Industry News, IT Solutions
Surviving the Supply Chain Crisis With Smart Inventory Management Software
As customers return to their favorite bars and restaurants, restaurant owners are feeling the strains on the food supply chain through rising costs and widespread shortages. The COVID-19 pandemic has disrupted global supply chains at an unprecedented level, and with no end in sight — at least for the short term — restaurants must adapt and adopt inventory management practices that will help them survive an extended supply crunch.
FAST FACTS (Via the National Restaurant Association):
- 95% of restaurants have experienced significant supply delays or shortages of key food items in recent months
- 75% of restaurants have made menu changes because of supply chain challenges
- Wholesale food prices increased sharply in September 2021, posting the highest 12-month increase since 1980.
- Restaurant commodity prices are soaring with beef up nearly 60%, fats and oils up 50% and eggs up nearly 40%.
- Menu prices have risen 4.7% in the past 12 months alone.
While you can’t control the restaurant supply chain, you can prepare yourself and your restaurant to respond smartly when things go up, down or sideways. With the right technology, restaurants can be more responsive and agile to the types of logistical challenges a crisis like this creates. Inventory management can be accomplished with spreadsheets and manual counting. But inventory management software helps ease the process and more accurately count and track your products. Using data from your restaurant’s integrated POS system can help you sync up supply and demand, optimizing operations while also reducing costs and kitchen waste.
Benefits of Inventory Management
Due to the short shelf lives of a restaurant’s inventory, even small changes in price can have a major impact on your restaurant’s profitability.
Restaurants are most likely to find long-term success if they practice effective inventory management. A thorough understanding of the products your restaurant uses (and at what frequency) will help you meet customer demand and increase profitability while also avoiding spoilage/loss and decreasing your overall cost of goods.
How to Choose an Inventory Management System
Inventory management software can offer insights that manual tracking simply cannot provide, by connecting back-end financials, POS and inventory via a cohesive cloud system.
Here are a few benefits of implementing an effective inventory management tool.
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- Real-Time Tracking: Connects to cloud POS system for real-time inventory updates with every order, while largely eliminating the risk of human error.
- Financial Assessments & Reports: Provides detailed reports on the most popular and most profitable menu items.
- Automatic Purchasing: Allows for automated purchasing once items are depleted to a predetermined level.
- Forecasting: Helps restaurants forecast demand and update their offerings based on changing customer taste, previous trends, seasonality and other conditions.
- Improved Vendor Relations: Mismanagement in the inventory results in cash flow problems and negatively impacts relationships with vendors.
The future is clear for the restaurant industry. For long-term stability and success, restaurants must use technology to regularly monitor revenue, cost and inventory, as well as customer perception and preferences. These daily business metrics can offer informed insights that will help keep costs down and profits up while cultivating loyal, repeat customers.
Inventory management is critical to running a successful restaurant and its many moving parts. Whether you’re looking for a completely new inventory management system or something that will integrate with your existing cloud POS system, we can help. Our team of experts can help you think about the needs of your restaurant — now and in the future — and best practices for integrating inventory management software into your existing restaurant technology.