How your business can implement various inventory management techniques
What is an inventory system?
When you go to a store or a restaurant, it can often be confusing and overwhelming. How do they keep track of all the products it has? An inventory system is a listing of how much of each product is in stock. Restaurants need to have an inventory system because restaurant owners keep track of how much of each product they own so that they know when to order more and what their sales are. A restaurant inventory system tracks the ingredients coming in and out of your restaurant. Inventory control traces the number of products ordered, things that come out of the kitchen and bar, and what is left over as remaining inventory. Sometimes inventories are manually updated, but nowadays most inventory management strategies are automated and use barcodes, RFID chips, or radio frequency identification tags. This article gives a simple definition and some examples.
How do you create an inventory management strategy?
Inventory management strategy is an effective method to keep track of the inventory levels in your business. It helps you stay on top of how much product is available and what needs to be ordered from the suppliers. Restaurant inventory management is an important part of running a restaurant. The method of managing products and raw materials coming to your restaurant as well as the resources required to give to your guests is known as restaurant inventory management. With increased competition in the restaurant industry, restaurant owners should maximize inventory management to gain new customers, cultivate repeat business, and expand the customer base.
The first step to creating an inventory management strategy is to understand how much inventory you have. This can be done through the use of tools like point-of-sale software and barcode scanners. There are also many other ways to measure inventory, including counting the items that you own, tracking your Purchase Order and sales order, or using price monitoring apps. By setting up an effective Inventory Management system, you can guarantee that your customers receive the freshest items possible. As a restaurant owner, you should invest in inventory management software that helps you with this task.
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When to start implement inventory management techniques?
The restaurant inventory includes all the materials your kitchen staff uses to make menu items from the main ingredients to sauces and seasonings. Inventory management techniques are essential when running a restaurant business. It is used to identify and reduce the amount of overstock in a restaurant's inventory. Due to this, these techniques help save time and money on storage and labor costs. But when should you start implementing restaurant management techniques? If you own a restaurant, you should be implementing inventory management techniques as soon as they're needed. One method to establish an inventory management strategy is using an inventory spreadsheet or a data-driven approach. However, before implementing inventory management strategies, you need to create an accurate forecast for the product demand in your location.
Inventory control is essential for the smooth running of your business. It acts as a tool for loss prevention and a method to measure your profitability. When you use inventory tracking, it records the supplies your restaurant receives, how much goes through the kitchen, and how much is left at the end of each night. These factors provide you with the best understanding of what your customers are buying and how much your staff is using supplies.
How to track inventory costs
Inventory is an important part of your kitchen and your restaurant. It is an important area that if not monitored properly has the potential to bleed your restaurant dry. Cost control is a major concern in most restaurants. After labor, food costs are the largest expense for most restaurants. Hence most of them have tight inventory control policies.
Monitor your daily consumption
Monitoring the daily consumption helps you to be in tune with the stock available across all your outlets. You can also create a monthly inventory report using a restaurant management system. It can be made manually or using restaurant management software that has an inventory module. This report helps you to understand the exact amount of items in the inventory, the misappropriations if any, which are increasing the input cost of your restaurant.
Focus on recipe management
Another method to track restaurant inventory costs is to have an integrated recipe management feature in the POS software. Depending on the number of orders placed in the POS for a particular item, restaurant owners can keep track of raw ingredient consumption.
Analyze the yield of each item
Most of the wastage happens in the kitchen and inventory as the restaurants end up ordering more stock than required. When you understand the exact yield of the item, it helps to know how much of each ingredient is needed to prepare each dish and order for stock based on that. This helps to manage inventory costs as well.
Best management software to use for your business
ZipInventory, from the house of Hubworks, streamlines your inventory operations and helps you to take inventory counts. Once you take the count, the results are automatically synced to the cloud. This inventory management software helps to track all your restaurant inventory in one place and helps set different count frequencies for the items that are stocked. Users can configure the count frequency of each item and keep count sheets. ZipInventory Standard is priced at $125 per location per month. In this package, it provides Budgeting Tools, Inventory Count Sheets, Food Beverage Cost Projections, Free Mobile Inventory App, Inventory Reports, etc. ZipInventory Professional is priced at $175 per location monthly with some additional benefits.
xtraCHEF by Toast is a cloud-based restaurant Inventory Management software. It integrates directly with Toast POS. This provides EDI connections, vendor ordering and payment portals, scan-to-enter invoices, and other features. It also has a visually driven dashboard. Its 'On the House' package subscription is free while starter and CHEF's choice packages are custom quoted.
Upserve by Lightspeed is another restaurant inventory management software that is apt for small and midsize restaurants. This inventory Management System helps restaurants that wish to automate administrative tasks like receiving supplies and ordering easily. Upserve offers ingredient-level inventory tracking. This is done by creating a recipe for each of the food items on your menu. It also has an order tracking alert feature. Upserve's Core is priced at $59 plus $60 per terminal. Pro package is priced at $199 plus $50 per terminal while Pro plus is priced at $359, plus $40 per terminal.
Key Restaurant Inventory Statistics:
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How do you identify your reorder point?
Optimizing the ordering process is important to ensure that your restaurant has sufficient inventory to meet its demand. It also helps minimize the risk of dead and surplus stock, which may lead to profit losses. To understand when exactly a reorder is needed on your food or beverage inventory items, you should determine the reorder level, also called PAR level.
A reorder point is essentially a metric that informs executives of the best time to process another supplier order. It is the minimum amount of inventory that a company should have on hand at all times.
Restaurants will have reorder points for each product in their inventory from consumables to finished goods. A reorder point enhances stock management and minimizes manufacturing bottlenecks and Supply Chain disruptions. Reorder points help businesses with large volumes of products grow and help managers to keep a better eye on stock levels.
To address shifts in consumer demand and optimize ordering, restaurant owners need to calculate reorder points daily or as frequently as they can. If your restaurant has several products and is using an inventory management spreadsheet, it's time to upgrade to an inventory management software like ZipInventory. Inventory management software automates the reordering process and other inventory management tasks for you. It saves time, reduces errors, and adapts to changes in sales trends.
Are you getting the benefits from an effective inventory management?
Categorizing and organizing stock, setting automated reorder points, streamlining the inventory management process, and using technology to forecast demand are some of the methods that help you to manage inventory more effectively.
Here are a few practices-
Put labels on shelves to help staff find items quickly, This helps to keep track of inventory levels and restocking of goods easier and faster. Keep a track of the most-used goods and keep them in an easily-accessible spot.
Review the performance
Every month, take time to review the restaurant's performance. Use the POS system to analyze how you've managed the inventory and whether you've fared better than the previous month. This data helps small business and restaurants to make decisions for the future. It ensures that you don't make the same errors again and helps implement a sophisticated inventory management system.
Be mindful of your menu and food wastage
When you keep track of the inventory levels regularly, you're going to end up with a better idea of the food wastage that's happening. Once you get the hang of it, you can manage it well. If there's a particular item that is not used optimally, try to figure out the reason and find ways to tackle it. One way to make the most of your supplies is to design the menu effectively. Stay away from individual menu items relying on ingredients that cannot be used in other dishes. Instead, find common ingredients and use them for other food items.
Invest in a good POS system
A good POS system helps enhances your inventory management and Order Management in a big way. Tracking food wastage, current inventory levels, and stock levels, alerting you when a particular food item is running low are some of the perks of a good POS system. With a few clicks, you get access to all the data related to inventory management techniques. This is helpful when you are analyzing your performance and making decisions to implement changes at work.