Enterprise Resource Planning (ERP) Systems for Restaurant Inventory Management

Enterprise Resource Planning (ERP) Systems for Restaurant Inventory Management

Establishing a restaurant inventory management system should be one of your priorities as part of the top management. An effective system can help you and your entire business to operate successfully.

An important aspect of running a restaurant is online food ordering system. Your inability to manage yours could have serious consequences, such as financial and operational issues.

For this reason, developers of industry technology are constantly exploring new approaches to make this tedious process more fun and engaging for everyone. Several software and solutions have been introduced, which have been proven helpful for business owners like you.

In this article, we will discuss how an Enterprise Resource Planning, or ERP System can help you with managing your inventory. This software is already widely utilized by other retail businesses, it’s now time to learn whether it can be as effective in your restaurant.

ERP Inventory Management System

Inventory management is made easier with ERP software. Inventory tracking is easier to manage when tracking from vendor to customer through the software. Moreover, ERP software eliminates billing errors by automatically detecting multiple charges, deletions, or other billing issues.

What exactly is an ERP system and how does it work? The ERP allows businesses to control their operations, inventory, finances, logistics, planning, and finance all from a single platform.

Using this software, the entire organization can access inventory information in a real-time process. It has a central inventory management system; you will be able to see the stock requirements of other branches, should you run multiple branches. Whenever a reorder level is reached for a particular ingredient, you will be notified in real-time.

Additionally, items can be managed concerning their shelf life and expiration dates. This ensures that you never run out of stock in your kitchen or have extra stock lying around.

Furthermore, it facilitates consistent quality, quantity, and flavor throughout all branch locations. The central recipe management allows you to update items, which are sent to all branches immediately, so the food items provided to customers are consistent.

A business that wishes to expand, operate in "just in time" mode, sell many products, create complex workflows or supply chains, need automation, or wants to maximize the value of their inventories can utilize this capability.

Basic Features of ERP Systems for Management of Inventory in Restaurants

This tool could serve as one of your main back-of-the-house operations support. You have to make sure that you’ll be selecting the one that will work best with your needs and current business model.

You have to be prudent in choosing, and make sure you’ve done your research. To help you come up with an informed decision, here’s a list of the basic features you should look for in this kind of system.

  • Order fulfillment for multiple branches (locations)
  • Inventory monitoring and tracking
  • Purchase management
  • Warehouse and transfers management
  • Multiple and secured payment gateway
  • B2B and e-Commerce capabilities
  • Accounting, operational, and e-Commerce integration
  • Data analysis and reporting capabilities

Keep in mind, whatever works for others may or may not work for you. Avoid relying on suggestions and references as you’ll only receive the brands that worked for others. Understand how your operations go, and see what improvements you can make.

You also have to understand that while other software and tools are available for your use, it doesn’t necessarily mean that you have to deploy everything in your business. Make sure that you’ll invest wisely and just go for the solutions that will address the needs of your restaurant.

Benefits of an ERP Inventory Management System on Restaurants

Every business is taking greater heights when it comes to managing its inventory. A well-known multinational distribution and outsourcing company, Bunzl, started using AI to handle its inventory. Quite a great leap, right?

While AI also has its advantages, we’re here to discuss how an ERP System can help your restaurant optimize your inventory. Here’s an outline of how it functions in a restaurant setting.

Accurate reports

As a restaurant owner, having a system that can provide real-time and accurate reports can give you a huge advantage. Through this, you can leverage all the data in your hands for the benefit of your business.

You’ll be able to generate detailed reports about your sales, Stock Keeping Units, Cost of Goods Sold, and other information you can extract from your inventory.

Improved purchasing process

Through this system, you’ll receive timely notifications and updates regarding the status of your stocks and inventory. This goes with your suppliers as well. Syncing your shipping and order information allows you to monitor your purchasing process well.

By integrating back-end systems and communicating directly with partners, you can reduce potential disruptions, such as not receiving a critical ingredient when expected or having the price for the product be higher than expected.

Efficient stock control

Being a restaurant owner makes you understand the importance of your stocks. Under-stocking can cause menu confusion and upset customers. Stocking too much food can lead to food wastage and spoilage.

Both circumstances negatively affect your operations. It tracks and reports inventory shortages, overstocks, scheduled replenishments, obsolete inventory, and metrics, like the average inventory turnover rate. It keeps track of product transfers during shipping and receiving in the warehouse, and produces reports about it.

Effective quality checks

It is possible to configure quality control for inventory with most of these systems. The system checks for safety information on a product if it needs to comply with specific environmental requirements, for example. As soon as the system identifies an item as nonconforming, it will notify staff who can update it.

Easy inventory planning

Using the ERP, per-item and per-ingredient inventory statuses are listed for each product, enabling staff and suppliers to monitor on-hand stock and order numbers. Planning becomes easier and customer satisfaction increases when inventory and metrics are easily accessible.

Restaurant ERP Inventory Management System Requirements

This software provides a simpler way to handle your inventory, but how will you be able to do it? Upon installing it or integrating it on your POS System, what’s next? Of course, like other solutions available, it will require you to set up a certain order of data about your restaurant.

  • To begin with, place all ingredient orders through your ERP system. Therefore, you will have no more phone calls or emails, nor will there be any WhatsApp requests for purchases.

To ensure proper use of the ERP system, train your employees correctly. As restaurants have a high turnover rate and employees traditionally lack the latest technology skills, this training will likely take some patience and attention.

  • We recommend that you hire someone conscientious about keeping product names, unit prices, and measurements current. The average restaurant inventory exceeds 600 SKUs, all of which must be uploaded into the ERP system. ERP systems often offer to scan functionalities as part of the initial setup.
  • Each time the receiving staff receives a delivery, they must verify the quantity and unit prices by referring to the ERP system. Staff should correct any disparities during delivery. However, adding this duty to existing duties may complicate the responsibilities of management.

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