The primary objective of any business is to create a distinct name in the market with the help of systematically integrated systems in every department. The restaurant industry is no exception. Multiple food joint owners across the globe have either invested or are planning to invest heavily in Inventory Management Software. Why? Restaurants can use the Inventory management system to keep track of their inventory.
Why do Restaurants Need Inventory Management Software?
Around 30% of the food produced globally goes to waste, according to the report from UpCycled Food Association.
Food waste is a major concern. It affects the environment. Restaurants can prevent the amount of food wasted and loss if they invest in the best inventory management software. The tool helps to constantly keep track of a variety of kitchen stock. Restaurants can efficiently perform their daily, weekly, monthly and seasonal restaurant activities by relying on data-driven reports and analytics generated by such software. They can reduce food waste, improve their sales and maximize profit.
What is the Purpose of Food Inventory?
The restaurant industry can leverage the software to practice optimal inventory levels. The right combination of features integrated with the overall workflow allows different types of restaurants to generate their marketing and sales strategies. In addition, integrated Restaurant Management Software streamlines operational activities and maintains a healthy workflow of the restaurant chains, cloud kitchen, medium and huge franchises.
Besides traditional operational activities, inventory management also plays a major role in ensuring on-time delivery and averting stock wastage. The system is also responsible for restocking items, storage management, product usage, etc. Thus, feature-rich restaurant inventory management software largely impacts employee productivity, operational efficiency, and decision-making.
Inventory management tools stand as key investments for all sizes and types of companies - be it the FAANG or the recently designated MAMAA group of companies, or the small mom and pop stores. This article talks about seven prime features for restaurant inventory management software with suitable products that help restaurant businesses smoothly keep tabs on inventory.
Inventory management software organizes production tasks and business operations by managing and overseeing purchase orders, stocks, supply chains, payments, etc., in real-time. The software smartly translates massive data and simplifies business processes, encouraging users to respond to the market demand. For this reason, the global market is predicted to touch $4.4 billion by 2030 at 12.1% CAGR.
Can Restaurants Use Technologies to Practice Sustainability and Practice Efficient Restaurant Inventory Management?
Every industry has a variety of raw materials, finished goods and ready-to-use products as inventory. When it comes to the restaurant business, supplies like food, ingredients, grocery, vegetables, fruits, cooking and serving equipment, dining table accessories, employee uniforms, cutlery, etc., are considered as stock. Inventory management software helps operation managers to look after priority-based kitchen requirements, on-time inventory planning, active storage management, centrally synchronized purchase and order management, accurate transaction collection and customer demand through in-depth numeric measures. The software is packed with features that specifically cater to restaurant businesses.
The following sections will discuss the must-lookout-for features of the top restaurant inventory management tools verified and identified as top players by the most reputed B2B platform, GoodFirms.
Top 7 Must-have Restaurant Inventory Management Software Features
Restaurants can customize inventory management software features based on the food-service model. In order to decide on an ideal restaurant inventory management software, owners need to be well aware of budget, stock storage requirements, customer service, business size, number of users, etc. However, certain prime features can support restaurants with inventory efficiency, giving a solid grip on behind the scene madness.
1) Order Management & Fulfillment
Restaurant owners integrate order management to follow a proper life cycle of orders and directly connect with customers and vendors. Both parties can effortlessly keep track of orders, minimizing interaction with necessary information. Real-time update on orders empowers users to maintain delivery deadlines, ensure on-time stock availability and centralize data from various platforms. This allows restaurant owners to deliver the best to their customers and explore new recipes by understanding their preferences. Franchise owners can comprehend the demand of various locations during different seasons, periods, festivals, etc., and plan menus, recipes, inventory and business techniques accordingly. For example, the restaurant staff can experiment with cold beverages during summer and hot drinks during winter. Mixologists and baristas can serve beverages depending on the location, popularity, product availability, time zone and season.
Benefits:
- Restaurant owners can easily calculate the sell-through rate of individual items and the grouping of items.
- An integrated online ordering system allows customers and buyers to have an update on online food orders instead of calling restaurants or vendors to ask about the status.
- Operational managers can synchronize online order transactions on a cloud system to tally end-of-the-day balance.
- This feature enhances accuracy and quality in forecasting demand, maintaining precise raw materials, user-friendly contactless delivery, payment processing, etc.
