7 Restaurant Inventory Management Best Practices

One of the keys to successful restaurant management is good inventory management. A slight mistake can lead to food shortages, unnecessary leftovers, and inaccurate estimates. All of that has an impact on controlling food and beverage costs for your food and beverage business. Below are some restaurant inventory best practices that can make a significant difference to your bottom line.


What is restaurant inventory management?

Restaurant inventory management is the process of tracking what and how much inventory your restaurant carries at any time. Armed with this information, restaurants can increase their inventory purchases (i.e., not to buy too much or too little), minimize inventory lost to theft, spoilage, or waste, and maximize profits.

With automation, inventory management can be streamlined as it helps you accurately count and track your products. Additionally, it can show important financial and performance data and re-order stock when it reaches certain levels.

Benefits of inventory management for restaurants

Some of the benefits of inventory management for restaurants include:

1. Minimized errors

Proper inventory management helps you catch and avoid small errors before they come back as bigger concerns. You can identify errors, such as double-ordering and overstocking, which often lead to loss of profits. Thus, you can take action before these errors badly affect your overall revenue.

2. Loss prevention

Up to 10% of food purchased by restaurants is wasted before it even reaches consumers. Restaurants buy too much food at one time, so it ends up spoiling before it is served to customers. Food inventory management can minimize these losses.

3. Reduced food waste

Adopting an inventory management system can help you maintain your profit margins. Along with labor costs, restocking your inventory is the most significant expense your business faces. By implementing a stock control system, you can reduce the amount of food waste from your business.

4. Better vendor management

With good inventory management, restaurants can closely track their food and purchases, enabling them to better manage purchases and payments to vendors. 

7 Tips for managing restaurant inventory

Below we take you through seven tips to ensure successful restaurant inventory management.

1. Implement the FEFO method

First-Expired, First-Out (FEFO) is an adapted form of the First-in, First-Out method (FIFO) - used in food manufacturing, retail, and restaurants to make sure that food items are stocked first get used up first. 

FEFO is an organized approach to handling perishable products or products with an expiration date that starts in your warehouse and ends in the store. It is the expiration or sell-by date that triggers this process.

Instead of putting the product directly on the back of the shelf, you first check the expiration date. Then, place the items with the shortest shelf life near the front, if not directly on the front, so customers are more likely to buy them first.

One of the benefits of following FEFO is that it allows you to guarantee product quality, which leads to customer satisfaction and increased reputation. For example, let's say you sell drinks that contain milk. Using the FEFO method will ensure that you sell these products either on their sell-by date or earlier. As a result, your customers will know when they consume your products, they will receive high-quality ones.

2. Keep your stock levels low

With proper planning and forecasting, your restaurant can keep a minimum stock of what's needed until the next delivery arrives. This is the key to effective inventory management for restaurants as it ensures low inventory levels reduce costs, and minimizes losses due to old and damaged items. 

It can be tempting to buy in bulk and save money but save that for non-perishable items like rice or salt or items you use with high frequency. The less restaurant inventory you hold, the lower the risk of wasting food (and money). This way, you will also free up space used up by storage; not to mention, stock-taking will also be much faster.

With ScaleOcean Inventory, you can accurately forecast what and how much inventory you need without overstocking. This means you can use dynamic par rates to order your stock, keeping you on top of your inventory in the most economical and least wasteful way possible.

3. Organize your food storage

The secret to faster stock-taking It's pretty simple: keep your product storage area organized. However, keeping things organized is easier said than done, especially for large and varied food and drink programs.

If your storage space is disorganized, stocking is an uphill battle. The probability of double miscalculation and over-or under-ordering, as a result, is higher than if storage space is organized. To keep your storage space, pantry, and walk-in freezer organized throughout the year, try grouping your items by food category and label your shelves.

4. Appoint a stock-taking team

Although you already have an inventory management system, it is still a good practice to regularly check your stock and see if you have missed something. Note that the information and details on your software will rely on your input.

When it comes to calculating inventory, consistency is vital. Pick a few people on your team to always be in charge of inventory. The same people should also be responsible for taking orders and updating inventory records.

Once you've formed a team, you will also need to create an inventory count schedule. Make sure your team counts inventory at the same time, on the same day. We recommend that you count inventory at the beginning and end of each day.

5. Utilize a POS system

A Point of Sale (POS) system provides many advantages for your restaurant inventory management. It can be integrated with your inventory management system to track orders and provide in-depth insights into which items are most popular and profitable.

A sound POS system will help you calculate the opening and closing stock each time there is a shift change. It will also track stock usage and update current inventory numbers in real-time. So, overall, it's a good investment, especially if you want digital assistance for day-to-day restaurant operations.

6. Perform quality control regularly

Before signing off on a shipment, check that all meat, products, dairy, and other items meet your standards. This aspect of restaurant inventory takes extra time at the dock but is well worth it for avoiding the hassle of returning and refunding defective items later.

7. Provide your staff with proper training

To ensure the accuracy of your inventory, make sure you train your staff thoroughly on the process. Start by training your staff on how you keep track of all food and drink going out and cash coming in. Help them be part of the solution and understand all the processes in place for inventory tracking.

Once your staff understands how to count stock, you can further divide the team, holding them accountable for various tasks. This includes managing stock rooms, taking orders, calculating inventory, looking up prices, keeping up-to-date financial reports, etc.

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