How inventory management helps to run a business?
For restaurants, as well as for many other businesses, it is essential to conduct regular performance evaluations. By this, we mean both the calculation of the finances and the assessment of available stocks. It is the latter that we will discuss in this article. After reading, you will learn why inventory is so important and how to improve inventory management with modern solutions like ORTY.
What is an inventory management system?
In the work of restaurants, the correct distribution of stocks plays an extremely important role. You cannot afford to order too many products as they can expire, and you will lose money. Also, you can not allow the ingredients to run out at the most inopportune moment. It will also lead to the loss of finances, and maybe even customers and reputation. To prevent such situations, you need to regularly monitor inventory, know how to store stock correctly, and clearly understand when to replenish products. Inventory management is responsible for all this.
Counting each item by hand is a complex and time-consuming task. Besides, you will have to put off doing other things to focus on it. That is why modern businesses use software for inventory management. It automates many processes, quickly and regularly calculates balances, allows you to control the consumption of products in real-time, and simplifies inventory forecasting. All this, in turn, leads to a reduction in financial expenses and saves you and your employees time, making the company’s activities more efficient.
Inventory control process
While inventory management and inventory control seem like two terms that are used interchangeably, they are not. The first concept is quite broad and implies supervising all aspects: from what is left in your warehouse to what and in what volume you need to order. There are various inventory management system examples, but these are common: manual, periodic, and perpetual. The most effective is the last one since it allows you to analyze data in real-time.
What is inventory control? It is a narrower term. The control process only starts when items arrive at your warehouse or store. As part of it, you allocate your inventory and plan for efficient use to prevent dead stocks from forming. How to do inventory control? As soon as you receive products and ingredients, you need to inspect and sort them using modern techniques. Choosing the right technology and software ensures the smooth operation of the company and the fulfillment of customer orders on time. Once a client has purchased one of your products, the level information is updated. And so on until it reaches the reordering point.
How to track inventory effectively?
Controlling even small business stocks on your own and manually can be daunting. In it, you will be assisted by special software. However, you should also adhere to the following effective practices:
- FEFO approach (“first-expire, first-out”);
- JIT strategy (stands for “just-in-time”);
- demand forecasting;
- regular audit, for example, once a year;
- ABC analysis or prioritization of goods by groups;
- 80/20 principle;
- KPI analysis.
The best way to keep inventory up to date is to use cloud-based solutions. Thanks to this feature, you can get data wherever you are and from any device. Moreover, other employees can also work on inventory and perform tasks based on the access you have assigned them.