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How to Fix Your Restaurant Inventory Mistakes

Editorial Team January 3, 2020 Comments Off on How to Fix Your Restaurant Inventory Mistakes
How to Fix Your Restaurant Inventory Mistakes

Improving your restaurant’s inventory management 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 what the reasoning for previous noncompliance, it’s never too late to change your inventory management habits.

What is Restaurant Inventory Tracking? 

First things first, what is restaurant inventory tracking? 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 leftover 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.

You’ll also be able to determine if your supplies are going to satisfied customers (as they should). Additionally, you can see if 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 we dive into how to fix your restaurant inventory mistakes, here’s a quick overview of relevant terminology.

Sitting Inventory

This is the inventory that you currently have. Depending on your business model, you will calculate sitting inventory in either the amount of product or the dollar value of the product.

Depletion

This describes the amount of product used in a certain period. 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.

How to Correct Inventory Management Mistakes

Now that you understand common food-management terms, let’s take a look at inventory management mistakes and how to correct them for 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.

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) are used in each dish. Your forecasting won’t be accurate unless you have an excellent understanding of the ingredients for each recipe.

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. Taking a look at what food your staff isn’t using to help narrow down what you need to order next time.

Solution: Holding 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

Create detailed reports after every inventory management session. Reporting will help you understanding seasonality and historical variances, which helps you more accurately forecast what you will need at any point in the year.

Solution: Easy-to-Use Reports

The restaurant industry is busy. You won’t have time 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 About Food Safety and Management

Now that you have a basic understanding of restaurant inventory mistakes, learn how to appropriately manage your restaurant’s inventory with the information in our food safety course. Sign up for your training today!

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