Successful restaurant inventory management is vital for any restaurant business in the high-stakes food service industry. Among the most potent methods of staying ahead of the game and increasing your wealth is real-time inventory tracking. Having access to correct and real-time data on inventory levels enables the restaurant to make informed decisions, minimize wastage, and maximize efficiency improving restaurant profit margins in the process.
In this guide, we are going to discuss how adopting inventory tracking software for restaurants can help you track restaurant inventory in real-time, reduce costs, and increase your profitability.
What is Real-Time Inventory Tracking?
Real-time tracking of restaurant inventory is defined as an automated and continual monitoring process of tracking the inventory of your restaurant as it flows in and out. In comparison, while manual stocktaking is performed at intervals and is error-prone, with real-time inventory monitoring the score of inventory is instantaneous. This information is accessible in real time, typically via cloud-based restaurant inventory management solutions.
Instant notifications of low stock, ingredients nearing their use-by date, or items needing a top-up can only come with real-time tracking. Because of this technology such as cloud-based systems, POS integrations, and mobile apps, this is possible.
Such tools simplify stock management without relying on traditional manual stock counts which are prone to human error and are time-consuming.
Common Inventory-Related Challenges Faced by Restaurants
Running a restaurant is a delicate balance, and poor inventory management can significantly disrupt operations. Often, restaurants can face the following common inventory-related challenges:
Overstocking Leading to Food Waste
Over-purchasing one menu item by restaurants can lead to food waste in no time. Vegetables, dairy products, and meats are perishable and have limited lifespans. Limited real-time inventory tracking makes it challenging to assess stock that needs to be ordered, resulting in excess stock and waste. Food waste can chip away at restaurant profit margins, after all, so you can see how this directly affects your bottom line.
Understocking Resulting in Missed Sales and Unhappy Customers
On the flip side, overstocking can be equally harmful. During peak hours, if you run out of key ingredients, you can miss relevant sales, have angry customers, and even damage the reputation of your restaurant. Without up-to-the-minute inventory monitoring, restaurants can under order and be unable to meet customer demand.
Inaccurate Manual Counts Causing Financial Discrepancies
Counting inventory manually takes a long time and introduces errors. Human errors or communication among the staff can lead to inaccurate counts causing loss of money. This can result in the wrong sequence of orders or even result in overstocking or understocking, both of which can have a significant impact on profits.
Difficulty in Tracking Fast-Moving or Perishable Items
In one restaurant inventory, some ingredients get used up faster than others, such as spices or fresh produce. These items come in very tiny quantities, so manually tracking usage can be difficult. That means withdrawing some from the inventory, without a system this might turn hard since you will not be able to exactly determine which ingredient is to be refilled asap which may lead you to have backstock on most essential ingredients.
How Real-Time Inventory Tracking Directly Enhances Profit Margins
Implementing real-time inventory tracking for restaurants is more than just keeping track of your stock levels; it is about making data-driven choices that instantly enhance your restaurant's profit margin. Here’s how it works:
- Reduced Food Waste & Spoilage
Real-time inventory updates include the ability to track expiration dates, as well as the rate at which physical items are used. This enables you to define low or expiring stocks automated alerts and enforce a better FIFO practice. Keeping an eye on how long an ingredient can stay on the shelf means lower waste & spoilage which directly leads to decreased food costs & increased restaurant profit margins. - Improved Purchasing Decisions
Restaurant inventory tracking software thus gives valuable insights about the real consumption trends. This helps prevent reordering and excess inventory, which can leave capital sitting on the shelf. You can forecast future demand more accurately, purchase order quantities in an optimized way utilizing data-driven insights, as well as negotiate better pricing deals with suppliers. - Minimized Theft & Shrinkage
Real-time inventory monitoring is also a good way to reduce the theft or shrinkage taking place, but it is one of the lesser-known benefits of it. Accurate recording of stock levels means discrepancies are visible instantly. It prevents shoplifting since your staff knows that there is continuous surveillance going on in the inventory. Ultimately, this prevents your margins from being eaten away with inventory shrinkage. - Optimized Menu Engineering & Pricing
With automated inventory tracking, staff no longer need to spend excessive time on manual counts and stocktakes. This leads to quicker and more streamlined inventory reconciliation and more time for staff to devote themselves to guest service and food prep. Less time spent on inventory processes means higher labour efficiency and better profits.
Technology’s Role in Real-Time Inventory Management
The role of technology in real-time inventory management cannot be overstated. Advances in technology have revolutionized the way restaurants manage their stock. Here are some key technological elements involved:
Cloud-Based Inventory Software for Multi-Location Restaurants
When it comes to restaurants with multiple locations, cloud-based inventory software is a must-have. It gives you one single platform to handle stock levels at all your locations consistently which makes it much easier to keep on top of your restaurant supply chain.
Integration with POS Systems, Procurement Platforms, and Supplier Portals
Integrating software for tracking your restaurant inventory with your POS system, procurement platforms, and even supplier portals helps to automate the flow of information, offering the right stock properly and making procurement seamless.
Mobile Apps for On-the-Go Inventory Checks
Restaurant inventory can be tracked in real-time from anywhere by managers through mobile apps. Access to instantaneous inventory data regardless if you are on the restaurant floor or off-site, leads to improved decisions and inventory control.
Automated Reporting & Alerts for Low Stock, Waste Thresholds, and Reordering Points
Instant notifications stock reports and analytics enable restaurants to monitor the inventory and act in real-time when low stock or waste takes place. So you are always ready to reorder and reduce wastage.
Case Study Example
Real-time inventory tracking is a new trend amongst food service owners in New York City, and well-known restaurants have recently adopted Stocktake Onlintoto to maximize their NYC restaurant floor. Within six months, the restaurant cited a 20% decrease in food waste due to improved food cost management software and automated tracking of stock. With a 15% decrease in inventory costs, the restaurant also benefited from a more accurate purchasing decision and reduced stock level monitoring of the restaurants. The new stocktaking system also supported the management of purchasing and procurement, helping the operation reduce waste while increasing production efficiency.
Key Benefits
Here are some of the advantages that real-time inventory tracking offers to restaurants:
- Improved waste and usage tracking for better cost control.
- Reduce food waste and know exactly what you have in stock
- Intelligent and data-driven buying and vendor management.
- Empowering decision-making with real-time insights.
- Higher profit margins as a result of waste reductions, improved purchasing and pricing efficiency
Conclusion
Real-time inventory tracking can prove to be a boon for your restaurant. Using smart inventory tracking solutions, you will decrease waste, have a better grip on food costs, and optimize purchasing, which together equals stronger restaurant profit margins.
Begin building a more profitable restaurant today with a better inventory management system like Stocktake Online. Find out how Stocktake Online smart restaurant inventory tracking helps you streamline your operations and increase profit today.
Check out Stocktake Online to find out more about how we can change your restaurant inventory today!