The Importance of Restaurant Inventory Management

As a restaurant operator, you probably find yourself skipping lots of things – a missed lunch and dinner are weekly, if not daily, occurrences. More elaborate things like vacations may be as rare as a leap year – coming around once every four years! There are some tasks that should never be skipped in your operation, though, and we’ve asked our experts – Food Fanatics® Chefs and Restaurant Operation Consultants (ROCs) – their non-negotiable activity in the restaurant industry, and the answer was unanimous: restaurant inventory management.

Effective inventory management is made up of various elements that result in the balancing act of having the right amount of product on hand, while simultaneously minimizing food waste and controlling food cost.

Inventory Tracking

You have to know what you have on hand, and monitoring product usage can help you identify concerns before they become problematic. Food Fanatics Chef Chris Quinn, Cleveland, of OH, says, “Without proper inventory management, your checks and balances can fall out of whack. Intuitive Inventory programs like CHECK® Business Tools solution Craftable are designed to connect you to proper inventory control, and builds bumpers for when you have a spike on a certain menu item or category.”  

Storage and Organization

Food Fanatics Chef Nick Dispenza, of Chicago, IL, says, “Knowing exactly what you have and where it is allows for smoother kitchen operations, leading to faster service and happier customers.”

Restaurant Operations Consultant (ROC) Cat Lindquist, of San Francisco, CA, could not overstate the importance of efficient inventory practices like utilizing a shelf-to-sheet list. "The no-cost US Foods® Inventory Control solution offers you the ability to customize your shopping list to align with your storage shelves, improving inventory accuracy and reducing the time spent counting, resulting in an extremely cost-effective inventory management solution."

Ordering and Purchasing

Inventory doesn’t get on your shelves without someone buying it, so ordering and purchasing routines are a vital part of inventory management.  Many operators use PAR levels to direct purchasing needs. PAR stands for Perpetual Average Replenishment, and they are predetermined quantities of inventory items that a restaurant should maintain on hand to meet regular demand and operational needs. Establishing PAR levels can serve as guidelines for ordering, in addition to a system for minimizing waste from over-ordering AND preventing stockouts from under-ordering.

US Foods' all-in-one e-commerce portal, MOXē®, can also improve the efficiency and speed with which you place your orders. Place an order in seconds when you get caught in a pinch by duplicating a past order, and never miss placing an order with alerts and notifications when cutoff is approaching. 

Forecasting and Planning

Chef Nick Dispenza also noted that a leap year like this one can disrupt your usual ordering patterns with its extra day - and potentially unpredictable business fluctuations. Forecasting that takes into consideration various factors like weather, holidays, community events, and more can help to avoid overstocking (leading to expiration) or understocking (disgruntled customers) during this off-kilter period. Utilizing Same Day Last Year (SDLY) Sales may not work when forecasting for years like this when, in fact, this same day didn’t exist last year – try using Same Week Last Year (SWLY) instead for improved accuracy.  

Inventory Control

The simple act of counting inventory, keeping a waste log or conducting regular inventory audits (especially on high-cost proteins) can have ripple effect in the business by discouraging theft and other negative behaviors from the staff.

Having inventory tracking solutions in place “helps in optimizing costs and reducing waste and shrinkage. By keeping a close eye on this, an operator can make informed decisions to drive consistency in the operation,” says ROC Jesse Moreno, of Las Vegas, NV.

Cost Management

One of the most important reasons to perform inventory is to keep a pulse on your Actual Food Cost.  Many operators cost out their plates in programs like Menu Profit Pro™, but that only showcases the Theoretical Food Cost.  Food Fanatics Chef Ryan McNutt says, “using both starting and ending inventory, combined with expenses and sales, is the only way to ensure you are completely aligned with your TRUE food cost. Many say they sold X in a month and bought Y in a month, and only use these two figures to calculate food cost, which does not tell the full story.”

“In my opinion, effective inventory management is closely linked to the financial health of their business. Accurate tracking allows the restaurant owner to assess their costs, calculate the cost of goods sold, and determine the profitability of individual menu items. This information is crucial to allow them to make informed business decisions for setting menu prices, menu planning and optimization,” says ROC Bill Wingereid, of Cincinnati, OH.

As you can see, streamlining restaurant inventory – and implementing these inventory best practices – can make a big impact on nearly all aspects of your business, and is definitely not something you want to skip this year!

Book your free 1:1 consultation today to review your inventory needs with one of our experts.