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Inventory management is necessary in every
business, but in the restaurant industry, it is even more vital.
More and more restaurants are realizing that it can mean the difference
between success and failure.
Inventory management, the process of controlling costs and waste through
the effective use of on-hand product, combined with a reliable
forecasting model, enables restaurants to realize dramatic reductions in
their monthly spending.
Every business faces the unfortunate fact that employees will steal from
their employer. An effective inventory management system, in addition to
secure storage and lock-up procedures, results in far less loss from
employee theft.
In the restaurant industry, the three main types of inventory management
systems are manual or limited integration, mixed point-of-sale (POS) or
partial integration, and fully integrated.
Manual or Limited Integration
Manual inventory management involves physically counting each item every
week to calculate restaurant costs. This system is suited to small,
independently owned restaurants that purchase few items and maintain
simple accounting records.
After all items have been counted, the data is transferred to the
restaurant's accounting system. If no errors are found, the inventory is
complete. If there are errors, the entire inventory process must be done
again to find the mistakes.
Mixed POS
Mixed POS or partial integration combines manual inventory procedures
and the restaurant's POS system. The POS computer system is used to
order food and drinks as well as to settle checks.
When an item is ordered through the POS system, it is removed from
current inventory. When the items are counted manually during inventory,
the stock-on-hand list should match the POS inventory list. If there are
discrepancies between the two lists, another physical count of inventory
must be done.
This inventory management method is more effective than the limited
system and can be combined with strong loss-prevention procedures to
produce large cost reductions each month.
Fully-Integrated
A fully integrated inventory management system incorporates three
different features into its system: the restaurant POS system, an
ordering/shipping system, and an electronic physical inventory system.
The fully integrated system is the most accurate and sophisticated of
the three systems and results in the least amount of monthly loss of
product and profits.
Some restaurant suppliers provide their large restaurants with an online
ordering system that is integrated with the restaurant's POS system. It
can accurately predict the inventory on hand and forecast the size of
the next supply order.
Once each week or month, a physical inventory is done with portable
electronic barcode readers and electronic scales. These readers
automatically send all data to both the supplier and the restaurant.
Some of these readers are so sophisticated that they include a breakdown
of recipes by ingredient before calculating the inventory. A fully
integrated system will not only save you money in the long run, but also
help you run a streamlined and efficient restaurant business.
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