How to Execute Restaurant Food Inventory Management Right

Your inventory is the lifeblood of your restaurant. Composed of all the supplies needed to make your restaurant function, keeping track of what you have in stock has a major impact on your daily service.

While there may be restaurants who “wing” their restaurant inventory management, in order to track inventory effectively, you have to take it seriously. Here’s more info and tips on restaurant inventory management to set you up for success:

What is inventory management?

Inventory management is the process of tracking your restaurant inventory to prevent loss and keep an eye on profits. There are three main things you want to track when managing your inventory:

  • Inventory coming in: These are supplies that are coming in the door of your restaurant--raw materials you have ordered from a vendor.

  • Inventory that is used: You’ll want to track what inventory is being used during service. You can often track this inventory by looking at how much stock you have at the beginning of an inventory period, compared to what you have at the end. Which naturally brings us too…

  • Ending inventory: This is the inventory you are left with at the end of any given tracking period.

Now, inventory checking periods are up to you, but generally speaking, items like food that are more perishable and move quickly should be checked weekly. Materials like glassware, appliances, cleaning supplies can be checked on a monthly or quarterly basis.

Why is it important?

There are many good reasons to check your inventory. On a very basic level, inventory management will help ensure you always have essentail materials on hand. The last thing you need is to run out of key ingredients in the middle of a busy service. However, here are a few other ways reasons to do inventory management at you restaurant:

  • Combat food waste: Up to 10% of food is wasted in a restaurant before it ever has a chance to meet the customer’s plate, which hurts your profits and your restaurant’s sustainability practices.

  • Achieve better food cost percentages: You can read all the nitty-gritty details about food cost percentages here, but tracking your inventory is a crucial step to having a healthy food percentage costs and driving more revenue.

  • More peace of mind: Effectively managing restaurant inventory means you don’t have to worry about making unexpected adjustments to your menu, which can cause stress for you and your staff.

  • More accurate profit margins: If you don’t know how much of your inventory is being used, it’s going to be really hard for you to calculate your restaurant’s earnings on any level.

  • Highlights problem ingredients: If the same ingredients deplete quickly over and over, then you can start investigating why and how fix those problems!

What might be causing areas of loss in your inventory? We thought you'd never ask! Check into these usual suspects first:

  • Spoilage: When food goes bad before you can use it.

  • Spillage: When food ingredients get spilled and therefore can not be used for service.

  • Employee mistakes: When food gets rung up incorrectly, dropped on the wrong table, etc.

  • Unhappy guests: When food is comped to smooth over a negative customer experience.

  • Family meals: When inventory is used for a communal staff meal before, during or after service.

  • Breakage: When plates, glasses, etc. break during service.

  • Theft: When inventory items are stolen from your restaurant.

Best practices for inventory management

75% of restaurants struggle with profits because of their food costs. Inventory management can help you combat this issue, but you need to be smart about it. As you begin to build more processes around tracking inventory, here are some tips to keep in mind:

  • Have a process for receiving inventory. Running a restaurant, you are going to have deliveries coming in before and sometimes even during service. Many can fall at the same time on the same day, which can prove to be a little overwhelming. Have a set process for receiving orders. We suggest making sure that the items and the quantities being dropped off match the delivery invoice before signing off. Have the person receiving the delivery also add their initials and date to the invoice in case you need to go back and ask your staff for additional info.

  • Train your staff on inventory. Restaurants are busy places with many needs often springing up at the same time. Training your staff on inventory will allow you to tap them for assistance receiving, entering and checking inventory. When they are trained they can also keep an extra eye out for when supplies get low.

  • Establish a par. Par is the minimum amount of inventory that you require for each item. If your inventory is below par, you know it’s time to order more.

  • Schedule weekly and monthly days for inventory. Assign it as a definitive part of a shift. This makes inventory a nonnegotiable priority.

Options for managing your restaurant inventory

There are a lot of different options out there when it comes to the actual act of taking inventory. Let’s tackle tech first. Generally speaking, there are two routs you can take. You can consider getting a POS that does inventory management for you. (For more on POS systems, check out our comprehensive guide!)

You can also look into inventory management apps that you can manage from your phone or computer. Here are some things to keep in mind as you are scoping out if this tech is right for your restaurant:

  • Price: Is it a one time fee or a subscription model? Does it fit within your monthly and annual budget?

  • Ingredient-level tracking: How granular is tracking when it comes to food? Can it track ingredients connected to where they are used on the menu?

  • Easy of use: Is it user friendly for you and your staff? Can people be trained on it quickly?

  • Integrations: Does it easily integrate and communicate with other technologies you are using for your restaurant?

  • Customer support: Are you able to access support 24/7 if something goes wrong? Are there resources or account managers available to help you optimize your inventory using the technology?

If tech solutions don’t fit your needs, then the next best thing is to create an inventory spreadsheet for your restaurant. This is a document that will allow you to physically go in and track your inventory week to week. Here are some examples, but you should make your inventory tracking sheet fit your restaurant’s needs.

Not every inventory-management solution works for every restaurant. But please, please, please don't try to track inventory in your head! It’s just going to cause chaos for your kitchen. Your front- and back-of-house staff thank you in advance!

What technology or applications do you use to keep on top of your inventory? We want to know:

[Photo: Jason Jarrach via Unsplash]