How to Fix Your Restaurant Inventory Mistakes

Improving your restaurant's inventory is the quickest and most effective way to save money and increase revenue. Unfortunately, many restaurant managers and employees don't know how to manage inventory effectively. No matter how long you’ve been in the business, it's never too late to change your inventory management habits. Read on to learn more about common inventory mistakes restaurants often make and their simple solutions.

WHAT IS RESTAURANT INVENTORY TRACKING?

To gain a working understanding of restaurant inventory tracking, it is important to be familiar with specific information that tracking needs to effectively provide. In simple terms, restaurant inventory monitoring is all about answering three questions:

• What food and supplies do you have coming into the restaurant?
• What foods are customers consuming?
• What food do you have left over in the kitchen?

Understanding these numbers will not only paint a picture of where your money is going, but it will also help you order new supplies and food while minimizing waste. As food is used or expires, tracking will help to replenish those things and make operations as smooth as possible. You'll also be able to determine if your supplies are going towards satisfying customers (as they should).

Inventory tracking can also identify whether you're missing food due to employee mistakes, staff meals, or theft. Without an understanding of where your food is going, you can't have an accurate picture of your earnings and revenue. Every restaurant has different methods for taking inventory and different approaches to how frequently they manage their inventory and do forecasting. Most restaurants approach inventory management by completing counts and measurements on a daily, weekly, and monthly basis. A good practice is to schedule inventory checks before you're slated to order your next batch of food or ingredients.

INVENTORY TRACKING TERMINOLOGY

Before getting into restaurant inventory mistakes, here's a quick overview of useful terminology.

• Sitting Inventory - This is the inventory that you currently have. Depending on your business model, you will calculate the sitting inventory by either the amount of product or the dollar value of the product.
• Depletion - This describes the amount of product removed from sitting inventory within a set period, for example, the amount of tomatoes used or spoiled per week. Once again, depletion can be measured in the amount of product or the dollar value of the product. You can calculate depletion on a daily, weekly, or monthly basis.
• Usage - The period you have until you run out of a particular product. You calculate usage by taking your sitting inventory and dividing it by the average depletion. For example, if you have three jars of pickles and you use one jar of pickles a week, you have three weeks of usage left for your pickles.
• Variance - This is simply the difference between product cost and usage amount cost. So if you have three chickens but sold two chickens today, your variance is one chicken (or the dollar equivalent of that chicken). This single chicken that's left could still be in the fridge, or it could have been a part of a theft or employee accident.

BENEFITS OF INTEGRATED INVENTORY OR POINT OF SALE (POS) SYSTEMS

One of the biggest leaps forward for restaurants is integrated inventory or point-of-sale (POS) systems. These have condensed multiple tasks into one integrated interface. POS systems use technology to improve decision-making, simplify procedures, and boost customer satisfaction.

Inventory management and POS systems work together to minimize overstock, avoid stockouts, handle reorders effectively, and provide real-time tracking. This gives customers shorter wait times, better information, and a better experience overall.

Using POS systems helps you make better decisions for satisfying customers. They do this by gathering information on sales trends, inventory turnover, and client preferences. This enables you to recognize patterns, estimate demand, and adapt their inventory and sales tactics. By integrating this technology, designed for restaurants, you simplify the entire process.

HOW TO CORRECT INVENTORY MANAGEMENT MISTAKES

With help from these common food-management terms, we can take a look at inventory management mistakes and how to correct them. Each of these can contribute to developing the most efficient inventory tracking processes.

MISTAKE #1: ORDERING WITHOUT ACCOUNTING

Although many restaurant managers have a plethora of experience, this is no substitute for actually monitoring your store's food. Unfortunately, many managers use their years of experience as a substitute for thorough calculations. With the variance in food needs from day to day and shift to shift, calculations are really the only way to ensure there is no food waste or lack of ingredients.

SOLUTION: ACCURATE CALCULATIONS

Spending the time to count your sitting inventory to forecast what food you need will save you thousands of dollars. Using POS systems to help generate forecasts will also cut back on under-ordering and food waste. This should occur on a regular, scheduled basis; otherwise, it will lose its effectiveness in reducing costs.

MISTAKE #2: LACK OF RECIPE KNOWLEDGE

Unless you know what ingredients form each one of your recipes, there is no way you can accurately order food for them. Understanding general ingredients isn't enough, either. You need to know precisely how much of each item (including spices, butter, and garnishes) is used in each dish. Your forecasting won't be accurate unless you have an excellent understanding of the ingredients for each recipe. This also applies to any employee who is involved in inventory or ordering.

SOLUTION: BECOME FAMILIAR WITH RECIPES

Depending on the organizational structure of your restaurant, you'll need to approach different people for a true understanding of the recipes. You might need to reach out to the corporate office, restaurant ownership, or the head chef. Once you have an understanding of the recipes, monitor the kitchen staff to account for any recipe variations in your forecasting.

MISTAKE #3: NO WASTE MONITORING

While you may think you have inventory counting and forecasting down, you probably haven't been monitoring waste. Some avoid taking a look at what food the staff isn't using, assuming that the waste is either minimal or not trackable.

SOLUTION: HOLD EVERYONE ACCOUNTABLE

Obviously, we're not recommending that you search through your trash. Still, someone is throwing food waste away, and you're going to want to touch base with them. Ensure that all of your employees know that you want to be informed every time they throw out expired, unused, or unfinished food. Consider creating a sheet that employees can fill out every time they toss food waste out.

MISTAKE #4: LACK OF REPORTING

Reporting helps you understand seasonality and historical variances, which helps you more accurately forecast what you will need at any point in the year. Tracking week-to-week without analyzing shifts in usage and variance over the longer term is a huge blind spot.

SOLUTION: EASY-TO-USE REPORTS

Create simple but detailed reports after every inventory management session. The restaurant industry is busy, making it difficult to create reports from scratch each time you double-check your inventory. Instead, create a template for each type of inventory check you do that you can duplicate. You don't have to reinvent the wheel. You just need to ensure you have your inventory details in an organized and easily accessible place.

LEARN MORE WITH LEARN2SERVE

With this basic review of restaurant inventory mistakes, you can put a lot of knowledge into action, and you can start to appropriately manage your restaurant's inventory. For even more details and information on how to reduce costs and improve customer satisfaction, check out our food manager certification course. Head to our website to get started today!