Bar & Restaurant Management Blog

4 Reasons Why Restaurant Inventory Management Matters

Written by Krista Dinsmore | April 06, 2021

Running a restaurant is a dream for many people. The truth is, however, that running a successful restaurant isn’t just about crafting amazing meals. It takes a remarkable amount of work and an extensive amount of business acumen to run a successful restaurant.

Cooking meals that delight guests is just one part of the puzzle. Restaurant finances are the second part of that puzzle, with restaurant inventory management one of the most important factors in whether your restaurant is a success or not. 

Inventory management is the process of monitoring your restaurant’s food and beverage ingredients, giving you insightful data that makes your restaurant more profitable. Successful restaurant inventory management can lead to smarter ordering processes, reduced costs, less waste, more strategic menu pricing, higher profits and much more!

Here are four key reasons why your restaurant should focus on food and beverage inventory management as a priority: 

#1 - Optimize your ordering 

Restaurant inventory management gives your business the data it needs to optimize your ordering processes, and control food costs. When you reduce your business costs, you can improve your company’s cash flow and drive up profits. 

By using inventory management to forecast exactly what your restaurant needs to meet demand, you can optimize your ordering so that you aren’t ordering too much - which results in unnecessary food waste. 

Inventory management in your restaurant will help you find your period automatic replacement (PAR) level, the optimal level of any given inventory item that you should have on-hand in your restaurant at all times. This also helps you maintain a positive cash flow, ensuring you don’t have too much money tied up in stock.

#2 - Drive up profit margins

Successful inventory management is crucial for restaurants because profit margins are typically very slender in the food industry. After you account for the ingredients, the venue, the staff and all of your business’s daily operations, there may only be a small profit on each menu item.

This means that one small miss-calculation in your pricing, or a hiccup in your inventory counting, could seriously impact how much profit your restaurant brings in. Proper restaurant inventory management will ensure your business is getting the correct profit from each dish.

#3 - Reduce beverage and food waste

Restaurants are unpredictable, and without proper inventory management procedures products can easily become unaccounted for. In fact, shrinkage caused by theft, product spoilage, breakage, spillage or human error is a common issue for most restaurants, and without proper inventory management you won’t even have the visibility to see that it’s happening. 

Through strategic inventory management processes, your restaurant will be able to identify areas of the business that are experiencing shrinkage. By consistently checking inventory data, you can pinpoint exactly where you have lost stock and use that data to better educate your employees on how to reduce wastage. 

#4 - Improve customer satisfaction

When customers visit your restaurant, they expect to be able to order their favourite dish. If you can’t deliver that due to a product shortage, it has a serious impact on not only customer satisfaction, but also customer loyalty as well.

Your ability to meet customer expectations, revenue targets and profit goals is directly influenced by your ability to successfully manage your restaurant inventory. Maintaining the right stock levels means you can always fill orders, and always delight customers.

Automate your inventory management with an inventory management system  

Investing in a digital restaurant inventory management solution is a way for your business to automate and manage its inventory processes in one centralized and easy-to-use platform.

This can help you not only streamline all processes associated with inventory management, but also gain complete control and visibility into your current inventory. Through insightful and actionable data, you can make strategic decisions that directly impact the profitability of your restaurant.

Want to learn more? Contact Sculpture Hospitality today. Our team of restaurant inventory management experts would love to answer any questions that you may have about successful inventory management.