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Avoid These Five Costly Inventory Mistakes
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Xenial-Avoid-These-Five-Costly-Inventory-Mistakes.jpg
Product equals money, and managing that product directly impacts profitability.

Keeping track of inventory on hand is a delicate balancing act. Too much product, especially perishable product, and you’ve tied up cash unnecessarily. Too little, and you risk disappointing someone who orders that dish you can’t make.

Here are five inventory mistakes worth avoiding:

  1. Failing to track product regularly. Let’s face it, inventory is no one’s idea of fun. But is counting money fun? Try to remember that your inventory IS money. It costs money to acquire, and it produces money when transformed into orders. If you’re not checking quantities on a daily or weekly basis, you could be missing foods on the verge of spoiling, an abundance of one ingredient, the complete absence of another or unexplained shortages that demand further investigation.
  2. Not establishing or enforcing recipe standards. Let’s say your cooks have a heavy hand when plating roast beef, or your bar staff overpours. Great for the guest; not so great for you. These rogue actions undermine your efforts to maintain food and drink costs and wreak havoc on your ability to forecast what you’ll need. In a perfect world, orders, cooking standards and inventory are all synched into an integrated POS, which uses that data to calculate how sales are depleting inventory and can alert you when an item is dipping well below par levels, triggering an order or change in a standing order. Centralizing this information can help you keep an eye on pricing trends as well, so if there’s a sudden jump in the price of, say avocados, you can determine if it makes sense to slightly increase the price of items that use this ingredient.
  3. Not following a FIFO policy. It’s Inventory 101: The oldest goods should be used first, to help reduce the potential for keeping products past their sell-by or use-by dates.
  4. Failing to factor sales forecasts into inventory. Being able to project sales based on history, reservations, LTOs, day of week, special events and other factors is essential to maintaining the correct inventory levels. If yours is a seasonal restaurant, knowing when the season begins and ends is especially crucial. If you expect a rush at the holidays, or do a lot of catering, those busy weeks or group bookings need to be considered.
  5. Overlooking variances. These could be variances in delivery orders versus what you expect to find in the walk-in; counts that don’t reflect sales; incorrectly input numbers from an earlier inventory; theft; and so on. They are all drains on profit and potentially detrimental to your ability to serve everything on your menu. Perhaps the manager who signs for deliveries has gotten a little lazy about checking them against the invoice. Or your chef has decided to order a higher grade of beef than you agreed on or gotten a bit too generous with the produce supplier, bringing in more than you can possibly serve before quality goes south. Studying variances is a way to root those practices out.

Inventory doesn’t manage itself. Fortunately there are a number of ways to wrestle with one of your biggest ongoing expenses.