An effective restaurant inventory management software is crucial for the success of restaurants, cafes, and any business in the food sector. It influences operational efficiency, cost control, and maximizing profits.
Restaurant inventory management involves carefully monitoring food, ingredients, and other items to ensure necessary products are readily available. The aim is to prevent shortages, especially during peak times.
Advanced inventory management systems enable restaurants, bakeries, and food-and-beverage service providers to optimize resources and reduce waste, boosting profits. They also provide valuable data on usage and popular items.
In this guide, we’ll be looking at the top inventory management challenges facing restaurants, especially inventory tracking. We’ll also explore the benefits of using modern inventory management software with insights on how Foodics can improve and streamline inventory tracking.
Statistics: Food waste and inventory tracking
Food waste represents a major challenge for restaurants and cafes, often due to poor storage practices. In the United States, it is estimated that 63 million tons of food—about 27% of all food—goes to waste, primarily from inadequate storage and over-purchasing.
In the Middle East and North Africa (MENA) region, countries like Saudi Arabia struggle with food waste, which costs the country nearly SAR 40 billion ($10.67 billion) each year. According to the Saudi Ministry of Agriculture, 33% of food is wasted, which means each person wastes 184 kg of food per year.
Meanwhile, the UAE’s food waste problem is clearer in the month of Ramadan. Research shows food waste in UAE restaurants has increased to 40%, while 80% of families waste food during the holy month.
On the other hand, research suggests that regularly tracking sales can help restaurants increase profits by 2% to 10%. That’s because sales data and inventory management are closely linked to each other. Furthermore, 10 to 15 menu items usually account for around 50% of total sales. This could help restaurants identify their most in-demand items and maintain appropriate stock levels to meet their customers’ needs.
Top inventory tracking challenges in the F&B industry
There are many challenges facing inventory management in the restaurants and cafes industry. These hurdles can affect your entire business, potentially leading to reduced profits or even closing down the business.
What are the top challenges in inventory management?
Pen-and-paper inventory tracking
Some restaurant and café owners still use paper notebooks for inventory tracking. However, this method is outdated and impractical. Notebooks can be lost or damaged, resulting in lost records and increased chances of errors.
In today’s fast-paced environment, effective and accurate inventory tracking and management require a more reliable approach than pen and paper.
Failing to monitor inventory
Failing to track inventory properly can lead to items getting lost, stolen, or expiring without your knowledge. This oversight can negatively impact your restaurant’s sales, particularly affecting customer favorites and peak dining times.
Food waste
Food waste is a major issue for the restaurant and hospitality industry. Inventory management is crucial in addressing this problem. Poor food storage can lead to spoilage or expiration before the products are used, resulting in significant financial losses for your restaurant.
Disorganized inventory and supplies
A poorly organized inventory can hinder timely access to materials, leading to delayed orders, both for in-house guests and for orders going out for delivery.
Insufficient staff training
To ensure the success of your restaurant, café, or food truck, you need to train your staff on inventory tracking solutions.
Insufficient training on modern inventory management systems can result in significant errors in data recording and product inventory. This can lead to inaccurate data at the end of each day, week, and month.
Further reading: Opening a Coffee Shop: Business Plan and Key Steps
Theft and embezzlement
Theft poses a major challenge in inventory management, especially in upscale restaurants which use high-quality products. In the U.S., 75% of inventory shrinkage is due to theft by warehouse workers, costing the industry about $20 billion annually. This often results from inadequate inventory management systems.
To reduce theft, we recommend ongoing inventory monitoring and installing surveillance cameras in warehouses.
Supplier problems
Supplier issues often arise from poor inventory management, such as late deliveries of food items or inconsistent quality of essential materials and ingredients. These problems adversely affect the quality of the food provided.
Benefits of using restaurant inventory management software
Using inventory management software is an essential element of running a successful restaurant. This software offers many benefits that enhance business performance and increase profits.
1. Reducing food waste
Inventory management software helps minimize food waste by accurately tracking stock levels and identifying less popular dishes.
This enables restaurants and cafés to order the right quantities and avoid purchasing items that may expire unused.
2. Complying with food safety regulations
Part of managing your warehouse or inventory is following strict food safety regulations. This includes tracking expiration dates, maintaining cleanliness and sterilization, and storing food at proper temperatures.
These practices ensure compliance with local laws and protect consumer health.
3. Improving cash flow
Effective inventory management systems help you accurately control purchases and prevent over-purchasing, which reduces unnecessary spending and boosts profitability.
Further reading: Foodics Accounting: The Rising Star of F&B Accounting Solutions
4. Product and supplier management
As mentioned, issues with suppliers can arise from poor inventory management.
Using restaurant inventory management software allows you to effectively control and track your products, improve your interactions with suppliers, keep track of needs and delivery dates, and streamline the re-ordering process.
5. Ensuring availability and quality of popular dishes
Another reason to consider using modern restaurant inventory management systems is it helps you monitor food items and other products in real-time.
It alerts you when key ingredients for your most requested dishes are running low, ensuring you can continue serving them, especially during peak times.
This capability helps attract customers and maintain your restaurant’s reputation.
6. Handling seasonal demand
Inventory management technology offers analysis and reports on your customers’ ordering patterns throughout various seasons and holidays. For example, you can review guests’ behavior during Ramadan, Eid, or even Halloween.
This means getting accurate forecasts of food quantities needed, allowing you to prepare your inventory in advance to meet your restaurant’s demands effectively.
Why choose Foodics inventory management system
Foodics stands out with its user-friendly interface and support for Arabic, English, and French.
Here are a few more reasons and features to choose Foodics:
Effortless integration with other programs
One of the key advantages of Foodics is that its inventory management system is integrated with its point of sale (POS) system. Foodics provides various solutions that are easily integrated with other external applications, such as loyalty programs and table management systems.
This integration allows you to manage everything from a single dashboard.
Further reading: How POS Technology Is Changing the F&B Industry
Real-time inventory tracking
Foodics’ inventory management system lets you monitor your inventory in real-time, providing instant alerts when items are nearing expiration or about to run out. This ensures you never run out of essential stock.
Improving warehouse efficiency
Having full control over inventory reduces loss and waste, enhancing efficiency across your entire inventory.
Automating orders and enhancing restaurant operations
Foodics enables you to synchronize inventory data with kitchen workflows, purchasing, and sales.
This automation streamlines tasks such as ordering ingredients and calculating costs, minimizing manual errors and allowing employees to focus more on customer service rather than paperwork.
Manage all branches from a single dashboard
If you manage multiple restaurant or coffee shop locations, Foodics lets you oversee all your branches from a single dashboard.
You can manage inventory across branches, transfer stock between locations, compare performance metrics, and place bulk orders, all while customizing policies to meet the specific needs of each outlet.
Available training for all team members
Foodics offers user-friendly tools and guidance, ensuring your team quickly learns how to use the system. With 24/7 technical support, video tutorials, a help center, and customized training, you can enhance productivity for all users.
Detailed reporting
Reports are critical for the success of any business. They help you make data-driven decisions. With Foodics, you can visualize data through easy-to-understand graphs, which help identify trends and optimize menu pricing for increased profitability.
You can generate detailed reports on inventory turnover and ingredient costs for better decision-making.
Final words
Relying on manual inventory management or paper-based systems is a major risk, leading to inefficiencies, theft, waste, and lost time. It’s a risk you can’t afford if you want to be successful.
These challenges and risks can increase financial losses and even result in business closure. Additionally, paper records are vulnerable to loss or damage.
On the other hand, adopting modern inventory management software, like Foodics, improves accuracy, enhances efficiency, and protects critical data.
Tech-based inventory management systems help restaurant and café owners streamline daily operations and reduce long-term costs.
Foodics’ system is more than just an inventory management solution. It offers a complete restaurant management system including features like loyalty programs, POS, and self-ordering kiosks, helping streamline operations, boost productivity, and maximize profits.
Boost your restaurant’s efficiency, minimize inventory waste and losses, and take full control of your operations with the all-in-one Foodics solution.
Contact us for more information.