- Historic inventory data in order management software provide a great insight into market patterns and customer behavior, which helps businesses to estimate future demand and be prepared for it.
- Operational managers can smartly plan employee scheduling during peak hours to avoid customer dissatisfaction.
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2) User Alerts & Notifications
Alerts and notifications feature updates users about low stock, critical data and uneventful situations in no time via SMS, emails, app notifications, etc., of different locations. The first In, First Out(FIFO) method averts any wastage and makes it possible for users to make the most of perishable items. The floor team can plan their strategy based on current inventory information. For example, operation managers and chefs can list recipes that need to be sold quickly. Chefs can prioritize perishable items based on their shelf life to avoid wastage. It gives provision to waste control and increases cost savings. Users highly depend on this tool due to the limitation of manual monitoring.
Benefits:
- The automated system alerts users about product details and allows restaurants to immediately plan their sales, marketing, advertisements and supply.
- Restaurants can positively control storage costs, carrying costs, disposal charges, transportation charges, rent charges and other stock expenses and simultaneously increase profit margins.
- Operation managers can skillfully prevent out-of-stock conditions during business hours with low-stock level alerts, reorder stock to the optimal inventory level and integrate the automated reordering system to meet guest orders.
- Inventory alert tools play a significant role in forecasting demand and ordering stocks with detailed analysis.
- Restaurant owners can prevent warehouse thefts, employee fraud, stealing, stock damage, fire accidents, etc., by taking preventive actions.
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3) Inventory Control & Optimization
Inventory control and optimization is one of the must-have tools for the restaurant business because it promotes cost-effectiveness. The tool is equipped to subtract items from inventory based on usage, which helps them track sell by-products and storage levels. This feature also explains profit margins by keeping track of food usage costs. It constantly monitors inventory storage, activities and usage to scrutinize popular and least-used items. In-depth information on inventory purchase, order, shipping, reorder, storage, maintenance, customer satisfaction, damage prevention and sales helps the industry to avoid expenses and loss. Restaurant owners can opt for FIFO, LIFO and Just-In-Time(JIT) approaches for perishable items. ABC analytics, safety stock and back ordering approaches can be opted for items with no expiry dates. Every year, there is 17% of food wastage worldwide, which respectively includes 5% and 2% by food-service and retail businesses. Proper storage optimization increases the visibility of items that need extra care and special conditioning.
Benefits:
- The food-service industry can increase the profit of their business with complete control of sales and inventory ratio.
- Inventory control maintains the quality of goods and services, reducing dependence on manual methods.
- Data analytics helps restaurant owners to avoid seasonal stockouts and shortages and sustain guest happiness.
- Cost-saving, storage effectiveness, employee and customer satisfaction are some of the direct benefits of planned inventory.
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4)Restaurant-specific Accounting
Accounting software gives a clear picture of the financial performance of a business, provides real-time updates on profits and losses and maintains transparency among partners. This system gets a boost by integrating POS to manage economic activities, Reporting Software for planning and data Analysis Software for decision-making. POS supports businesses in creating a communication platform between the wait staff and the kitchen staff to establish guest orders. Sales, purchase, online and offline order, raw material, profit and loss reports, etc., gives an overview of business operations. Multiple industries depend on descriptive, diagnostic, predictive and prescriptive analytics to make better business decisions. Business-specific accounting system enhances overall business performance, making financial, operational and managerial more effective.
Benefits:
- Business-specific accounting helps restaurants to plan better, forecast accurately, minimize expenses and streamline information.
- Collecting information from different departments, enhancing productivity, making data-driven decisions, increasing cost-cutting, eliminating human errors, etc., becomes easier and faster.
- This tool smoothly analyzes and explains sales and marketing patterns, understands customer behavior, and checks inventory history and other data to grab lucrative opportunities.
- The food-service business can actively pay attention to wastage control, actual food usage, trends, category-based expenses, etc., and avoid manual work.
- The system ensures invoice categorization, order and payment management, budget management, performance management, payroll management, etc.
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5) Pricing Management
The costs of vegetables and fruits are never the same. Owners can decide the cost of a dish depending on raw materials, expenses and the number of consumers. Pricing management supports owners in deciding prices based on exclusivity, market requirement, customer value, competitor pricing and profit. Entering recipe details in the software makes it easy to calculate plate per cost for an online system. The system enhances inventory tracking, product optimization, wastage control, cost-saving efficiency, storage management and employee effectiveness. The system can categorize recipes based on prep time and ingredient types, making it easy for chefs to plan employee shifts and utilize products.
