5 Proven Inventory Management Best Practices for Small Restaurant Businesses
What is Inventory Management?
One of the pillars on which a restaurant business survives is inventory. A restaurant's inventory includes all its stocks, from raw ingredients to non-food goods such as tissue papers, cutlery, napkins, etc. A restaurant inventory is made up of the thousand small and large items it needs for its daily operations. Inventory management is the art and science of managing inventory accurately, ensuring that nothing is lost between the supply chain and on-table delivery.
Inventory management at a restaurant involves keeping track of all stock levels in real time and making sure your kitchen is able to serve any menu item to a customers at any time. When you are managing the inventory of your restaurant, you need to be constantly on top of your asset tracking and inventory control.
Inventory Management for Small Restaurants Vs. Large Chains
- When it is a large chain of restaurants, the inventory is spread out across multiple locations of each outlet and is both, expansive and exhaustive. On the other hand, a Small Business, has lower inventory levels that are easier to manage.
- Inventory Management across multiple outlets of a large chain can help you move inventory stocks from one outlet to another when stocks are low at one location. This is, however, not a possibility with a small business.
- Small businesses can use free inventory systems available in the market for inventory management on a small scale. However, for a large chain, inventory management systems can be an expensive affair, because they run on a monthly subscription basis.
- Small businesses can easily use one compact restaurant management suite to address all their business needs like order management, warehouse management, supply chain management and so on, while large chains often prefer different software solutions to manage different jobs. These different solutions can however be integrated with one another for better business optimization.
If you don’t have an efficient Inventory management system in place, you might end up throwing away food or running out of supplies when you need them most.
The best way to avoid these problems is to implement an inventory management system that works for your small business. These 5 best practices will help you get started!
Inventory Management Best Practices- No. 1 Planning
Good inventory management needs excellent planning and organization. Inventory management best practices would include accurate planning and organization for complete inventory control. Your plan must include designated storage spots for each inventory item and your staff should be aware of these at all times. This will help you move around your inventory stocks efficiently and help boost your sales as well. Divide and organize all inventory items according to their type and usage, so that it becomes easier to find and move items.
No. 2 - Maintain Optimum Inventory Levels
One of the Best Inventory management practices is to maintain optimum inventory levels and never overstock the shelves. Use your supply chain to purchase only the quantities you need and do not overstock. This can increase your costs as well as affect your revenues. Make sure your inventory doesn't run out of the essential goods you need every day, and keep these stocks flowing. Accumulating a large quantity of dead-stock that rots on the shelves is not a healthy inventory management practice and can end up affecting your finances.
No. 3 - Use The Right Inventory Management Software
Use Pos Systems such as Plum POS or Toast POS, whose integrated point-of-sale solutions for restaurants take care of all their sales needs while also efficiently managing the inventory, supply chain and warehouse. These cloud-based POS systems are directly linked with inventory management software and help restaurants keep a tally of their stocks, and inform them about when they were used. You can also use these management systems to place further purchase orders, keep track of these orders and manage supplies when they arrive.
Managing inventory can be a challenge for any restaurant, but the task is especially difficult for a small one.
If you don’t have enough of the right items, customers are unhappy. If you have too much of the wrong thing, your employees are stressed.
No. 4 - Track Daily Consumption
Keep track of the daily consumption patterns at your restaurant and all its outlets. This will help you know what demand to expect in the future, how to plan your inventory management, how much safety stock you must have on the shelves, and so on. Your Supply Chain management will also get easier with consistent tracking of the inventory. With a good inventory management system, you can go one step further and prime your software to send you purchase order prompts, based on your inventory usage patterns and demand levels. Keeping track of your inventory will ensure you never run out of stock during a busy day.
No. 5 - Reports and Analyses
Lastly, one of the most important management practices that can help a business thrive in the long run is to review reports and insights generated by the inventory management software. When you take a deep dive into how your business operates on a daily basis, you will be in a position to make better decisions for it. You can visualize which inventory stocks are performing well, and assess their contribution to your overall operation.
Benefits of a Good Inventory Management System
- With a good inventory management system, you can accurately keep track of all your inventory stocks in real time and eliminate the fear of running out of goods in the middle of a busy day.
- An inventory management system will also help you with reminders to place purchase orders for goods that are running out. This will make sure your Order Management is more streamlined.
- You can integrate your inventory management system with other restaurant management systems, such as POS systems to directly keep track of sales data and adjust inventory accordingly.
- Inventory management systems send out alerts and notifications when essential inventory stocks are about to run out. This will help you to take prompt action and make sure the inventory is restocked before business hours.
- With optimized inventory management, a restaurant can curb wastage and save on operating costs. It can also put a check on theft and improve its bottomline.
Inventory management is a never-ending process.
It’s not enough to just stock your shelves with what you think will sell. You need to know how much inventory you have and how much you need.