Restaurant Inventory Management Best Practices

How to Improve The Least Glamorous Aspect of Your Business
Management Tips May 31, 2022

One of the least glamorous but most important parts of running a restaurant is inventory management. It’s a job that’s usually low on restaurateurs' priority list and many just flat out dread it…

However, in an industry as fast-paced and constantly changing as the food industry, organization is one of the most valuable skills for someone working in a restaurant.

Ensuring proper inventory management is a surefire way to reduce stress, cut down on mistakes, and save time in the long run.

In this post, we’ll discuss the ins and outs of restaurant inventory management – including what it is and how restaurants can improve their stock management process.

What is restaurant inventory management?

Before we can offer top tips and best practices for inventory management, we must first be on the same page about what it is.

Restaurant inventory management is the process of tracking all the ingredients coming in and out of your restaurant to avoid spoilage and unnecessary losses. It traces a number of different key metrics – including the amount of products that are ordered, how much is actually consumed at the kitchen/bar, and what is left over as “sitting inventory” afterward.

As you can probably tell, stock management is a time-consuming, detailed process with little room for error. However, mastering inventory management will result in a more efficiently run restaurant, which translates to higher revenue and lower costs over time.

How can restaurants improve their inventory management?

Now that we’ve established the definition of inventory management, let’s discuss how restaurants can improve their system.

In this section, we’ll discuss the 5 best inventory management practices.

1. Determine a timeline to track all inventory

Make sure to track every item that your restaurant uses – from food and drink to uniforms and silverware. Committing to a full management system means that there will be no confusion from employees about what to track. From there, you can determine an inventory management schedule. The schedule will vary depending on the item. For example, certain perishables might require tracking every week, whereas something like employee uniforms might only be tracked annually.

2. Employee Accountability

To maximize efficiency, a best practice is to assign 2 employees to lead the entire inventory management process. As they become more familiar with the tracking process, they’ll be able to move more quickly. The benefit of having 2 employees lead the process instead of 1 is that each employee is able to double-check each other’s work. Mistakes are easy to make in a process as detail-oriented as inventory management, so you want to do your best to minimize them through accountability.

3. Create a food waste sheet

This can be done manually or digitally, depending on your preferences – although digital stock management generally produces fewer mistakes. Monitoring your food waste will help you locate ways to minimize those losses, saving you money and time.

4. Monitor the sell-through rate

Your “sell-through” rate is how often you sell a certain item during a particular period. For example, if you run a NYC steakhouse, order 200 steaks in a week, and sell 80 them, you have a sell-through rate of 40%. Tracking your sales for all inventory using this metric will help you better determine the necessary supply to avoid spoilage and waste.

5. Use technology

Investing in a digital POS or inventory management software will help you forecast demand based on factors like seasonality.

The ultimate goal of inventory management is to make your restaurant more efficient by minimizing spoilage/loss. This translates to higher revenue and lower costs, raising your profit margins in the process. Using the above practices will make your inventory management process (and restaurant as a whole) significantly more efficient.