7 Best Practices on How to Manage Your Inventory and Orders

Restaurants keep many different ingredients on hand to create their dishes. Some ingredients have a long shelf life, others go bad in a matter of days. According to FoodPrint, about 10% of those ingredients end up going to waste.

While you’ll never be able to completely end food waste at your business, running inventory control will help maximize your inventory use and pinpoint where losses come from.

A restaurant’s inventory can be considered to be every product you own in or for the restaurant. So this includes:

  • All products, food ingredients, including liquors (also known as raw material inventory)
  • Straws, plasticware, and other service items that are given to customers with their purchases
  • Any merchandise you sell like t-shirts
  • Pots, pans, and other cookware
  • Reusable dishes, glasses, and silverware
  • Linens

Of the above, the products that are sold to customers and/or are not able to be re-used are the inventory that requires the most work, since they’re constantly turning over.

The importance of streamlining food inventory

Taking food inventory has historically been done manually. The restaurant runs a count of their stock at least once a month and records the results on a spreadsheet or paper. They then order new products based on those numbers and what they expect to sell in the upcoming time period.

As you can imagine, this method is pretty faulty. For one, no one ever knows how much stock you actually have on hand throughout the entire time-period between counts. An item or category could sell out much quicker than expected without being noticed.

The best method of material inventory management, then, is to use an inventory management software system built for restaurants. A good software system will be able to give your kitchen manager a firm grasp on:

  • What inventory you currently have on hand and the cost
  • How much of that inventory is used every day
  • What inventory has already been ordered

Ultimately, the system will be able to help you pinpoint loss from spills, mistakes, etc., and even accurately predict upcoming sales trends. Additionally, digital inventory tracking allows restaurants with multiple locations to track stock across locations easily. Multi-location inventory management is quite difficult to track manually.

Beyond simply managing your inventory digitally there are many best practices that restaurateurs have developed to reduce food waste, order new stock, and manage their inventory.

1. Organize your storage.

The first rule of managing any kind of inventory for a business is to organize it. Clear organization allows your employees to complete their tasks faster (they don’t have to spend 10 minutes hunting an item down).

In general, you should place frequently used items in the most accessible locations of the fridge and pantry, such as the front of a mid-level shelf. You can use tags on the shelves to help tell employees where everything goes. (Shelf tag bonus: you can also use them to track how much longer an ingredient’s shelf life will last.)

And of course, make sure that newer items go to the back of their shelves so that chefs are using up the older items before they expire.

2. Designate and train a team of stock takers.

Too many cooks in the kitchen are bad for your business and inventory management. It’s best to run your inventory management methods with a few well-trained staff rather than having everyone contribute.

With a specialized team of users, you can be sure your methods are being adhered to. They’ll also be able to get to know the inventory over time and provide helpful gut checks in addition to the software’s insights.

3. Use an inventory system that works offline.

It’s not uncommon to not have access to Wi-Fi in every area you store inventory in. For instance, walk-in freezers and cellars tend to be dead zones. Because of this, offline inventory management features are crucial.

WISK’s offline system, for instance, works whether or not you’re connected to the internet. It can run counts and scan your entire inventory offline. And even better, once you have WIFI again, WISK automatically uploads all the work you’ve just done. No need to remember to submit anything.

4. Use pars.

Par is a word used in inventory management to designate a chosen level that stock gets reordered at. At a restaurant, you’ll be reordering certain staple ingredients often, like salt. By setting a par, you make it easy to know when an order needs to be placed.

A good formula to figure out what inventory levels will work as pars:

Par = (Weekly Ingredient Use + Cushion Stock)/Deliveries Per Week

If you don’t do weekly deliveries, you can choose another time period. Your cushion stock is the amount of stock you want to have left when you hit par. When it comes to choosing your cushion stock amount, you’ll need to consider:

  • Possible shipping delays. You may want a larger cushion in the winter when snow storms are common, for instance.
  • The ingredient’s shelf life.
  • Typical customer demand.

Some inventory tracking software, like WISK, can track when an item reaches its par and automatically reorder for you. When using a par in combination with such a system, you can nearly eliminate stock-outs on your key ingredients.

5. Assign a quality control employee.

In addition to inventory admins, you should also train one or two employees to check orders when they arrive. They can ascertain whether the items are of good quality and the correct quantity.

These employees will make sure that the inventory you’re taking in is in good shape so you know for sure that any damage or loss that occurs to it happened in your restaurant. They can also update product listings in your inventory management app and even add product images so your inventory takers can take inventory efficiently.

6. Count the inventory often.

In order to keep your inventory system as up-to-date as possible, it’s a good idea to run a full count of your inventory at least once a month. You may consider cycle counting throughout the month as well.

Cycle counting means that you do partial counts of over time. For instance, every Monday you count produce, every Tuesday you count dry goods, Wednesday is liquor and alcohol, Thursday canned goods, etc. By the end of a certain period of time, you’ve performed a full count and can start over again. Cycle counts keep your inventory counts up-to-date, but consume less time than counting all your inventory as frequently.

It’s a good idea to run your counts at the same time of day on the same day each week. It makes it easier to watch the flow of goods as you can accurately compare usage by time period.

7. Use the FIFO method for inventory costing.

There are quite a few ways to track the value of your current inventory — a key part of determining your profits.

For restaurants, the best method is considered to be the FIFO method. FIFO stands for first-in, first-out. In this method, it is assumed the items you buy first will also be the first sold. That means, if you purchase Apple 1 on Monday and Apple 2 on Tuesday, you’ll give Apple 1 to the first person who orders an apple. Because restaurant inventory has a shelf life, FIFO intuitively fits the kitchen.

FIFO makes it easy for you to know the exact value your inventory is currently at, as well as the food costs for each order. With that information, you can easily keep track of your profits.

FIFO can seem complicated, but WISK makes it easy to track the cost of your inventory, even as items change price over the course of the year.

Practice your best inventory control with WISK

The best inventory practices need the best tools to support them. WISK Food enables your employees to scan products from a mobile device, both on and offline, for your fastest count yet. Plus, WISK’s inventory counts are accurate, so you’ll always have a good idea of how much stock you actually have.

Try WISK free today to see how much food waste your restaurant can prevent.