How A Smart Restaurant Inventory Management System Helps You Reduce Your Costs

Restaurant inventory management system for reducing labor cost

Two major expenses that restaurants in the US strives hard to counter are the labor and the food cost. And this has propelled most of the restaurants in the USA to leverage on cloud technology that will reduce their dependency on the manual labor while ensuring that unnecessary kitchen waste generation is kept at the bay. With inventory being one of the major sections of the restaurant management, it is highly recommended that restaurants start automating their inventory management that will not only help them reduce their labor cost, but will also increase the operational efficiency that will, in turn, bolster your profits exponentially.

A 2016 Restaurant Trade Survey from American Express, found that 63% of restaurant owners would invest in technology if it made day-to-day operations more efficient. And hence, restaurateurs are increasingly leveraging on technology to help them control their expenses.  With an inventory management system that runs on the cloud, you will be able to reduce both these costs marginally. While the complete automation will reduce your dependency on manual labor, the set standard processes will help you keep the unnecessary generation of kitchen waste at the bar. In this article, we will provide you with comprehensive knowledge on how you can reduce your costs by using a cloud inventory management system.

Ways A Smart Inventory Management System Will Reduce Your Labor Cost

In the US the employee attrition rate is notoriously high, it is estimated that the labor turnover rate in the States is almost 70%. In addition to this, a study from Cornell’s School of Hotel Administration claims that the cost of losing and replacing one hourly employee can be as high as $5,864. Considering that labor cost is exponentially high in the US F&B space, it is imperative for restaurants to look for a viable alternative that will help them manage the restaurant inventory with minimum labor involved. Here comes the importance of having a restaurant inventory management system that will reduce your restaurant labor cost exponentially.

1. Real-Time Inventory Tracking

Checking and monitoring inventory diligently is a labor-intensive task. However, leveraging on an inventory management system will help you streamline this operation immensely. The ways it will optimize the inventory operations in your restaurant are:

  • Will enable you to track the currently available stock at your outlets.
  • The system will be empowered to send you in details of the beginning and the closing inventory on a daily basis.
  • You will receive the variance report, it is essentially the difference between the ideal stock that should be consumed during a day and the actual physical stock that remains at the end of the day.
  • The detailed inventory reports about the stock consumption in the outlets will help you track misappropriations and make data-driven decisions.
  • Since all the information will be on the cloud, it will be highly secured and you will have access to them remotely.

2. Base Kitchen Management

When running an enterprise or a restaurant chain, it becomes imperative that you establish a base kitchen. All the raw materials will be semi-processed in the base or the central kitchen and will then be distributed to the various outlets as per the indents raised. As the process is a long one, it becomes very labor intensive. However, trying to manage the entire process manually involves a lot of manual mistakes and hence operational efficiency may be compromised with. Hence, it is recommended that you get an inventory management system with a central kitchen management feature that will help you streamline its operations.

  • It will help you view the stock requirements of each outlet right at the central POS.
  • Create purchase orders for each outlet and manage the circulation of the stock.
  • Keep track of the stock consumption across outlets through in-depth reporting.

Ways A Stellar Restaurant Inventory System Will Help In Reducing Food Cost

Food costs are soaring in the US restaurant market. This makes it important for you to curb the generation of kitchen waste marginally. By using an inventory management system you can do so in the most stellar way possible.

1. Recipe Management Feature

Recipe management feature will help you set standard processes for all the recipes, and this will help you control the generation of unnecessary kitchen waste. The ways in which an inventory management system will help you manage your recipes are:

  • This will come in handy especially when you are running restaurant chains. It will enable you to update the recipes across all your outlets instantly with a few clicks. This will ensure that the same level of consistency and quality is maintained across all the brand outlets.
  • It will automatically deduct the amount of stock consumed based on each order.
  • You can alter the main recipe and the portions required for item preparation, and this will keep your food cost in check.

2. Raw Material Management

An inventory management system will help you manage the raw materials in the inventory. It will automatically update the stock requirements and inform you in real-time, this will save your restaurant from ordering items which are already available in the stock. The ways raw material management in an inventory management system will streamline your inventory operations are – 

  • Set re-order levels for each item in the inventory. You can set alerts that remind you to order for more when the item in the stock reaches its re-order level.
  • Manage the shelf life of the items, especially for the perishables ones. Get notifications when the items reach their expiry date.

The new age, cloud-based inventory management system will help you automate your entire inventory operation and help you have tight control of your restaurant operations remotely. Such instances will reduce two of your major expenses in the US market, the labor and food costs.

Once your expenses are reduced, it will automatically increase your overall profit garnered. So, what are you waiting for, get on board a stellar inventory management system if you have not considered it already?

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Nikunj is the Communications Lead at Restroworks, a global leader in cloud-based technology platforms. In his role, he oversees global marketing and branding initiatives for Restroworks across APAC, the Middle East, and the US.


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