• How-to

Restaurants in India are typically guilty of not tracking and managing their inventory efficiently enough. This is particularly true of small and mid-size operations that cannot afford inventory management software. If you are an upcoming restaurateur facing this hurdle, follow these simple tips.

Know the turn
All restaurateurs must know their turns. What are they, you ask? Turns or turning your inventory is basically the time it takes your restaurant to use up the entire food inventory that it currently has in stock before it expires. Typically, a well-oiled restaurant seeing a bit of success should see anywhere between four and eight turns each month. The higher the turns, more the disposable income you will have for other expenses and bills.

Calculate the turn
But how do you come about on a figure for your restaurant’s turn? One way is to get automated software for this. For the stingier, there is a manual way. Add up the value of your inventory when your shelves are completely stocked. Then, calculate your average inventory value. This is the sum of the value of your inventory at the beginning of each month to the value at the end of each month, divided by two. Now divide the value of your inventory by this average inventory value. The lower the number, the more efficient your restaurant is. If it is higher, you need to slow down your orders.

FIFO and not FIFA
The “FIFO” system stands for “first in, first out.” It is a good example of how you should manage your inventory. Every food item delivered will have an expiry date. Items with the closest expiration are “first in” and are to be “first out” from the stores. To help your employees accomplish this, place items with the nearest expiration date closer to the store doors and shelf fronts. Use the same concept with refrigerated items with “first out” frozen items going near the front or top of the freezer and newer items toward the back or bottom.

Manage the small to be big
Restaurateurs make a very common mistake by not managing the small items section well. One of the most common things that invariably delay orders is the paper napkin—because the server cannot find any. To overcome this, identify and label a shelf in the store in which these dry carryout goods can be within reach.

It is best to also tear off just one side of the cases to easily stack the cases on the shelves, as well as to be able to see exactly what you have on hand for stock-taking. Follow the same procedure progressively for all your bigger goods and you will be on your way to having an efficient inventory.

©Entrepreneur July 2010

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inventory, manage, restaurant, track