Managing restaurant inventory is one of the most important tasks for any food business owner, as it can make or break your profitability, customer satisfaction, and food quality. In Singapore, where food costs are high and competition is fierce, having a solid inventory management system is a must to succeed.
Keep reading as we share tips and best practices to help optimise your inventory management and reduce food costs in Singapore.
Why is inventory management important for restaurants?
Inventory management affects your bottom line, food quality, and customer satisfaction. Here are some of the benefits of having a good inventory management system in place:
Reduce food waste and spoilage
Managing your inventory means avoiding overstocking, understocking, and ordering perishable items you can’t use before they expire.
Lower food costs and increase profits
Effective inventory management strategies can reduce food costs by getting you the best prices for your ingredients and taking advantage of special discounts and offers. In turn, this can increase profit margins.
Improve food quality and safety
Inventory management affects the quality and safety of your food. Tracking your supplies’ shelf life, expiry dates, and storage conditions ensures you serve only fresh and safe food to your customers.
Enhance customer satisfaction and loyalty
Having the right amount and a large variety of ingredients in stock guarantees your customers a consistent and diverse menu, so you never have to worry about running out of popular items and losing sales.
How to manage your restaurant inventory in Singapore
Managing your restaurant inventory in Singapore can be challenging, but with some tips and tools, you can streamline your inventory management process and improve your results. Below are some best practices to follow:
1. Regularly audit inventory
Know how much you have in stock. Accomplish regular inventory counts to track inventory levels, usage, and variance. You can do this manually using spreadsheets, paper forms, or inventory management software that automates the process and syncs with your Point of Sale (POS) system.
Schedule this weekly, preferably at the same time of the week to ensure consistent and accurate data. Assign specific staff members for the job and train them to do it correctly and efficiently.
2. Follow the first in, first out (FIFO) method
In the FIFO method, you use the oldest items first and save the newest for later. It’s all about maintaining quality and avoiding expired ingredients.
To start, tag each item with its purchase or delivery date and organise them by date in your storage, with the oldest in the front and the newest in the back. Keep an eye on expiration dates and chuck out anything past its prime to ensure you use everything wisely while keeping your kitchen stocked with top-notch ingredients.
3. Monitor inventory usage and variance
Keep an eye on your inventory by tracking usage and variance. Inventory usage represents what you consume in a specific timeframe, whereas inventory variance measures the gap between actual and expected usage based on your sales and recipes.
This process pinpoints the reasons behind inventory fluctuations, like over-portioning, theft, or waste. With this, you can fine-tune your inventory levels, orders, and menu to maximise your performance and profitability. You can opt for a manual approach using formulas and spreadsheets or simplify the task with inventory management software that automates calculations and reporting.
4. Optimise inventory ordering and receiving
Order your supplies based on your inventory levels, sales forecasts, and menu needs to avoid overstocking or understocking. Additionally, shop from reliable and reputable suppliers who deliver quality products on time and at reasonable prices.
It’s also best to have a system for receiving and inspecting your inventory deliveries to ensure that you get what you ordered and that the products are in good condition. After checking your purchases, update your inventory records and storage area to reflect the new inventory.
5. Use a CloudKitchens® solution
One of the best ways to manage your inventory in Singapore is to use CloudKitchens®, which are kitchen spaces that allow you to operate multiple food brands and concepts from one location without investing in a dine-in space or front-of-house staff.
This optimises your inventory management by reducing your inventory needs, as every piece of equipment is already provided; increasing your inventory turnover, as it enables you to reach more customers; and improving your inventory control, as it issues advanced technology and tools to monitor your inventory more effectively.
Optimise your restaurant inventory management in Singapore
Inventory management is a crucial part of running a successful restaurant in Singapore. To reap its multiple benefits, following the listed tips and best practices makes for a good start.
Elevate your inventory management by teaming up with Smart City Kitchens. Discover ways to optimise your inventory and cut food costs, from sharing resources to expanding your customer reach through online platforms and delivery services.
Learn more about Smart City Kitchens and how we can help you grow your food business in Singapore. Contact us and propel your company to new heights today!