Five reasons why your inventory hasn't been working for you

Oracle Food and Beverage also explains how these woes can be easily solved.

Whether you’re starting out as an independent restaurateur or are a veteran chain owner on your 20th outlet, managing inventory can be a complicated thing. The process of consistently and accurately tracking orders, supply (especially perishables!), and logistics is prone to error, and in the worst cases can cost you far more than a day of poor sales.

This can get exponentially trickier in smaller restaurant formats like food stalls or pop-ups where transactions tend to be quicker, a lot more hectic, and can easily lead to a miscalculation.

Here are five of the most common reasons why you might be having problems with your inventory and how you can solve them, according to Fiona Southam, Sales Director ANZ, Oracle Food and Beverage:

1. You hold too much stock
Although it is generally a good idea to stock up on ingredients for your best-selling menu items, it pays to remember that there is always an opportunity cost paid in every transaction. Hoarding stock may seem like a good idea, but not if it can lead you to cut back your budget on other, more important expenses, especially if the surplus just ends up sitting in storage. This is not even mentioning the added burden involved in incurring excess storage costs.

2. Your wastage is out of control
A poorly managed inventory is also likely to end up with a lot of waste. Spoiled meat, vegetables, and other ingredients are not only a shortfall in your cash flow, but are a terrible waste of food. What’s more, a mismanaged inventory is prone to errors in recordkeeping. Worst case scenario, spoiled food can go unnoticed into a customer’s order, a health risk that can harm others and cost you your business.

3. You estimate quantities when making an order
For someone new to the industry, knowing exactly how much supply to order at certain periods of the year can make or break their business. Order too few, and you risk missing out on sales. Order too much, and you risk a crowded inventory and a spent budget.

4. You buy low quality stock from untrustworthy sellers
Aside from keeping on top of your quantities of stock in inventory, making sure you have the best quality ingredients from the best suppliers is just as important. The benefits of having quality ingredients speaks for itself, but making sure you get what you need at the right time from suppliers you can count on speaks volumes.

5. You don’t keep track of the dynamic Costs Of Goods Sold
Most important in any business is profit, but poor inventory management could lead to errors in your bottom line. Cost of goods sold, or the accumulated total of all business costs used to create any products sold, is in constant flux in a business. A simple oversight in tallying orders and tracking supply could cause huge headaches for your accounting team down the line.

What you need to have an efficient operation
Fortunately, many of these common pitfalls can be avoided. No longer do you have to waste precious hours and energy balancing Excel sheets, manually slaving over invoices to track your stock. Automated inventory management systems, such as the Oracle MICROS, enables multiple employees to track items across several locations, monitoring orders and shipments, and optimizing workflow management.

Oracle MICROS Inventory Management integrates with Oracle MICROS POS to track inventory in real-time with vendors to reduce errors, identify waste and theft, simplify order processes, and create a more efficient, more profitable operation.

Furthermore, automated systems can record and monitor in real-time product usage for awareness of stock level and variances, allowing F&B operators to optimize stock levels with the system’s suggested ordering based on real-time forecasts. From there, operators can easily submit purchase orders, or get instant updates on inventory on mobile. There are also features for analyzing global overviews of purchases by vendor, store, and item, as well as providing full recipes and product-costing.

Oracle’s MICROS Inventory Management System is specifically designed for F&B, taking into account the amount of product going into each dish – a recipe-based system rather than a generic inventory management system or accounting software.