If you’re in the restaurant business, you know that restaurant inventory management is crucial to keeping your business running smoothly. Having good restaurant inventory management helps you keep track of your inventory, so you can make sure you’re always stocked up on the items you need.
Restaurant Inventory Management Definition
Restaurant inventory management is the process of tracking and managing the food and beverage supplies within a commercial kitchen. This includes keeping track of what ingredients are on hand, ordering new supplies as needed, and monitoring usage to ensure that nothing goes to waste.
How Do Restaurants Manage Inventory?
Restaurants must maintain a careful inventory balance to keep their business running smoothly. They’ll be stuck with excess costs and wasted products if they order too much. Order too little, and they’ll risk disappointing customers and losing out on potential sales.
There are a few different methods of how restaurants manage their inventory. Let’s take a look at some of them:
1. POS System Integration and Manual Inventory
You can use a point-of-sale (POS) system to take stock inventory, but it’s also essential to regularly do physical counts of inventory by hand. This will help you catch any discrepancies in your records and ensure that your list is accurate.
Restaurant POS integration is a process where a restaurant’s POS system is linked to its inventory management system. This allows the two systems to share information and keep track of inventory levels in real-time.
This is a very effective way to manage inventory, as it eliminates the need for manual data entry and allows for more accurate tracking of inventory levels. Taking inventory by hand is a more traditional method of inventory management.
This involves physically counting the inventory on hand and then recording the quantities in an inventory management system. This method is less accurate than POS system integration but can be more cost-effective for a smaller restaurant chain.
2. Assign the Same Staff to Do Inventory
Assigning the same staff members to do inventory each time establishes a consistent process, ensures accuracy, and reduces errors.
You should train your staff on how to take inventory properly and then have them follow a set schedule. This keeps things organized and ensures everyone is on the same page.
3. Track Inventory On a Consistent Schedule
Regular inventory tracking is essential to ensure smooth operations in any business. To do this, schedule a time to take inventory and stick with that schedule as much as possible. Regularly checking your inventory will help you know when to reorder and which items are in demand. This saves you money in the long run by helping you avoid buying items that aren’t popular or needlessly stocking items that are oversupplied.
4. Use a Food Waste Sheet
A food waste sheet helps identify how much food is wasted and what items are often wasted. Track this information over time to determine trends and make adjustments accordingly. This will help you save money and decrease your environmental impact.
5. Utilize Surplus Ingredients to Minimize Food Waste
If you have surplus ingredients, don’t let them go to waste! Utilize them in other dishes, find creative ways to use them, or offer them at a discount. This minimizes food waste and saves you money in the long run.
6. Follow the First In, First Out (FIFO) Method
When stocking shelves or coolers, follow the first in, first out method. This ensures that older items are used before they expire and reduces food waste risk.
The FIFO method is a great way to ensure that your food is fresh and doesn’t go to waste. This method states that the first food items that come in should be used first. This ensures that your food rotates properly and that nothing sits on the shelves for too long.
7. Use Your Inventory Data to Guide Future Buying Decisions
Two techniques are involved in analyzing sales data to guide future purchasing decisions.
- Demand planning uses sales data to forecast future demand and decide how much of each item you need to stock.
- Inventory forecasting looks at historical patterns in sales data and anticipates changes in customer behavior.
Both tools help plan for seasonal spikes in demand or changes in customer behavior.
Benefits of Restaurant Inventory Management
When it comes to restaurant inventory management, there are many benefits that can be achieved. Here are 9 of them:
1. Less Food Waste
Restaurant inventory management helps reduce food waste in several ways. First, you can adjust your ordering accordingly by keeping track of stock levels and understanding what is selling well and what isn’t. This means you are less likely to over-order perishable items that may go to waste. Second, by clearly understanding your expiration dates and implementing FIFO procedures, you can ensure that older items are used before they reach their expiry date. This again reduces the risk of food waste.
2. Lower Cost of Goods
Another benefit of effective restaurant inventory management is that it helps lower your overall cost of goods. This is because, as mentioned above, you are less likely to over-order perishable items that may go to waste such as meat, dairy, or produce.
In addition, you can adjust your pricing accordingly by keeping track of your stock levels and understanding what is selling well and what isn’t. This means you can charge more for high-demand items and sell at discount items that are not moving as quickly.
3. Better Vendor Management
Effective restaurant inventory management also leads to better supplier relationship management. This is because you will clearly understand your stock levels and what you need to order from each vendor.
