As a restaurateur, one of the essential components of managing your food cost is managing your inventory process –  from actual counting to verifying the variances at the end of each business day.

It is a tedious process since most of your items are highly perishable, with a shelf life that can be as short as just a day. If you fail to use these products within the time frame, then off to the garbage bins they go, which equates to your profit, going down the drain. 

In this article from Restaurant Business Online, managing inventory has upped its level from the old school pen and paper documentation to digitalisation and automation. And this game-changing move not only can provide ease for your staff but in doing so, has the potential to improve guest satisfaction. When you automate your operations, you save time, maximise labour output, boost productivity and of course — start to turn food waste around.

If you are still building up to automating your systems in the future, you can always fine-tune your current inventory process so you can manage your expenses efficiently:

  1. Do stock forecasting to determine the minimum or maximum stock quantity

Stock forecasting is necessary to avoid having too much food or beverage inventory at hand since you have a risk of getting them wasted. Likewise, it gives you the upper hand in determining if you have little or no available items to serve your diners. 

The first step is to review your sales history. Study your business trends and sales patterns to determine which item moves or sells out every time and which doesn’t. 

If you realise that you have too much of the items that are not moving or vice versa, you can remedy this by applying measures to correct the quantity. This eliminates potential food waste and the likely need to mark down the price of the menu just to avoid spoilage or waste. At the same time, if an item is unavailable or if the quantity is not enough (such as ingredients in your popular dish) you can miss out on sales!

RELATED READ ON FORECASTING: The Key to Transition Food Production From Busy to Slow Periods

  1. Train your staff in doing the right Inventory Management procedure

I placed this here as an umbrella category because if you have not gone digital or have not yet automated your systems, you are at the mercy of your staff to implement these procedures.  No matter how detailed your procedures are, if your staff is not confident in accomplishing them, things will be for naught. To solidify the training and the learnings, you have to have periodic reviews and appraisals. If your staff is underperforming, sometimes, the issue is not about the information absorption or practical skill. It could be that the issues involve emotional and mental health. Are they stepping in for work in a pleasant disposition or are they distracted? Unhappy? Overworked? 

RELATED READ ON MENTAL HEALTH: Why Chefs Should Speak Up About Their Mental Health

Designate two trained staff to do the counting. This reduces the chances for error and also the risk of theft and pilferage. Some restaurants have separate teams that tally the ideal stock with your total available stock as a counterchecking procedure. 

With regards to staff training, what are the things that you need to focus on?

  • Attentiveness when receiving deliveries. 

If there is an error during receiving of deliveries, you can consider the whole inventory process as broken from the get-go. Be sure your designated staff is accurately counting incoming deliveries. More than that, your staff should also be able to determine any items that are damaged, which should be reported immediately to your acting kitchen supervisor or head chef for action.

  • Proper taking of inventory 

Ensure that you have a well-trained staff who understands the various inventory categories and terminologies, etc. As for actual taking of inventory, a right way is to count using the Shelf to Sheet method. The staff counts the items in the actual shelves or containers, and after that lists them down to the appropriate section in the inventory sheet. This method removes the chances that they overlook a tangible item on hand, which can happen if the staff solely uses the printed list to do the checks. If the printed list is not updated, and everyone relies entirely on this list, items physically in your store may be missed, risking spoilage and thus wastage. If your staff gets confused, remind them that what’s important is the actual item that you have at hand and the list is just used as a guide or as placement of information. 

Your staff then moves along counting every single item on each shelf in a systematic method that you determine, whether it’s top to bottom, left to right, etc. If an item is physically found during counting but is not on the list, the staff should write it down as a remark on the inventory sheet. This item can possibly be new items that have not been added yet to the official inventory list. This could also be a particular item or ingredient that is no longer used in the kitchen operation, for example, an ingredient for a dish special that is no longer served. If perishable, it should be disposed of, or if non-perishable, should be appropriately labelled and recorded.

  • Transfers-in or Transfers-out should be included in the counting. Transfers- in are items that are brought in as purchased. They can also be items that are moved in from a similar venue which uses the same product. Items that are moved out are considered as transfers out.
  • Ensure proper identification and labelling of items. This practice reduces the chances of confusion which can affect the accuracy of counting. If a wrongly labelled item is found, it should be immediately corrected and entered into your information system.
  1. Organise your stocks efficiently to make taking inventory easy

There are various organising styles that kitchen managers use in their walk-ins, but what’s important is that you do what will work best for the shape and size of your kitchen. 

Here are just some reminders:

  • Always use the food that you bought in first.
  • If you opened containers or cans, add labels to mark the dates when they were opened. Refer to this date to determine which items to use first. Some Chefs create specials based on ingredients that are close to the throwout date so that there is nothing wasted. But always keep in mind that above all else, food safety should be followed.

RELATED READ: How To Do Effective Waste Management To Help Your Business

  1. Streamline or automate your daily operational procedures

There is a rise in the number of restaurants that use an inventory management solution to simplify the tedious daily task of doing inventory. There are many benefits of having automated systems which include up to the minute count of a particular ingredient based on your sales, so you have an idea of what urgently needs to be restocked. 

  1. Track your Reports

Ensure that the Inventory Reports are updated after each Purchase Order or transfers. When you are diligent in monitoring your reports, there is a greater chance that you can keep your Variance to a minimum. Variance is the difference between your forecasted stock and the actual stock you have. An acceptable variation is around 3-5% since food handling is bound to cause some amount of food wastage. Do your best to determine the reason for any high variances so that you can immediately do corrective measures. 

In Summary:

Accurate inventory reduces waste of all kinds – money, time, and energy. 

Most importantly, it increases customer satisfaction because you have what you need to create the dishes that they came for. 

That’s it for this week.

As always, Professional Chefs on Call at Anytime!

Ciao for now,


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