Inventory Optimization Software: Buyer's Guide

According to a Toast survey, the number one difficulty for both successful (39%) and no-growth (47%), restaurant businesses is excessive food costs.

Approximately 10% of food in a typical restaurant is wasted before it ever reaches a dish, which makes this obstacle much more difficult to overcome.

This is an unrecoverable expenditure created by huge servings, long menus, and the inefficiency of the kitchen staff. All of these issues can be discovered and controlled by using sound inventorying procedures.

Technology, which enhances both customer service and kitchen display systems, has played a driving role in the restaurant industry's change in recent years, with 95% of operators admitting that technology increases overall efficiency.

What is Inventory Optimization?

Inventory optimization is a compilation of the best ways for businesses to spend less money while having a sellable inventory. Inventory management concerning the volatility of supply and demand is an important point.

It is a technique for reconciling investment restrictions with business goals and fulfillment targets over a wide range of inventory stock-keeping units.

Inventory optimization keeps warehouses and supply networks running and helps businesses preserve liquidity. It assists firms in determining the appropriate quantity to purchase for stock-keeping units, allowing them to have it readily accessible for rapid order fulfillment, and reducing surplus inventory that becomes outdated over time.

Understanding Inventory Optimization Software

Restaurant inventory optimization software tracks inventory down to the ingredient level and easily connects data to recipe preparation, food pricing, buying, receiving, and counting processes. 

These sophisticated technologies assist busy pubs and restaurants in ensuring that ingredients are available to meet daily demand.

They also aid in the reduction of losses caused by over-ordering, waste, and theft. 

Most include built-in POS capabilities or links with leading POS systems to expedite operations and provide managers and owners with real-time visibility into all aspects of the organization. 

Consider inventory optimization software to be your digital sous chef, meticulously monitoring your restaurant's inventory, decreasing waste, optimizing purchases, and offering actionable insights - all on a clean, user-friendly platform.

Here are its  main components:

Inventory Tracking

Inventory tracking is one of this software's most important functions.

It gives real-time stock-level updates, so you always know precisely what you have on hand. This enables you to place orders on time and prevent running out of critical components or, worse, overstocking perishables.

Automated inventory management software has completely changed the restaurant sector as a result of the fact that it eliminates all inventory-related issues. 70% of all food products that exist are wasted before they ever even hit the customer's plate.

Thus, with inventory tracking, restaurants can now reduce food loss and other expenditures.

Batch and Expiry Tracking

This is one of the most significant inventory optimization approaches for food-related firms. Fresh food, for example, is particularly vulnerable to deterioration owing to inappropriate storage conditions.

In the case of contamination or spoiling, you must be prepared to do a product recall to retain your goodwill and keep customers.

Batch and expiration monitoring will allow you to track the incoming and exiting goods on a batch-by-batch basis, allowing you to utilize or sell older products first - the FIFO (First In, First Out) approach. This will assist you in avoiding spoiling.

Accurate Demand Forecasting

Demand forecasting is another important feature.

The program can forecast what materials you'll need and in what amounts based on prior sales data, trends, and even seasonality. This function lowers occurrences of excess or deficit by eliminating guessing.

Secondly, demand forecasting assists with day-to-day operations. Looking into the demand for various meals and other items might help a restaurant make better ordering selections.

It also assists in making personnel choices, such as how many workers to recruit and how many shifts to schedule. Demand forecasting incorporates data gathered throughout the restaurant's operation as well as data from other sources such as industry rivals or general economic trends.

Waste Tracking and Reduction

In the restaurant sector, waste is a major problem. Inventory optimization software detects waste trends, enabling you to alter your ordering and consumption methods appropriately. Less waste equals greater savings and a cleaner business.

Food prices typically range from 28% to 35% of a restaurant's overall costs. When food is lost or spoils, the number rises. When restaurants buy food, around 4-10% of it is wasted before it reaches the customer.

This occurs when they buy too much food at once, and it spoils before it's utilized. Proper food and inventory optimization might help to reduce this loss.

Efficient Supplier Management

Most restaurants get their goods from certain providers. Inventory optimization allows you to keep track of meals and purchases, payments, and more.

Restaurants can use inventory optimization to monitor their food and purchases more carefully, enabling them to better manage purchases and vendor payments.

Benefits of Inventory Optimization Software for Restaurant Managers

Here are some of the primary advantages it provides:

Efficiency and Accuracy in Inventory Optimization

One of the most significant advantages of this program is increased efficiency and accuracy in inventory monitoring and forecasting.

