inventory
The allocation of resources and their management is a common issue for all organizations. Any restaurant’s primary concern is the optimal use of its edible resources. In the F&B industry that cycle of managing inventory is daily. What separates food from other commodities is its shelf-life.
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.
4. Manage Your Food-waste
Lower COGS (cost of goods sold) = Greater Net Profit
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
- Avoid spillages of inventory by using 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 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 them as waste. So even if there is food wastage in your kitchen, you could give it away to be utilized in some other form.
5. Analyze Your Supplier’s Performance
Restaurant food suppliers are a huge part of the supply chain as they sell their goods to the restaurants. A non-reliable supplier can cause problems for your inventory.
A restaurant food supplier’s primary purpose is to give restaurant owners lower buying prices so they may boost their profit margins. The factors that will determine which restaurant food supplier to use include price, delivery speed, minimum order requirements, and product quality.
To keep a constant flow of supplies moving to their restaurants, the majority of restaurant operators depend on multiple vendors. The supplier you select will also depend on your menu, sales volume, size of the facility and storage capabilities.
The more clarity you have about your inventory the more likely you are to save your restaurant from high COGS. Make sure you choose your suppliers smartly and negotiate terms that works for both parties involved.
If you have a supplier that is habitually late with deliveries or frequently misses out on items on your order list, it’s time to look for a better supplier!
6. Invest In Restaurant Inventory Management Technology
All of the above-mentioned tips could complement your growth only if you track your inventory, analyze the patterns and make decisions accordingly.
Investing in a restaurant inventory management tool can go a long way but you know what’s much more beneficial? Investing in the right Restaurant POS system.
A smart POS system has a lot of benefits including data forecasting, order planning reports, integrated accounting, automatic inventory tracking based on customer orders, recipe management, menu management etc.
It will help you in buying the correct amount of inventory that doesn’t increase your storage cost & is also enough to have a smooth restaurant operation. Moreover, it will also help you in lowering your COGS (cost of goods sold) which will eventually benefit your restaurant profits.
Here’s a good read:
Hope this blog helps you in understanding & formulating restaurant inventory management for your business!
If you are looking for effective POS and inventory solutions for your restaurant then feel free to take a Demo!