Streamlining Inventory

Taking inventory. Those two words can send the best of kitchen staff running for the back door. In an organized kitchen in which inventory is streamlined, not only is the staff happier, but the owners are as well. Inventory is one of the key ingredients to cost control and increased profits.


While a fully integrated POS system with an inventory management feature can take out the guess work by tracking sales, ingredients, as well as purchases, manually taking the inventory is still required. Even if every ingredient for every meal is recorded, these modern-day marvels cannot account for food spoilage, incorrect portion control or theft, an unfortunate common occurrence in the restaurant industry. A good inventory system will do the following:

  • Minimize waste and spoilage and optimize the ordering process.
  • Provide accurate food costs.
  • Prevent lost revenue due to insufficient supplies.
  • Dissuade a staff member’s inclination to take that extra rib eye lying around or a few shots of Jameson.
  • Promotes organization and cleanliness.


The Process

The bad news: inventory needs to be conducted at least once a week and before placing orders. Picking the same time of the same day (when the restaurant is closed) helps develop a sufficient and productive process. Your prep, who also does inventory, knows that Monday morning at 9am is the weekly allotted time, and so does the rest of your staff, making them less apt to nab a gallon of juice after a particularly active Saturday night wrist-curl session. In addition to standardizing the time and day, assign this task to the same one or two people each week. The same staff conducting the inventory every week develops a rhythm that speeds up the process considerably.

Start by organizing the areas including dry storage, walk-in freezers and refrigerators. Remove any expired items and record any waste. Have a place for everything and have everything in its place. There’s a psychological advantage that takes place in a clean, organized kitchen whose inventory and, therefore, orders are standardized. The staff works more efficiently, in part because they do not have to go searching for necessary items. Preparation seems to go more smoothly, effectively eliminating waste. Portion control is kept up to standards. Servers do not have to tell expectant guests that the entrée they drove 30 minutes to experience is ‘sold out’. It’s as if one area feeds off the other. Inventory and ordering work together in a seamless flow that speaks to Aristotle’s observation: “Nature abhors a vacuum.” —what comes in, goes out—what goes out, comes in.

Upon receiving the weekly order, check to make sure all items are fresh and as ordered and then add these items to the existing inventory. An automated system will update the inventory automatically upon receipt of the supplier’s invoice. Make sure items are restocked using a rotation first-in, first-out system (FIFO).


Controlling Food Cost

Ordering correctly is essential to controlling food costs. Knowing what to order is enhanced when you have a streamlined inventory process in place. Calculate your food cost by adding the beginning inventory costs and all purchases of that week. Subtract this with the ending inventory costs. Divide this by the total sales for that particular week. Example: Your beginning and ending inventory was $12,000. Your purchases for the week were $7,000. Your sales for the week were $25,000. 12,000 + 7,000 – 12,000 / 25,000 = .28 or 28 percent. Not bad. Food costs generally range anywhere from 28 to 32 percent depending on the style of restaurant.

Developing a streamlined inventory process can take time and attention but, once in place, you will find the initial effort so worth the outcome.



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