An important part of running a restaurant is inventory management. Properly managing your food inventory keeps your service running smoothly. However, failure to do so can impact your finances. Small mistakes in inventory management can lead to food shortages. They will also lead to unnecessary food waste and inaccurate forecasts. All of these affect food and beverage cost control in your business.
As per reports, up to 12% of food inventory purchased by restaurants is wasted. That means 12% of food costs don’t generate revenue. Inventory management is not the most desirable aspect for restaurant owners. However, it is an essential part of running a profitable business. The main reason restaurants fail is the mismanagement of costs. If you grow your expertise at managing your inventory, you will be able to manage your revenue just as easily.
The biggest risk for the food and beverage industry is rising wages and food costs. If you don’t constantly strive to improve your profitability and increase your sales, it will cost you. Consistently and aggressively reducing costs is essential to sustaining current levels of success.
But inventory management is tiresome and tedious. We probably can’t make inventory management fun, but we can recommend the right tools and systems to ease the pain. By the end of this article, you will know how to leverage inventory. After this, your food inventory management process won’t seem that bad.
Article Content-
- Meaning of Food Inventory Management
- Why is efficient inventory management of food inventory important?
- Reasons why inventory management matters in the food inventory
- Benefits of great food inventory management practices
- How SWIL software simplifies your food inventory management process
- In summary
Meaning of Food Inventory Management
Food inventory management is a way for restaurants to track how much inventory they have at a particular time. By understanding this information, restaurants can improve inventory purchases. They can also minimize inventory losses due to theft, spoilage or disposal. This will maximize profitability. A restaurant business familiar with merchandising is always aware of:-
- Purchased inventory and its quantity
- Amount of inventory consumed on a daily basis
- Amount of inventory remaining at the end of each day
Why is efficient inventory management of food inventory important?
If a restaurant overstocks a particular item and not all is consumed within the prescribed time, the food will spoil, leading to loss of business. Restaurants can’t serve customers due to out- of- stock, which leads to a loss of customers. The industry is growing and faces mean competition from all directions. An efficient inventory management system can help your company in becoming an industry leader. Fast food chains are constantly improving working on improving their inventory management processes.
Inventory management systems help improve business practices in restaurants. As mentioned earlier, inventory tracking systems help food and beverage companies effectively manage waste. Also, they increase productivity, and improve cash flow.
It is common to pay attention not only to the total market value of a product, but also to its manufacturing cost. However, some food companies don’t give their inventory the same attention. Maintaining an efficient inventory control system will help you balance overheads. You can also adjust menu prices and create portion control plans.
When a company implements the right control system, it finds itself in a good position to make business decisions. For example, you may find that a particular menu item’s profit margin is lower than expected. In this example, if the product doesn’t sell, you’ll be spending more money, negatively impacting your cash flow. You can use this information to make changes to recover lost profits and protect yourself from similar pitfalls in the future.
An efficient inventory management system efficiently carries out the following:-
- Reduce the amount of waste
- Optimize food safety and reduce food health risk issues
- Improve shipping and packaging processes and reduce costs
Reasons why inventory management matters in the food inventory
1.Tracking of food waste
Food product tracking is critical for any industry. In the food industry, detecting food waste makes it easier to target the most vulnerable areas. You can identify where losses are occurring. By tracking key data such as spoiled food, dropped food, and unfinished meals, you can identify trends and take action to improve.
2. Stable Prices
Your customers’ don’t want the prices of their favorite menu items to change. But there are many uncontrollable external factors that require decisions. By managing your inventory, you can choose these menu prices to keep their customers happy.
3. Consistency
When your business is in multiple locations, you should look out for consistency. You need easy tracking and excellent quality control throughout your supply chain. A powerful inventory management system makes it easy to track all your goods. It ensures quality, no matter which location your customers choose.
Benefits of great food inventory management practices
1. Theft prevention
About 70% of restaurant workers worldwide have committed at least one theft, impacting their bottom line. Effective management of restaurant inventory can prevent food and cutlery theft.
2. Improving waste management
Inadequate tracking of food quantity and freshness, improper recipe formula, and improper methods of preparing menu items can lead to wasted inventory. Good restaurant inventory management practices can help mitigate all of the mistakes.
3. Better supplier relationships
Ingredient quantities are predicted with the highest accuracy. This is so requirements can be better communicated with suppliers. This not only helps build good relationships, but it also helps reduce acquisition costs.
4. Better prediction of food costs
Grocery costs are a large part of a restaurant’s expenses. With a good restaurant management system and point- of- sale software for restaurants, you can map ingredient amounts so you can calculate an accurate meal cost.
5. Higher investment potential
Efficiently managing restaurant inventory reduces costs and increases profits. That means you will have sustainable cash flow. It allows you to invest in different aspects of your restaurant. This includes hiring more staff and improving the ambience.
6. Less customer dissatisfaction
By implementing an accurate restaurant inventory management system, you will be notified when your food inventory is approaching a stock- out situation or expiry. Your customers will never be denied their favorite dishes. This in turn, increases customer happiness and reduces dissatisfaction. Ensure your customers are happy at all times so that you never lose out on valuable sales and new potential customers.
How SWIL software simplifies your food inventory management process
SWIL comes with powerful software that simplifies the food inventory management process. This software facilitates inventory management for your restaurant. It also protects against losses due to expired inventory. It has a robust POS system that allows you to easily manage all your business processes. A feature that sets us apart from other food inventory software solutions is our smooth testing process. It also provides real-time overviews of prices, inventory, out-of-stock scenarios, and sales. It also gives you a report on store associate performance, expiry dates, returns, and waste management.
In summary
In the food industry, every second counts and all items in inventory must be sold or used by a certain date. You need to make sure your groceries are fresh and not overstocked or understocked. The food industry is constantly confronted with immense competition. That’s why an efficient inventory management system makes a difference. It helps you differentiate yourself from your competitors and keep your customers happy and coming back.
