5 Steps on How to Effectively Control Your Inventory

September 15, 2021 Edition

I know how cumbersome & annoying it is to count inventory. I spoke to many people/businesses where I can hear the hesitation through their teeth they do not want to bother with inventory. I believe that a key component in effective kitchen management is inventory control. By knowing what inventory is on hand at a given time, the manager will be able to plan food orders, calculate food costs since the previous inventory, and make menu item changes if needed. By keeping an eye on inventory, it is possible to note potential problems with pilferage and waste.

Managing inventory is like checking a bank account. Just as you are interested in how much money you have in the bank and whether that money is paying you enough in interest, so the manager should be interested in the value of the supplies in the storeroom and in the kitchen.

An inventory is everything that is found within your establishment. Produce, dry stores, liquor (front-of-house inventory), or anything that costs money to the business should be counted as part of inventory. Kitchen items should be counted separately from the front of house and bar inventory and so forth. Pots & pans, uniforms & linens will not be part of inventory but will be part of small wares and/or supplies which will be part of your operating expenses.

Side Note on Liquor Inventory: There are a few things you might need to consider when selling liquor:

Take control of your liquor inventory by utilize assortment management features, always update incorrect number & perpetually count your inventory
Watch out for Liquor Employee Theft
Lastly, understand which liquors are making your business profitable and which ones are simply taking up shelf space. You can start comparing profits instead of just quantities or revenue, evaluate complementary products & adjust prices accordingly, compare sell-through rates and inventory turns to prevent overstocking or under-stocking and avoid stock-outs by optimizing reordering levels.

Regardless of the size of your operation, the principles of inventory control are the same. In larger operations there will be more people and sometimes even whole teams involved with the various steps, and in a small operation all responsibility for managing the inventory may fall on one or two key people.

Effective inventory control can be broken down into a few important steps:

Set up systems to track and record inventory
Develop specifications and procedures for ordering and purchasing
Develop standards and procedures to efficiently receive deliveries
Determine the frequency and processes for reconciling inventory
Analyze inventory data and determine any areas for improvement

I have prepared a video that narrows down each of these 5 steps. If you would like to learn more about these 5 steps in detail, please click play the video below: