The Importance of Inventory Management for Restaurant Profitability


Stock Control 3D Delivery ManThe importance of inventory management for restaurant profitability cannot be stressed enough.

Without being able to effectively manage the flow of foods and supplies in an effective manner, the chances of making any sort of significant profit from your food service shrink significantly. 

But how does one effectively take control of their inventory?

Related: Top 6 Tips for Managing Your Restaurant Effectively

What Constitutes an Inventory?

It may seem like a rather inane question, but the question of what constitutes an inventory can play a significant part in helping a restaurant to achieve profitability.

When it comes to a restaurant’s inventory, it is important to realize that you are not only talking about the food itself, but about the food items used to cook or process the food (shortening for deep frying, seasonings, drinks, garnishes etc.) but also about the items used to prepare and present the food and to set the atmosphere (paper placemats, plastic flatware, straws, napkins, disposable cups etc).

Being aware of what products you use in your day-to-day services as well as how many you use and the cost of each product (as well as how that cost translates into the cost of sale passed on to the customer) all come together to create the ‘big picture’ of your inventory and what you need to have on hand in order to maintain the integrity of your service.

But the most important thing that any restaurant owner can do, however, is to find a way to not only organize their inventory, but to maximize their tracking of foods and supplies as well as streamline their re-ordering of needed items.

The Need for Organization

There are four main points that you need to address when considering the organization of your inventory:

1)  An accurate list of what you have available to use.
2)  An accurate assessment of how much you will use on a daily or weekly basis.
3)  A means to be able to track this usage for accuracy
4)  A quick and effective method of re-ordering or restocking your inventory.

While it is quite possible to list and track all of this information manually, it is far more efficient and effective if an electronic inventory management system is put into use.

The Importance of IT in Inventory Management

Information Technology has come a long way in a very short length of time. Some of the programs available today to help restaurant owners in assessing, organizing, prioritizing, tracking and reordering their inventory make the old ways of inventory management look torturous by comparison.

Modern IT inventory management software systems can ensure that a restaurant’s inventory is managed as effectively as possible, resulting in significant financial savings.

What Streamlined Inventory Management Means to You

The more efficient your overall inventory system is the smoother your food production process will be; the more customers you will be able to serve in the same period of time, and the quicker you will be able to replace the supplies used so that more food can be prepared and more customers served. 

The end result, of course, is that by the most effective use of your restaurant’s inventory management, the higher your restaurant profitability will be, and in this economy, that is definitely something to cheer about.

For info on Ideal Software’s Inventory Control system IdealStockControl

Ian Said, founder of Ideal Software, a software company specializing in Point of Sale and Inventory Control designed exclusively for the hospitality industry. Follow him on Twitter @costofsale

Inventory for Controlling Restaurant Food Cost

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