Restaurant inventory management

1. Restaurant inventory management
Inventory management is a necessity in every business, but more and more restaurants
are realizing that it can be the difference between success and failure.
Inventory management is the process of controlling costs and waste through effective use
of on-hand product. Combine this with a reliable forecasting model and restaurants can
realize dramatic reductions in their monthly spending.
Every business is faced with the unfortunate reality that employees will steal from their
employer. An effective inventory management system combined with secure storage and
lock-up procedures will result in far less loss due to employee theft.
In the restaurant industry there are primarily three types of inventory management
systems: Manual or Limited Integration, Mixed P.O.S. or Partial Integration and Fully-
Integrated.
Manual or Limited Integration
Manual inventory management refers to the process of physically counting each item
every week to obtain restaurant costs. This system is more suited to smaller,
independently-owned operators who purchase fewer items and maintain simpler
accounting records.
Once all counting is completed, then data can then be transferred to the restaurant's
accounting system. If there are no errors, the inventory is complete. If there are errors
however, the entire inventory process must start again to find the mistakes.
Mixed P.O.S.
Mixed Point of Sale (POS) or partial integration, combines the restaurant's POS system
with manual inventory procedures. Point of sale refers to the computer system used to
order food and drinks as well as settling all checks.
Each time an item is ordered through the POS it is removed from the current inventory.
When the items are counted during inventory, the on-hand stock should match the
inventory listed by the POS. If however, there are discrepancies between the two lists,
another physical count of the inventory must begin.
This method of inventory management is more effective than the limited system, and
when combined with strong loss-prevention procedures can result in large cost reductions
per month.

2. Fully-Integrated
A fully-integrated inventory management system implements three different elements
into its system. It combines the restaurant POS system with an Ordering/Shipping system
as well as an electronic physical inventory system. This is the most sophisticated and
accurate of the three systems and results in the least amount of monthly and overall loss
of product and profits.
Some restaurant suppliers will provide their more important restaurants with an online
ordering system. This system is integrated with the restaurant's POS and can accurately
predict what is in on-hand inventory, as well as forecasting the size of the next supply
order.
Once per week or even per month there is a physical inventory done with portable,
electronic bar-code readers and electronic scales. All data is automatically sent to both
the supplier and the restaurant.
Some are so sophisticated that they incorporate the recipe breakdowns, by ingredient and
then calculate the inventory. This type of system will save you money in the long run but
also help you run a more streamlined and efficient restaurant business.
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