Effective inventory management is a tough nut to crack for most restaurant operators. Order too much, and you’ve overspent on ingredients that will simply go to waste. Order too little, and you’re forced to tell customers that their favourite dish is unavailable. Not ideal.
But there’s a way to optimise inventory management to avoid both of these situations.
The solution?
Using stock management software.
By the end of this article, you’ll know why stock management software is such a valuable tool for restaurants. But first, let’s clarify what this technology actually is.
What is restaurant stock management software?
Restaurant stock management software (or inventory management software) is a tool for tracking, managing, and optimising your restaurant inventory. It helps restaurant owners manage stock levels, ensuring they have the right ingredients to meet customer demand.
It also tracks costs and vendor prices, allowing you to maximise profitability across the supply chain. For example, if vendor prices go up, you can see it instantly in the software. Then, you can step in to renegotiate or source a new supplier.
Why restaurant owners love stock management software
There’s a reason why xxx restaurants are using technology to manage inventory. It comes with a whole heap of benefits that improve your operations and boost your bottom line — from inventory accuracy to overall profitability.
Let’s take a look at some of these benefits (and a few others) in more detail.
Improve cost efficiency and profitability
When you can track and manage your inventory accurately, you save money.
How?
By minimising over-ordering.
Think about it. When you order the ingredients you need to meet demand, you reduce the amount you spend on ingredients. Your profit margins increase because your overall costs are lower.
Stock management software also shows you which menu items perform well and which don’t. As a result, you can refine your menu and make better purchasing decisions that increase profit margins. Result.
Reduce food waste with optimal ordering
Inventory systems are an incredibly valuable tool for reducing food waste.
By accurately ordering the food you need, you minimise the amount you throw away. Not only does this reduce your carbon footprint (by preventing food from going to landfill and reducing food transport emissions), but it also brings your costs down.
It also helps you keep an eye on your existing stock. Think about tracking expiry dates as an example. With technology, you don’t have to worry about manually tracking expiry dates — it’s all in the system.
You can even set automated notifications to remind you when certain items are nearing their expiration. Then, you can replenish your stock levels before it’s too late.
Consumers are also making more environmentally conscious decisions than ever before. By reducing your food waste, you show these consumers that you’re doing your part to be a more sustainable operation. It’s good for your brand reputation and it helps the planet. Win-win. 🌎
Nory success story 🥳 See how CUPP has reduced its total food waste by 60% (from 3-5% to 0.5-2%) across the business since working with Nory.
By monitoring food waste at both a CPU and site level, CUPP can easily spot how to make improvements — whether that’s reducing the amount of ingredients sent to the CPU or liaising with individual franchises to find out why their waste levels are higher than expected.
Nory CPU has streamlined how our franchisees and stores order to us and how we get information back to them. If things are out of stock or if we need to update something, it’s quick and easy to do it.
Paul Tanner, Managing Director at CUPP
Enhance decision-making with data analytics
This is really one of the benefits that’s changing restaurant operations for the better. With stock management technology, you have access to valuable data and insights that can empower your restaurant operations.
Here are a few examples:
- Identifying high-performing products. Automatically pinpoint which ingredients have the highest markup so you can optimise your menu accordingly.
- Predicting future demand. Keep track of sales and performance to ensure you order the right ingredients to meet customer demand.
- Optimising supply chains. Identify areas where you can cut costs in your supply chain to improve your bottom line.
All of these examples show the power of inventory data. With accurate, real-time insights, you can make smart and informed decisions that increase your profits and keep your bottom line looking healthy.
Nory success story 🥳 Find out how Rocksalt improved its supplier management with Nory’s AI-powered technology. The multilocation cafe and restaurant can now accurately track prices and supplier costs in real-time, allowing them to make instant changes to optimise spending.
“Because all the ordering and invoices are updated daily, we can catch a price increase from a supplier pretty much instantly. As soon as we spot it, we can react to it immediately.” – Stephen Burns, Group Operations Manager at Rocksalt.
