A healthy Restaurant Inventory is one of the greatest assets of the entire restaurant operations. It not only smoothens the processes but also helps in controlling and managing your Restaurant’s Food Costs. This is why its management is so important… Being careless about the Inventory in your business is one of the biggest mistakes you could ever make! It would be to be careless with your business itself!
What is a healthy Restaurant Inventory?
A restaurant inventory consists of all the items required to prepare dishes (ingredients, raw materials, etc) but also drinks, and everything you need to keep your business running. For instance, if your Restaurant offers delivery, delivery packaging is part of what you should have in your list, because it is a key element for your restaurant to fulfill its service, right? So, there is Food & Drinks. A healthy inventory is one that contains what you will need in adequate quantities for a specific period of time -no more, no less- in which control is such that waste and theft is very close to nonexistent.
Why is it Important?
Managing the restaurant’s inventory is one of the core activities in the restaurant operations, yet it might be one of the most tedious tasks to be taken care of for some people. Don’t you think? However, if you are not paying attention to it, or if you do not do it properly, you will definitely face losses, small & big and more frequently than you think -or would like to admit.
On the contrary, proper inventory management brings you lots of benefits; smooth processes and flows, and much less waste of many kinds!!!
Some might think a healthy inventory as defined previously is impossible! These are some general recommendations experts do to maintain a Healthy Restaurant Inventory.
Automation
As mentioned before, restaurant Inventory Management is one of the core activities in the restaurant operations. Therefore, the way in which this inventory is carried out does matter.
Perhaps Excel sheets and manual registers seem to be the easiest and the cheapest way out. Nevertheless, this method is very laborious and increases the possibility of errors. Manual tracking takes a lot of time and reduces the overall efficiency. Thus, it might be a good idea to think of investing in a software that helps you through carrying out this task and make your workload quite lighter. Some work in the cloud, offer you the option of having different users (Owner, Chef, Waiter…) with different levels of authorizations, and even generate reports at the beginning and at the end of the day, among other very interesting and useful functions. Of course, implementation will take time and proper training will be needed.
Recipe Management
The Recipe Management has to do with the amount of stock consumed in the preparation of a dish. This helps in maintaining a clear track of the items consumed based on the items used preparing the dishes ordered. If you know the ingredients and exact quantities required to prepare a dish, and you know how many were ordered, you must know the amount of each ingredient you actually used and therefore, what you should have left in the storage room, the fridge or so. If you do not practice Recipe Management, thefts and discrepancy in stock will be everyday’s headache because of over portioning, which also results in food, time and labor waste. On the contrary, recipe management helps you have consistency in your products to the public -which is so important!- but also controlling your food and labor costs, and doing an accurate stock forecast.
Stock Forecasting
This refers to the amount of food and beverages estimated that will be consumed for the next period of time (week, month, etc). It is extremely important to be as accurate as possible! On one hand, you don’t want to understock the inventory and run out of ingredients/items because you need to satisfy your customers' needs/demand. However, you don’t want to overstock either the food or the beverage inventory, and there are many reasons: you would take the risk to get them wasted, you would have money “frozen” which you need in your “cashier”. Therefore, inaccurate forecasting or not forecasting at all could bring a lot of trouble and expenses.
There are in the market Inventory Management Systems that can be integrated to your POS. These systems could give estimates of the amounts of each item you could need for a specific period of time, basing these calculations on the order history and the sales reports.
Properly Trained Staff
Automated stock is great, but having properly trained and trustworthy staff is mandatory to do the regular checks needed. It is always recommended to have 2 trained people to count the inventory items. This reduces error but also the urge to pocket any item and therefore, spend more money, time, make bottlenecks in your processes, etc. What kind of training? These people just have to count items!! Not enough… you have to make sure they understand things like: Purchase Units, Food Units, Inventory Categories, the Systems you use in you operations -in case you have any. Because it certainly matters the accuracy of the quantities and units counted down. It is not the same to have a stock of 5 beef empanadas boxes, than a stock of 5 beef empanadas (units), right?
Frequency & Reporting
You must keep a check on the inventory everyday, and calculate the stock available in the beginning, and also at the end of every day. If you have turns, it is recommended to do the checks at the beginning and at the end of such turns as well. So, you can reorder right on time!
In order to maintain a healthy inventory, tracking & reporting is extremely important. First, you have to be sure that the proper Inventory Reports are carried out and updated after each Purchase Order. So, must be the Stock Consumption and Ideal Stock reports.
This is the basis to measure the daily “Variance” (ideal stock-physical stock). A difference or variation of 3%-5% could be “reasonable” in a kitchen due to food handling. Obviously, the more we can do to close the gap and be close to 0, the better!
There are still so many things to consider when doing inventory if you want to make the best out of it! And we will be discussing them in future blogs.