Restaurant inventory management: what small businesses really need

What inventory management means in a restaurant

Inventory management sounds like software. But first and foremost it is a chain that exists in every business, with or without a system. It has six links:

Highlighted in orange is what Pelican covers. At goods in, items are ticked off but no stock is booked. For analysis, the order history provides quantities and spending, but no recipe costing. A classic inventory management system covers all six links, as long as it is maintained.

An inventory management system (often just called stock control software) is the attempt to map this whole chain in one piece of software and make it able to answer questions at any time. The key question for your business is not whether the chain exists. It does. The question is which part of it you want to map digitally and what price you pay for that in working time.

What a classic inventory management system does

A full restaurant inventory management program can do a lot, and rightly so:

• Real-time stock levels. In theory the system knows at any moment how much beef fillet is in the building, because every delivery and every withdrawal is booked.
• Recipe management and costing. Every dish is linked to stored ingredients with quantities and prices. If the price of butter goes up, you see straight away which dishes get more expensive and where your margin disappears.
• Integration with till and suppliers. Selling a dish at the till books its ingredients out of stock. Orders go electronically to the wholesaler, price lists come back automatically.
• Automatic order suggestions. From minimum stock, previous weeks' usage and lead time, the system calculates what needs reordering.
• Stocktake support. Count sheets, expected-versus-actual comparison and shrinkage calculation come straight out of the system.

That's not marketing, it works. As long as the data is right.

The catch: maintenance

An inventory management system is only as good as its data. And every one of these functions assumes someone keeps feeding it:

• Every delivery has to be booked in, including the two cases of salad the rep brings along at lunchtime.
• Every recipe has to be set up and maintained, even when the sous chef spontaneously uses girolles instead of button mushrooms today.
• Every withdrawal has to be recorded, including the cream the commis grabs from the walk-in in the 7 pm rush.
• Every price change has to be entered, or the system calculates with figures from the autumn before last.

In a kitchen with five people and a full house, that simply doesn't happen. Not out of laziness, but because between lunch and dinner service nobody has time to fill in a form. Almost everyone who has tried knows the result: an expensive system, stock levels weeks behind reality, and a team that no longer trusts the numbers. In the end someone counts the walk-in by hand again, and the software is a licence that keeps running on subscription.

The pragmatic start: get the ordering process under control first

For everyone else, it is worth taking an honest look at where the pain really sits day to day. And it almost never sits in stock levels. It sits in ordering:

• Items have been forgotten because nobody wrote them down. No cream on Friday night.
• Double orders, because two people reported the same thing independently.
• Notes on three different doors, illegible, without quantities.
• The head chef retypes everything in the evening.
• Once the order is placed, the list is gone. Nobody knows any more what was ordered, when, from whom and at what price.

At a rough estimate, a good 80 per cent of the daily hassle is here, and none of these points needs stock control. They just need one shared list everyone can write to, and a memory.

This is exactly the part Pelican digitalises, without anyone having to maintain anything extra. The kitchen team captures the need the moment the gap is noticed, by voice from their own smartphone. Each in their own language: tomatoes, pomodori and Tomaten end up as one entry. The list sorts itself by category, and the head chef reviews and approves it before the rep visit. The order history builds up as a by-product and shows the owner what was ordered, when and from whom.

The difference from a full system lies in the words "as a by-product". Nobody books anything, nobody maintains master data. The data is created as a by-product of work the team does anyway. That is exactly why it is still there after three months, while the stock levels in an unmaintained inventory system have long since become fiction.

Comparison: full system or lean ordering app

The table shows no winner, just two different tools. A full system answers the question "What do I have in the building and what does my dish cost me?". An ordering app answers the question "What does my kitchen need and what have I ordered?". The second question comes up every day; for many businesses, honestly, the first comes up once a month when calculating food cost.

Deciding in four questions

Before you get quotes for inventory software, answer these four questions honestly:

• Do you need up-to-date stock levels? Not "it would be nice". Rather: do you make decisions that go wrong without live stock figures?
• Do you cost recipes systematically? Really every dish with stored ingredients, not a rough estimate once a year?
• Do you have a person who maintains data every day? With time for it on the rota, not "the boss does it in the evening".
• Where do you actually lose money day to day? Through wrong stock figures, or through forgotten and double-ordered goods?

If you answer no twice to the first three questions, don't buy a full system. It won't be maintained and won't give you figures you trust. Start with the ordering process. It brings calm immediately, costs a fraction and creates, as a by-product, the history you can use to control your food costs. If you grow in two years' time and need an inventory system, you take that step with a team that has long been used to ordering digitally.

Restaurant inventory software FAQs

Part of the complete guide: Restaurant purchasing. It covers all six stages of the purchasing cycle at a glance.