Save time by centralising all your inventory management efforts
Question for you: How much time do you spend managing your inventory? If you’re doing it manually, chances are it’s taking up a lot of time.
In fact, Stephen Burns from Rocksalt said he spent almost half of his time managing supplier prices before using Nory:
I would’ve previously spent around 50% of my time trying to manage pricing from suppliers. Now, it’s a 10-minute job because I can see the price changes instantly, pick up the phone, and take action.
As Stephen discovered, using stock management technology frees up a whole lot of time. For example, you can automate parts of the inventory management process, scheduling orders and settling invoices without doing it manually.
You can also handle all your inventory in one location. With Nory, for example, all inventory costs and stock levels are in the same system. At one glance, you can see exactly what you have on the shelves and what you need to order to keep up with demand.
Hot tip 🔥 For the best use a system that allows mobile and remote access, like Nory. That way, you can stay on top of inventory at any time — even when you’re not physically present.
Or if you’re busy on the restaurant floor, you can easily whip your phone out of your pocket for a real-time update. You don’t need to find a computer and sit down at a desk to see these valuable insights.
Satisfy customers through better inventory control
When you optimise your inventory management, customers have a better dining experience.
For one thing, they get a speedier service. When you have an efficient stock management system in place, you also have smoother operations in the kitchen. Staff can easily see what ingredients you have, where they’re stored, and so on. This leads to faster order fulfilment.
Stock management systems also make sure that you have the right stock levels, ensuring key menu items are always available. Put yourself in the diner’s shoes for a second — how would you feel if a restaurant ran out of its best-selling cheeseburger? You’d be bummed out.
But with stock management systems, you can reduce stockouts and prevent disappointing guests.
Take a look at Nory as an example. Our AI-powered software predicts future demand based on previous sales, performance, and external factors (like local events and weather forecasts).
With this information, we predict how much inventory you need to cover the footfall in a given period. As a result, you optimise your inventory orders to make sure you have enough ingredients to meet this demand.
Overcoming stock management challenges with Nory
Worried about implementing new systems into your restaurant operations? Aligning different systems and understanding how to use them effectively are a couple of the challenges that spring to mind. Plus, it’s vital that data remains secure during the transition.
We get it — it’s a lot to handle. And that’s why we have the infrastructure in place to make the transition as smooth as possible.
At Nory, we streamline the entire onboarding process. You and your team can quickly adopt and integrate our system into your existing operations, and we’ll be with you every step of the way to answer questions and provide support.
And when things are up and running? We’ll still be around to help. We have regular check-ins, conduct performance reviews, and continually optimise the system to give you the best results.
In other words, we do whatever we can to make sure our software provides you with the information you need, when you need it.
The level of service we’ve received from Nory has made implementing the system so much easier. Whenever we have questions, we get quick and helpful responses from the team.
Kallie Kocourek, Vice President of the UK Market at Roasting Plant Coffee
Restaurant stock management FAQs
How do restaurants manage stock?
It depends. If they’re doing it manually, it usually involves tracking inventory in some kind of spreadsheet and manually updating it whenever they get a chance. Spoiler alert: this is never as often as they’d like.
If they use stock management software, the process looks a little different. The system handles most of the legwork, tracking inventory levels, performing stock counts, and ordering supplies based on customer demand.
What is the best inventory method for restaurants?
Again, it depends on the restaurant. Generally speaking, most restaurants use the first-in, first-out (FIFO) approach, which prioritises using the oldest stock first to minimise spoilage and waste.
Find out more about FIFO and other inventory management techniques.
How much does a stock management system cost?
Some restaurant operators are concerned about the cost of implementing new systems, and we totally get it. Margins are thin, so you have to be cautious.
These systems aren’t free. We can’t say exactly how much it costs as it varies from supplier to supplier — but what we can say is that it’s important to consider the long-term cost savings of using them. You may have to pay an upfront cost to use the system, but how much will you save over time if you can prevent over-ordering and maximise your profitability?