You can get an exact, real-time overview of your inventory levels, making ingredient optimization a breeze and leaving no space for errors.

Inventory optimization in integrated working capital optimization software delivers more accurate inventory data since it is updated in real-time as soon as a transaction happens, eliminating the need for manual input and decreasing mistakes.

Minimizing Food Waste and Spoilage

Inventory optimization in logistics can boost the efficiency of your organization by regularly monitoring stock levels and being informed of what items are in stock and where they are situated.

The software reduces food waste and spoiling by optimizing inventory levels based on precise predictions. It's like having a crystal ball that tells you what you need and when you need it.

Cost Savings

Inventory optimization can save you money on storage costs and reduce waste.

You can continue to keep an eye on inventory levels and order just what you need.

In the restaurant industry, the two biggest detractors of profitability are overstocking and stockouts. You can achieve a perfect balance using inventory optimization software, resulting in significant cost savings by avoiding these challenges.

Improved Profitability and Cash Flow Optimization

In the food sector, the profit margins can be very thin, and at the end of the day, there’s very little profit on each menu item.

This means even a minor error in inventory management or a prediction of underestimating quantity could heavily affect how much profit your business earns. Restaurants in which you enjoy profit from every menu item must perform their inventory properly.

Proper restaurant inventory management apps can guarantee that your company profits from each menu item.

The total cost of products sold is a significant factor in determining net profitability. Inventory optimization reduces waste, which reduces the cost of items supplied and, as a result, enhances profitability.

The software's direct and indirect advantages, such as reduced waste and appropriate stock levels, all lead to increased profitability. Furthermore, it helps with cash flow optimization by allowing you to invest in goods wisely.

Choosing the Right Inventory Optimization Software for Your Restaurant

Scalability and Customization

When choosing the software for the business, the availability of scalability and customization options are two important factors to consider.

The software should — and hopefully will — be able to scale as your company grows and adjust to changing requirements. It should be able to manage a growing number of orders, tables, and clients while maintaining performance.

Furthermore, it should have customization choices that enable you to adjust the software to your individual needs and processes.

Features and Functionality

The second key element to look at is the software's features and working.

For a successful restaurant operation, there are table management; reservation systems, menu management, inventory control, personnel scheduling; reporting and analytics; online ordering integration; and customer relationship management (CRM) technologies. It should also be easy to use for staff as well as the consumer.

Integration and Compatibility

It should also go hand in hand with other systems within your business including POS systems, accounting software, online ordering platforms, loyalty programs, and third-party delivery services. 

With this connection, we know that data will flow as it should, especially avoiding human input mistakes, and will generally operate more efficiently.

Cloud-Based vs. On-Premises

Then again, you should also consider whether you want your restaurant management software hosted in the cloud or on your servers.

However, there are many benefits with cloud-based solutions such as remote access to storage from anywhere you have an internet connection, automatic updates, an automatic backup and recovery of your data, and scalability without new hardware investments.

On the other hand, in-premise solutions give better control over data protection especially when the business has a stringent compliance need

Training and Support

The success of any restaurant software system depends on proper training and continuous support. Find a provider that will put your employees through extensive training so they can utilize the software to its full potential. 

Think about the vendor's technical assistance as a whole, including their availability, response speed, and communication channels.

Use Xenia for Inventory Optimization Software Today!

The strategic choice to embrace technology and remain ahead of the game is made when restaurant managers consider the rising relevance of inventory optimization software and the multiple advantages it offers. 

Inventory optimization software, such as Xenia, provides many benefits that are specific to the restaurant business, including more efficiency, lower costs, better decision-making, and more profits. 

It helps you save time and effort while simultaneously providing you with data you can use to make better long-term choices.

Because of its intuitive design, Xenia will be a breeze for your team to implement. Its robust features make it the perfect tool for restaurant managers to keep tabs on inventory, predict demand, cut down on waste, and manage vendors. In addition, it provides a one-stop solution for all of your restaurant's POS system integration needs.

Don't allow problems with stock control to hinder the growth of your restaurant. 

Learn how inventory optimization software may revolutionize your restaurant's administration. Try Xenia risk-free with a trial and see for yourself how it may improve your eatery!

FAQs

What is the difference between inventory optimization and inventory management?

Inventory optimization and inventory management are two very distinct but closely related elements of supply chain operations.

Another instance where the term inventory gets used is in inventory management, which is the process of overseeing the entire cycle of existence passing by way of a company's products which includes procurement, storage, and dissemination to guaranteeing that there is enough products outstanding at the ideal time.

It deals with reasonable stock levels, control of holding costs, and avoidance of stockout.