Here’s the truth laid bare, free of polite underselling or writerly flourishes–taking inventory sucks. Though inventory best practices tell us that operators should aim to accomplish this dreaded task at least once a week, many report doing so as infrequently as one or two times a year. And next up on our tour of great expanses, to the right of the Grand Canyon, you’ll see the gap between should do and do.
Here’s another truth while we’re being honest:
Operators don’t have an infinite number of hours. And there are ways to simplify their lives.
Taking a Physical Inventory = A Great Start
First, a reminder of why this task is necessary.
The average food cost of a restaurant is 28%-35%. Though counting cans of beans and bags of rice may not seem like a money-making effort, inventory management ensures a major investment is being used wisely. Poor inventory management immediately translates to food waste, unnoticed theft, and an unorganized workplace. Over time, procurement might suffer, with too little or too much new product ordered. Best case scenario, increased waste. Worst case, hungry customers are excited for your signature dish and turned away.
There are also losses in opportunity cost–to keep a finger on the pulse of what is selling well and what isn’t and how recipes shift from inventory to plate. With so much in the air, information is power that divides those who succeed and those who do not.
Automation via Technology = A Great Next Step
Gone are the days of physically tallying every total and entering sums into manual spreadsheets. Or, at least, gone are those days for operators who have embraced automation. Not only does automation save time (Craftable cuts our customers’ inventory time in half!) but it also improves communication between purchasing, producing, and selling.
According to Square, 91% of restaurants say that automation with inventory/ item availability would help fill critical business gaps. This is certainly true for Craftable customers, who are able to:
- Optimize Operations
- Reduce Labor Hours
- Gain Transparency Into True Operating Costs
Regardless of use of automation, these inventory management best practices can ease the burden of the dreaded count.
Building Best Practices = A Way To Ensure Profitability
#1: Take Inventory Consistently
The experts advise 1-2 times per week, some enforce a daily inventory that employees despise, while others take inventory only often enough to find forgotten rot and dust. Wherever you fall on the spectrum, progress lies in choosing a schedule and sticking to it. Weekly or monthly, consistency works to build a habit.
#2: Calculate Inventory Turnover
If you fall on the less frequent end of that spectrum, ordering might be a big of a guessing game at times–too little here, too much there. However, calculating and tracking inventory turnover can minimize this margin.
Inventory turnover can be calculated using the following equation:
(Beginning Inventory + Ending Inventory) ÷ 2 = X
CoGS (Cost of Goods Sold) ÷ X = Inventory Turnover
Shrinking this number means producing less waste while inching closer to the perfect ordering amount.
#3: Get Organized
It’s all too easy to let organization fall to the wayside when other tasks pop up. However, an unorganized space makes for more work later and could pose health issues.
Most operators herald the First In, First Out (FIFO) method of inventory, meaning dishes make use of the oldest ingredients first. If there’s no organization system, this can be a difficult task. This might, in turn, produce wildly varied plates on the same night and leaves potentially including bad ingredients up to chance.
Plus, organization means less time sorting through materials. Everyone wins!
How Can We Help
Taking inventory may never be an operator favorite. In all likelihood, it probably has secured its spot at the very bottom of the totem pole. Let’s return to our hard truth: taking inventory sucks. Another one? Good inventory management is necessary for successful operations. Craftable takes pride in being the king of making inventory suck less.
Our platform seamlessly connects purchasing with inventory and transforms your data into effective tools for your business. Cutting inventory time in half while laying the foundation for menu engineering? That’s the kind of too-good-to-be-true statement Craftable turns into reality.
Schedule a demo and start owning your inventory management today!