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February 18, 2023

Restaurant Inventory Management, A Simple Guide


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POS Used

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Running a restaurant is hard enough - but managing inventory can be downright daunting. With so many ingredients, menu items, and modifiers, it's easy to lose track of what you have on hand and what you need to order. This can lead to shortages (and angry customers), overstocking (which leads to waste and spoilage), or even worse, running out of essential ingredients in the middle of a busy shift. In this post, we will comprehensively describe restaurant inventory management, outline and explain the most important elements and considerations, and discuss how the right technology can help you manage your inventory and keep food cost under control.

What is Restaurant Inventory Management?

In the restaurant industry, inventory management refers to the processes and tools used to keep track of food, ingredients, supplies, and other items that are necessary for running a successful kitchen. Managing inventory is an essential part of ensuring profitability in restaurants, as it allows you to make informed decisions about how much you need to order and when you need to order it. Some of the key elements and considerations involved in restaurant inventory management include tracking current stock levels, forecasting future needs, managing orders, and maintaining accurate records.

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Current Stock Levels

The first step in effective inventory management is to keep track of your current stock levels. This involves counting both raw materials (ingredients) and prepared recipes at regular intervals. Establishing a counting cadence is important - many restaurants count their entire inventory once a week and count high priced items like meat daily. While keeping an accurate physical count can be time-consuming, it is a critical piece for calculating your food cost and knowing when it's time to re-order. Inventory management software can reduce the amount of time it takes to count and input inventory. When counting inventory it is important to know the unit you are counting in. For example, are you counting jumbo onions by the pound or by the 50 pound bag. The difference could significantly throw off your food cost and ordering schedule.

Forecasting Future Needs

In addition to tracking your current stock levels, it's also important to forecast your future needs based on past sales data and customer demand. This allows you to order the right amount of ingredients and supplies at the right time, which can help to prevent shortages or overstocking. The ability to forecast every ingredient in your restaurant would be nearly impossible without software, but sophisticated food and beverage management systems can build accurate forecasts based on your historical sales and product usage using data from your POS and kitchen.

Managing Orders

Another important part of inventory management is properly managing your orders from vendors and suppliers. This involves ensuring that you have the necessary funds to cover your orders, coordinating deliveries, and making sure that you receive all of the items on time. Ordering the right amount of product depends on having good forecasts while also taking into account special events such as catering.

Maintaining Accurate Records

Finally, accurate inventory records are essential for maintaining effective restaurant inventory management. These records should include information about what ingredients and items you currently have in stock, as well as what you need to order going forward. Accurate inventory records are required to properly calculate your food cost and waste, which help you understand your restaurant's profitability.

How Technology Can Help

There are several types of software that can help you better manage your inventory and restaurant. These include:

  • Point of Sales System - essential for collecting data on which menu items are sold
  • Inventory Management/Food & Beverage Management System - allows you to build recipes, link those recipes to menu items being sold, forecasts future usage, and usually includes prep sheets and order guides
  • Kitchen Display System - replaces paper tickets and helps your kitchen minimize order errors and wasted food
  • Tasks Management System - helps employees stay on track by providing a detailed list of assignments, including completion instructions

Whether you are just getting started or looking for ways to improve your current system, there are many resources available that can help guide you through the process. By focusing on these key elements, utilizing the right tools and best practices, you can keep your kitchen stocked, running smoothly, and delight your customers.

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