You can use this information to negotiate better terms with your vendors, such as discounts for bulk orders or early payment. In addition, by keeping track of your inventory levels, you can avoid running out of stock of certain items, which can lead to disruptions in service.
4. Automatic Inventory Supply
Another benefit of restaurant inventory management is that it can help to automate your inventory supply. This is because you can set up automatic reordering for items running low by keeping track of your stock levels.
This means that you don’t need to place orders manually with your vendors whenever you restock an item. This saves time and hassle and reduces the risk of human error.
5. Improve Customer Satisfaction
By keeping track of your inventory, you can ensure that you always have the ingredients necessary to make your customers’ favorite dishes. This leads to happier customers and increased repeat business.
With real-time data on what inventory you have on hand, you can avoid running out of popular items and disappointing your customers.
6. Increased Profits
Restaurant inventory management helps you avoid costly waste and shrinkage. By ensuring that you have the right mix of inventory on hand at all times, you can avoid overstocking items that may go bad before they are sold. This helps improve your bottom line.
Additionally, by having a better handle on inventory, restaurants can take advantage of bulk discounts and seasonal sales to save money.
7. Significant Cost Savings
An effective restaurant inventory management system saves money by reducing food and beverage costs. In addition, it helps you optimize your menu pricing and reduce the labor cost associated with manual inventory management tasks.
8. Get Real-time Data to Make Informed Decisions
A good restaurant inventory management system will provide you with real-time data on your stock levels. This data helps you predict trends, optimize the menu, and make other strategic decisions.
By tracking your inventory levels in real-time, you can always know exactly what needs to be ordered and when. This helps reduce waste and ensure you are stocked with your customers’ desired items.
9. Stay Organized and In Control
An effective restaurant inventory management system will help you keep track of your inventory to stay organized and in control of your business. This leads to a more efficient operation and less stress for you and your kitchen staff.
When everything is tracked properly, it’s easier to find what you need when you need it and avoid duplication. This saves you time and hassle in the long run, which is essential for any busy business owner.
Frequently Asked Questions About Restaurant Inventory Management
What Inventory Method Do Restaurants Use?
Different restaurants use different inventory methods, depending on their needs and preferences. There are three main methods of inventory management that restaurants use, including:
- First-in, first-out (FIFO)
- Last-in, first-out (LIFO)
- Weighted average cost (WAC)
What are the 3 Major Inventory Management Techniques?
Inventory management is a critical component of any business, and various techniques are used to stay on top of inventory levels. Here are the three major inventory management techniques:
- The Push Strategy for Inventory Management: The push strategy is based on the idea of “pushing” inventory through the supply chain to meet customer demand. This approach relies on forecasting future demand and then manufacturing or purchasing products in advance so that they are available when customers want them.
- The Pull Strategy for Inventory Management: The pull strategy is the opposite of the push strategy. Rather than predicting customer demand, the focus is on responding to actual customer orders as they come in. This approach minimizes inventory levels by only producing or purchasing products once an order has been placed.
- The Just-in-Time Strategy (JIT) for Inventory Management: The just-in-time strategy is a pull strategy that takes things one step further by only producing or purchasing products when needed and in the quantities required. This approach eliminates waste and results in significant cost savings.
Who Is Responsible for Restaurant Inventory?
A few different people are responsible for restaurant inventory, depending on the size and structure of the restaurant. The owner or manager oversees the entire operation and may delegate some responsibilities to other staff members.
The head chef is usually responsible for ordering food and managing inventory in the kitchen. At the same time, the front of house (FOH) staff may be responsible for keeping track of supplies in the dining room. Ultimately, it is up to the owner or manager to ensure that all inventory is properly managed and accounted for.
If you’re managing a restaurant, you know how important it is to keep track of your inventory. With BlueCart, you can do just that. Our platform makes it easy to see what you have on hand, budget for future orders, and track incoming shipments. This way, you can be sure that you always have the ingredients you need on hand and avoid any costly surprises.
For suppliers, BlueCart also provides a convenient way to manage deliveries and process orders. This way, you can be sure that your customers are always getting the supplies they need on time.
Revolution Ordering is an off-premise, omni-channel, direct delivery-enabled ordering platform for individual, franchise, middle market and large multi-unit restaurant enterprises. Take advantage of cutting edge features including 360° order history, live order monitoring, and marketplace order insertion. Contact us for a demo now to see how our off-premise solutions can help grow revenue and earnings of restaurants. Note that Revolution demos are a walkthrough of our software, not a source of business advice.