Finger on the pulse

When a large percentage of food service stock is perishable, online inventory can help operations run more efficiently—even in a pinch.

When a large percentage of food service stock is perishable, online inventory can help operations run more efficiently—even in a pinch.

Online inventory control maximises stocktaking efficiency while eliminating many factors that can destroy your business. By Miles Clarke

You may have been using Microsoft Word for years, but have you ever looked to see how many more features it has in addition to the ones you use on a day-to-day basis?

Many restaurants have inventory control software as part of their overall management systems, but are they making the most of these useful tools, which have the potential to dramatically turn around their operating fortunes?

Bonnie Ryan, the supply chain manager for Pronto Software, says an online system is the key to efficiency. “The holy grail of an efficient supply chain is having the right product in the right place at the right time. The reality for many companies is that about 30 per cent of orders have mistakes—incorrect goods, incorrect price, short supply or non-supply—that lead to lost sales and customer dissatisfaction,” she says.

When a significant proportion of the stock required for the food service sector is perishable, the need for technology to manage more efficiently is much more of a life-and-death situation than for other fast-moving consumer goods.

The popular Wagamama group of restaurants, which includes 13 national outlets and 80 worldwide, uses an online inventory control system that restaurant managers can access wherever they are via a password-controlled portal. “We encourage our managers to run their stores as if they were their own businesses,” says Jez Sykes, operations manager for Wagamama Sydney. With various levels of authority and access, all the stores’ figures are instantly available.

“We fix prices for our suppliers six months out, so when the manager orders through our Netchef system after the Sunday evening stocktake, the order goes out to the supplier, and on delivery the product is dropped into inventory.

“The price should conform to the agreed purchase price, and any variance is flagged and investigated,” explains Sykes. “After stocktaking on Sunday, a variance report, along with all the other financial information of the week, is sent to head office by 11 am on Monday.”

Sykes says the online system allows management to see consumption levels in the stores around Australia on an hourly basis. “We’re certainly able to keep our finger on the pulse of our business as a result.”

Ross Henderson, of hospitality software systems developers H&L Australia in Perth, says a holistic approach is required for restaurant control and management, with key components such as:

  • Stock-ordering generation with a combination of stock usage and par levels.
  • Integration with leading liquor wholesalers for easy tracking of goods and reduced data entry time.
  • Integrated recipe-costing software for use with food and beverage, including yield management.
  • Handling of multiple pack sizes and multiple selling portions, for example, bottle, glass and taste of wine decrements stock from the main stock item for ease of stock control and ordering.
  • Integrated to the front-of-house operations of point-of-sale bookings without any messy interfaces.

Henderson says the focus on inventory control is pivotal. “Not only does the restaurateur get the benefits of fast and efficient point-of-sale, they get the full gamut of controls and reporting in the same system.

“The beauty is that we can work with the restaurateur as they grow into the solution. They may start using purely for point-of-sale and use a staged approach to build greater controls into their systems,” he says.

Henderson says the time spent on inventory control varies, but it’s clear that if done properly there must be a commitment to time and discipline. “Time spent will vary relating to the type of menu and range of beverages available,” he says.

“Factoring in menu changes as being something happening three to five times a year, we would estimate between 20 and 40 minutes a day would achieve excellent reporting capabilities for not just sales but real profit based on stock-shrinkage issues.”

He says increases of between 1 and 3 per cent of gross profit can be achieved dependent on the restaurant’s existing processes and procedures they currently have in place.

In addition, savings of time and staff wages relating to ordering and management of stock can be significant.

At Sanyo Office Machines, Steve Grosser says running a system correctly can add 3 to 7 per cent to gross profits. “We have solutions from around $9,000 that could see a small restaurant achieve this,” he says.

“We estimate a restaurant selling around 300 covers a day would need to dedicate about one hour a day to managing the system.”

Clearly, this can be time well spent in a business sector where competitive forces can cook up the slimmest of margins.

This great content is produced for members of the Restaurant & Catering Association. Find out about becoming a member here.

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