The idea of inventory management usually conjures up images of big shipping warehouses and large storage facilities, but actually it comes in many forms and even applies to the hospitality industry. Particularly with businesses like hotels, restaurants, casinos, coffee shops, bars or any other food and beverage industry catering to customers. The challenge is that there are many inventory headaches implicit in managing this process, particularly when it comes to dealing with perishables. This often requires dedicated inventory staff or a management partner in order to give the business owner confidence that waste is being reduced, the state of the business is clear and that customers remain happy. So what are some of the key inventory headaches facing the hospitality industry and what can be done to solve them?
1. Lacking price visibility
Disruptions in the food chain like harvest issues and fuel increases mean that many food staples are becoming more and more expensive. Inventory management not only looks at the number of items but the itemised costs as well. This makes it essential to understand how suppliers are planning on increasing their costs, and without a clear understanding of this, profits can be radically affected. In this way, price visibility is important in order to understand if another supplier is needed or if you need to increase your costs to the customer. By carefully evaluating the trends in your inventory management pricing, you can then proactively account for this ordinary increase in expenses.
Inventory waste is another big headache for the hospitality business. Usually, this occurs when food isn't used in time and spoils. Therefore, careful planning needs to go into the ordering and storage process in order to make sure food doesn't spoil before it’s needed. This is a real challenge as customers’ needs and choices can’t always be predicted, or those in food prep make mistakes. So the best way to ensure limited waste would be to optimise inventory replenishment. Consistently accounting for everything on the shelf and only ordering items when absolutely necessary.
3. Lack of customer insight
If you are able to really get to know your guest’s behaviour, then you can start to make educated guesses about what they will want to order and when. This will help you plan inventory as well as reduce waste. The best option is to have limited guesswork and so a good inventory management system is essential to help you identify trends within your customer base.
4. Manual inventory leads to time wasted
In this day and age, digital processes are essential to optimise your workforce and reduce human error. Conducting inventory manually is a huge commitment of time and resources, not to mention often inaccurate. Most employees would not want to spend time counting stock after a long day of work and often in spite of good intentions, at the end of the day more errors are likely to be made. By harnessing the power of tech by using bar codes, apps and automated inventory systems, you can really reduce the burden on your team and ensure that your accuracy levels improve, all at the same time.
5. Difficulty tracking goods between locations
Tracking inventory is a challenge when you have one location, but add more locations to your network and this problem multiplies. Many organisations prefer to manage this in-house to save on costs but it can often reduce inefficiencies if it is outsourced. Further to this, the team needs to track its central ordering requirements as well as monitor each site’s location and inventory use. The best inventory management systems link all this info so that the entire network can be cross-referenced and tracked in real-time. Tracking across locations can also give you essential data to allow for a location-specific change and in these cases, managers then have the ability to transfer stock between themselves and increase productivity and customer satisfaction.
The bottom line
Inventory management can cause many headaches for the hospitality industry. But with the right inventory software system, your hospitality business will be well on its way to improving its network, reducing waste, building insight into your customer and increasing productivity. All good reasons to upgrade your system and bring your hospitality business right into the future. So to fund your hospitality business in the next 48 hours, contact Merchant Capital today.