10 Tips for Optimizing Your Restaurant’s Inventory and Purchasing

Why Inventory & Purchasing Management is Vital for Your Restaurant

When running a restaurant, your primary focus is usually on menu planning and customer service. That being said, there’s one aspect of managing your business that’s just as important: Inventory control.

How effectively you manage your restaurant’s inventory and purchasing can significantly impact your restaurant profits. With the average food cost falling between 28% and 32% of total sales, it makes sense to keep an eye on what you’re spending and where you’re spending your money.

Having control over your inventory and purchasing allows you to keep your expenses in check, while still getting quality products.

How to Optimize Your Restaurant Inventory & Purchasing

Optimizing your restaurant’s inventory means finding ways to minimize inventory loss and food costs while streamlining daily operations. Even a minor mistake in inventory management, such as overstocking perishable ingredients, can cost you thousands of pesos.

Once you’ve optimized your inventory, you’ll receive a variety of benefits, including:

  • Being able to track your resources
  • Improved control and organization of stock
  • Boosted sales and profits
  • Lower labor costs

Use these 10 cost-effective tips to get started: 

  1. Standardizing Recipes 

Having standardized recipes means that there’s a clear and exact quantity of each ingredient for each menu item. This standardization allows you to have a fixed price point for every ingredient, and guarantees your customers the same food quality and quantity every time.

Standardization also helps in achieving effective inventory control because you know exactly what and how much goes into a recipe. In effect, you can order the amount of onions or tomatoes from your suppliers with minimized excess inventory.

  1. Using Surplus Food and Ingredients

In instances where you find your kitchen has excess ingredients in danger of spoiling, consider offering limited menu items.

For example, you ordered two boxes of crab paste for your aligue pasta. However, for the weeks following the restock, fewer people are eating aligue pasta. So, you’re left with a box of unused crab paste. To prevent wasting good crab paste, you can work with your chef to offer a special aligue fried rice until stock lasts.

Regulars can then try something new and you won’t waste your ingredients.

  1. Adjusting Your Product Mix

A product mix provides insight into effectively managing your food costs which change daily, weekly, and monthly. In addition, the daily product mix shines a light on crucial metrics, including the number of prep ingredients used each day and menu item performance by week.

One way to identify and stop food waste is by checking the variance between actual prep usage versus theoretical. This exercise should be performed daily by someone who has an intimate working knowledge of ingredients, recipes, and station schematics—like a kitchen supervisor or manager.

For example, by looking at the product mix report for the past four Saturdays, you might observe that you sell 60% fewer Baby Back Ribs orders on Fridays. With this data, you can now optimize the products you need every Saturday while reducing waste and improving the freshness of your food.

  1. Tracking Your Inventory Regularly

It’s essential to regularly track your inventory to ensure that all stock, including sitting inventory, is accounted for. You have to organize and track all your ingredients at the beginning, and each day—but that can get tiresome. Thankfully, it can be more easily managed with inventory management software. We recommend investing in one if you haven’t already.

By tracking your inventory regularly, you’ll have the capacity to prevent yourself from having excess stock. Also, it helps reduce situations of understocking. Don’t disappoint your customers just because you ran out  of certain ingredients.

  1. Integrating a POS System

Lastly, with the widespread availability of restaurant technology these days, there’s no reason why you should stick with pen and paper inventory tracking. Using a good POS system helps lower human errors and gives you more visibility on your daily operations and sales performance.

A good restaurant POS system can even help you audit your inventory with ease and control your stock. With this, you can better picture what you have to purchase and what to order less.

  1. Planning Your Menu

Without a planned and detailed menu, you won’t know what ingredients you needt. Your menu directly affects your purchasing, so planning helps you purchase more efficiently.

If you’re opening a steakhouse, then you’d want to know which kind of meat you want to serve. Imagine that your menu consists of BBQ Pork Ribs, New York Strip Steak, and T-Bone. With these items in place, you can start planning which raw ingredients and sauces you have to purchase. Through this, you’ll know which supplier you have to look for.

  1. Choosing the Right Vendors and Suppliers 

Choosing a supplier for your restaurant is important to keep things running smoothly. The success of your restaurant highly depends on your vendors and suppliers as they determine the quality and freshness of your ingredients. If the ingredients are low quality, you can’t produce the best dishes.

Start by looking for local suppliers to ensure that ingredients reach your kitchen quicker when you need them. But, beyond fast delivery, you have to consider their ingredient quality and reliability. You don’t want to lose profits and even reputation due to a low-quality meal caused by low-quality ingredients.

  1. Prioritizing Quality Over Quantity

When running a restaurant, a good rule of thumb is  to practice quality over quantity. Purchasing more food than needed means excess inventory and money going to waste. So, opting to purchase higher quality ingredients over cheaper ones will benefit you in the long run.

Let’s say you’re serving an English Breakfast special. One essential item here is bacon. Buying the best-quality bacon is better than buying a lot of cheap bacon. This is because cheaper bacon usually has higher water content, so you’re mostly paying for water weight. To ensure a flavorful plate, see to it that you are purchasing higher quality ingredients still within your budget.

  1. Streamlining Your Operations

After listing down all the ingredients you need and finding suppliers who can meet your demand, it’s time to streamline your operations. With streamlined processes in place, it’ll be easier to restock, coordinate delivery times, and avoid any supply chain or inventory control errors.

A POS system can make streamlining even easier and more efficient with real-time inventory management. Having reliable restaurant software that can track and automate purchasing can help you significantly. This way, you are sure that you procure what you need and restock only when stock levels dip. It also ensures that there’s only a short lag between running out of ingredients and an automated purchase order.

  1. Making a Contingency Plan 

Above all, you have to keep in mind that there will be situations where your suppliers cannot deliver what you need. When this happens, a contingency plan assures you that you do not have to cross out items on your menu during serviceーor temporarily close down your restaurant.

You need to have another list of reliable suppliers for essential ingredients and supplies in your contingency plan. Alternative suppliers can be local farms, food warehouses, or grocery stores. But, if contacting suppliers is not feasible because you need to serve dishes the same day, you can also try listing alternative ingredients to your food items.

Optimize Your Inventory and Purchasing to Increase Profits

In the restaurant industry, the margins for profit can be slim. So, one of the best ways to boost profits is by lowering your food costs. A way to achieve this is to optimize your restaurant’s inventory and purchasing. That will help you ensure you have enough stock at all times. Plus, you can strategically purchase ingredients to make the most out of your finances. 

Optimizing your inventory and purchasing is easier now with restaurant software, like Mosaic Solutions. With Mosaic, you have the power to improve your operations in one platform, through powerful features like:  

  • Accurate cost and profit tracking for a better view of your finances
  • Budget tracking and in-depth analytics
  • POS system with real-time reporting and analytics of customer spending trends
  • Data-driven sales forecasting and inventory procurement

These solutions empower you to improve the profitability of your restaurant, and continuously work towards more efficient inventory operations.

Boost your sales and profit today with Mosaic Solutions! Contact us to help improve your restaurant operations.