Stock Up On Savings: Best Practices for Cost-Effective Inventory Management

Practical Steps to Control Your Inventory and Reduce Your Food Cost

For all the discussion in the restaurant industry on big data, IoT, omni-channel interactions, and automation, it can be tempting to think only of the ways that technology opens up new ways of running restaurants. But what about one of the most foundational areas, such as managing your inventory?

As restaurant managers become responsible for more than ever and franchise organizations scale to new heights, neglecting the many ways that technology can solidify the foundation that props up everything else is a missed opportunity that will put your restaurants behind the rest.

Inventory mismanagement will negatively affect many areas of your restaurant operations, but one result is certain: your food costs will go up.

To avoid this costly fate, here are 5 inventory management best practices you can start implementing today in your quick service and fast casual restaurants.

Keep Inventory Top of Mind for Managers

Your managers know they need to track and manage the inventory, but here’s the problem: managing restaurants is no easy task, and your managers operate in an environment that can shatter their focus. Yet proper inventory management requires that your most critical inventory items—your proteins—are tracked every day.

Tracking your most important inventory items every day might sound basic, but if even the basic items are not built into your daily procedures, such as your restaurant management solution, they can slip from your managers’ lists.

This is why established workflows, such as Task Lists, that must be completed every day, and even at every shift change, are essential to keeping this top of mind for your managers and ensuring that inventory issues are addressed immediately.

Know Your Variance

The key to tracking down missing inventory quickly is your variance numbers. Your variance is the difference between what you should have used (ideal) and what you actually used (actual). This is the number that tells you how much inventory is missing.

Here’s what this looks like for your managers: after updating the inventory counts, run a quick variance report. If this shows missing inventory, you can then double-check the counts on the items in question. If the counts are correct, then you know inventory is missing and can get to work tracking it down.

Track All Inventory Weekly

Your high-value proteins are the items that need to be tracked at every shift change. Your restaurant management solution should also ensure that managers are tracking all your inventory items on a weekly basis.

The focus on the high-value items throughout the day is what keeps this from becoming a burdensome task for your managers. When you track the top 5 items at every shift change, the top 15-20 items at closing, and all inventory, including paper products, weekly, you can maintain proper inventory management while giving managers a realistic process that works in the fast pace restaurant environment.

Good inventory management also allows your managers to place accurate orders. When these inventory procedures are followed and combined with accurate forecasting, this ensures the next order the manager places is sufficient but not excessive.

If this process breaks down, your managers are more likely to over order to avoid running out of food—resulting in excess inventory sitting on the shelves. Or even worse, they might not order enough and run out too soon.

When inventory items are depleted, this forces either expensive expedited orders, transfers between restaurants, or informing guests that items are no longer available. In every case, the costs of running out of inventory are high.

Enter Inventory Counts Once

Your inventory counts need to be accurate in order to create confidence in your food cost reports and suggested ordering amounts. The best way to ensure accuracy with your counts is to rely on mobile solutions that allow managers to move through the store and enter inventory directly into your restaurant management solution.

Otherwise, managers are forced to record the counts then go back and enter the numbers again, taking up unnecessary time and increasing the likelihood of errors.

Establish Inventory Standards

Inventory management is about more than just counting the amount of inventory on your shelves. It involves a lot of decisions, from what counts as a high-value ingredient to the unit of measurement it should be counted in.

Established workflows ensure that everyone is working from the same playbook. When managers move between restaurants or new managers need to be trained, you can trust that standards will be upheld.

Ultimately, making proper inventory procedures a reality requires establishing company-wide standards and giving your restaurants the right solution to follow the standards.

Gain Complete Control Over Your Inventory

RTIconnect Restaurant Management, powered by SICOM, offers complete inventory management—from predictive inventory ordering to comprehensive tracking.

Control Inventory and Lower Food Cost

Learn more about inventory management from SICOM

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Neal Starkey
August 6, 2018

With more than 30 years of experience serving the restaurant industry through enterprise software solutions, Neal specializes in the building and maintaining of restaurant management solutions that drive restaurant profitability.

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