Business May 2, 2019 Last updated May 1st, 2019 56 Reads share

The Surprising Ways Inventory Management Can Affect Customers’ Dining Experiences

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Besides dishwashing, inventory management might be the most loathed task in the restaurant business. It’s such a pain that many restaurant owners just avoid it — but let’s face it: That approach is asking for trouble.

No matter how long you’ve been in the industry, it’s hard to keep track of inventory. Either you run out of ingredients to make your customers’ favorite dishes, you order too much food and the waste cuts into profit margins, or you face the tricky scenario of product (and profit) loss from unethical employees.

Nobody likes to run out of supplies (and risk upsetting your regulars when their favorite meals are out of stock), so most restaurant owners opt to order excess food. Waste from restaurants in the U.S. approaches 43 billion pounds each year, according to the Natural Resources Defense Council, and the National Restaurant Association reports that less than half (47%) of restaurants even bother to track waste. It’s no wonder they struggle with lost revenue and higher costs, not to mention a larger environmental footprint.

To keep track of how much inventory they need, some restaurant managers will try to keep a mental log. Once they realize that isn’t cutting it (because even those with the best memories can’t accurately keep track of thousands of ingredients in their head), they often turn to spreadsheets. That may seem like a good idea on the surface, but manually entering information into rows and rows of cells is tedious and time-consuming, and mistakes are inevitable.

Furthermore, even with a perfect spreadsheet, spotting use patterns and creating forecasts is still a tall order, so you may still be ordering more than you need or risking running out of ingredients. Not to mention, when you’re running a busy restaurant, there are better ways to spend your time than spending hours updating spreadsheets every day.

Three-quarters of restaurants say they struggle to increase their profit margins because of rising food costs, yet only 25% invest in taking inventory on a regular basis. Maintaining optimum inventory levels keeps your food fresh, your money in the bank, and your customers happy. Here are a few ways to ace inventory management:

1. Lean on local farmers and suppliers.

When you have a good relationship with local food providers, your restaurant reaps the benefits. For one, you have the flexibility to make quick adjustments or alterations on a dime. Need extra produce? It’s only a few miles away. Need to make a slight change to yesterday’s order? No problem.

Customers are also demonstrating a clear preference for local businesses, and research firm Packaged Facts predicts that local food sales will reach $20 billion in 2019. According to LocalHarvest.org, fruit and vegetables travel an average of 1,500 miles before reaching a destination, meaning they must be engineered and treated to maintain their appearance over the journey.

Local food requires no such alteration. As a result, the food you serve is fresher, tastes and looks better, and keeps customers happier and coming back regularly.

Also, some restaurants order in bulk to earn a discount, but that food ends up sitting on the shelf for months — and often just gets thrown out. When you order from local farmers, you may not get a discount for buying large quantities, but you’ll still save money by not having to throw out as much inventory. Plus if you need more food at a moment’s notice, you can get it in hours or days rather than weeks.

2. Take the Goldilocks approach — only order what you need.

When you order the exact amount of food you need (or at least as close to that amount as possible), customers get fresher food. Ordering too little means you won’t have the items you need on hand while ordering too much means items sit on shelves because they aren’t needed.

Even if you get around to using ingredients before they have to be thrown away, you’re still serving customers less-than-fresh ingredients, which can lead to a dish that isn’t as good as they remembered it being.

In addition to the unbeatable flavor of fresh food, fresh ingredients also look more appealing. In some cases, like stews or other slow-cooker recipes, it might be impossible to tell how old ingredients are. But a salad made with fresh ingredients is easily distinguishable from one with foods used at the last minute before they went bad.

This approach also keeps more cash on hand in the restaurant instead of having revenue tied up in products that aren’t moving off the shelf fast enough.

3. Take advantage of automated inventory management.

Reduced waste means reduced expenses, and that money can be reinvested into the business in the form of higher-quality food. The best way to ensure you have exactly as much inventory as you need is to use automated inventory.

With automated inventory, the system knows how much of each ingredient you’ve used, and it can order the exact amount you need when you run low. That way, you won’t run out of food during the dinner rush, but you also won’t be stuck with leftover ingredients you’ll end up throwing out (or serving customers not-so-fresh food). Plus, accurate inventory numbers are essential for a restaurant to calculate its food cost percentage.

One-click ordering also makes it easy to track when inventory levels are running low, allowing you to reorder quickly and easily — without the use of confusing spreadsheets and paper invoices. This not only saves you money by ensuring you have the exact inventory you need, but it also saves time so you can focus your efforts on more pressing tasks.

Taking inventory is vital in any business, but it’s especially important in the restaurant industry. So ditch the mental log and implement a real inventory tracking solution. By eliminating waste, increasing profits, and delivering a menu full of fresh foods to your customers, you can take any restaurant from good to great.

Inventory Management Dining

Seth Steinman

Seth Steinman

Seth Steinman is the SEO manager at Upserve, an organization that helps independent full-service restaurants run and manage their entire business through a restaurant management platform. Seth savors summer sours while sunning by the salty sea. When he's not writing an alliteration, you can find him practicing meditation or sipping his favorite libation.

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