Benefits:
- Restaurant inventory management software can seamlessly administrate and track inventory-related data, orders, purchases, and transport, utilizing these reports to fix the price of menus with various cuisine and dishes.
- A robust inventory management software increases users' ability to control recipe pricing using other ingredients during shortages or unexpected situations.
- Since last year, 69% of consumers have been actively paying attention to avoid unwanted expenses. Numerous industries carefully tackle such pricing conflicts with real-time updates, real-time dynamic pricing and advanced pricing methods to retain their customers.
- Users can leverage the well-informed price prediction tool of the Pricing Management Software to determine the impact of price change.
- During the price testing period, the system backs up the users with strong market research into achieving maximum menu prices and creating a specific customer-centric catalog.
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6) Purchasing
Purchasing software guides restaurant owners and operation managers to automate the purchase process and streamline other operations, increasing supply efficiency. Users can integrate purchasing software with accounting, inventory, sales, order management and marketing software for accurate workflow. This incorporation facilitates cost-cutting, time-saving, and error-free financial recording. Purchasing software makes it easy to store, contact and build relationships with vendors. Automation in purchasing eliminates order latency, human error and extra inventory expenses.
Benefits:
- Purchasing automation simplifies the procurement process for users by categorizing various items and maintaining inventory levels.
- Purchase history gives detailed insight into variations in demand and trends.
- Restaurant owners can avert fraudulent activities due to authentic invoice documentation, ensuring transparency at the time of delivery.
- Keeping track of Stock count, product shelf-life, dead stock, age management, carrying cost, warehouse stock, cycle counting, etc., becomes hassle-proof with this tool.
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7) CRM & Marketing
Customers can approach managers for special dietary requests such as vegan, specific meat demand and elimination of allergic food items. Additionally, restaurants also have to deal with online and offline complaints, feedback, suggestions, etc., to improve customer experience. CRM keeps a record of special requests and customer interactions, making it easy for staff to act according to the special request. Integrated CRM with such information supports marketing software to attract various types of customers via special offers, promotions, pay-per-click ads, marketing emails and SMS. CRM & marketing software encourages owners to cater to a wide range of customers and remain limited in the market.
Benefits:
- Restaurants can avoid deadly and serious medical consequences due to allergic food reactions, which can create distrust and bad impressions among guests.
- Restaurants can run special promotions and offers for seasonal items like mangoes, berries, avocado, kale, tangerine, fresh and seawater fish, salmon, tuna, etc., to serve them with quality and quantity.
- Based on the location of restaurants can increase profit margins by targeting area-specific customers such as students, fitness freaks, etc.
- Detailed information on customer behavior can help restaurant staff to enhance customer experience and earn brownie points.
- It becomes easy for the wait staff to notify the kitchen staff about special requests to avoid mishaps.
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The above-mentioned were the lead roles in restaurant inventory management software. Yet, many business models take support of certain other integrations to add more value to workflow.
Additional Considerations: Integrations
- Ecommerce Integration: Ecommerce integration accumulates, arranges and transfers data from various online platforms. The data includes financial information, inventory status, multi-channel sales, periodic sales, sales and marketing activities, CRM and ERP input.
- Payroll Integration: Payroll integration covers employee payroll, salary taxes, tip credits and adherence to labor law compliance for legality. The easy-to-use and automated integrations keep track of fixed employee expenses to avoid embezzlement.
- Mobile Access: Users can take advantage of the on-the-go mobile access to efficiently manage inventory. Users can make operational decisions and track real-time stocks, orders, payments and much more which helps to have decisive control.
To Sum Up
Recent reports indicate that around 40% of the food is wasted in restaurants, and out of this, nearly 85% is thrown out, and a minimal percentage of the wasted food is only recycled or donated.
Learning to manage inventory for a successful and profitable food-service business is vital, so there is neither food waste nor overproduction, incorrect orders, spillage or spoilage. The ongoing technological trends for restaurant inventory management, including AI, have been helping key players in the restaurant industries, like fast food joints, fast casual caterers, virtual restaurants, family restaurants, food trucks, cafes, pubs, bars, etc., to reduce wastage. Individual businesses should smartly invest in the proper tools to explore and build a sustainable environment.
