Operations – How To Manage Your Inventory

Managing inventory can be a time consuming task, but with ever reducing margins, controlling your inventory could have significant benefits to your bottom line. Food costs play a significant part in any restaurants success or failure, and although playing the part of ‘businessperson’ might not be the highlight of your day, it is a necessary part.

A restaurant’s inventory is comprised of items purchased each week in order to put food on the table. Those items could range from the flour to make your pizza dough, to the paper plates you serve it on. Items such as cleaning supplies should not be included in your food cost inventory. Each item purchased plays a pivotal role in how much money you’re making in any given week.

Food cost is the percentage of total restaurant sales spent on food products. The formula for calculating food costs is net food purchases divided by net food sales. Food costs will vary depending on where you are located, but in general try to keep food costs somewhere in the neighborhood of 25% to 30%. If you find that your food costs are significantly more than this, you should try bolstering your inventory management plan.

Although sophisticated inventory management systems exist, the process can be as simple as manually counting all of the stock items and noting them on a pre-made log sheet, or in a spreadsheet. To make your weekly inventory as simple as possible, arrange items on the inventory sheets in the order they are arranged on your shelves. If you are using an order guide, arrange your spreadsheet to match that of the order guide. You can then record your counts on the order guide and transfer them to the spreadsheet for calculating the total value. It might also be a good idea to take note of any sell by dates that are approaching.

Always conduct inventories by starting at one end of the building and counting everything in a continuous order. This practice will help ensure nothing is skipped. Also, setting up your inventory control procedure to involve two people not only makes it less likely that anything will be missed during the inventory count, it is also a good general safety and anti-loss measure.

Restaurants that do not control inventory will have a harder time competing in today’s harsh foodservice market. Although there are exceptions to the rule, it would be hard for an inefficient operation to compete with one thatis highly efficient. To close, here are three rules to remember that might make inventory control a little easier: Order as necessary; maximize each ingredient; cook seasonally.

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