10 Tips to Reduce Inventory Costs

In a world where cutting costs and minimizing losses is becoming more and more important, we’ve come up with a list of 10 tips to help reduce preventable inventory losses and maximize your value on return.

  1. Keep Waste Logs
    By keeping waste logs, you’ll be able to track where you’re losing money, and where your processes can be fine tuned; whether that’s through recipe costing or physical process enhancement, there’s always areas that can be improved upon, which leads into our second point.

  2. Analyze Your Operations for Weak Points
    Look at your operations from the top down, including everything from when the inventory is ordered and received, to when the customer’s order is placed, all the way through to when the customer receives their meal. By performing a critical analysis, you can see where there are areas that inventory losses can be avoided, whether that be through misuse, spoilage due to over-ordering or incorrect preparation. Finding the weak points in your chain can make inventory management much easier and efficient.

  3. Date and Time Labels on Ingredients
    In order to avoid ingredient spoilage, the most effective, and simplest, way of doing this is to place dates and time of when the ingredient was either received at your location, or when the product was prepared. By doing this, you’re able to ensure that your oldest product is used first, and avoiding large amounts of spoilage. If a product has been continually underused and gone bad, it may be time to remove that item from your menu.

  4.  Using Store Brand Ingredients
    If you’re able to use store brand ingredients without compromising your product’s quality, and are able to get them at a cheaper price than your current supplier, this is one very effective way to cut inventory costs. This will bring your recipe costs down, while maintaining a healthier margin.

  5.  Recipe and Menu Costing
    If you’re not costing out your individual recipes and overall menu, you could be losing thousands, if not tens of thousands, of dollars each year. With accurate recipe costing, you can save upwards of 7%, if not more, on your food cost.

  6. Negotiate with Suppliers to Buy in Smaller Pack Sizes
    If you’re using less of one ingredient, and the rest is going to waste before you can use it, see if you can negotiate with your suppliers to buy in smaller case sizes. By doing this, not only do you lay out less cash in the short term, you also don’t risk wasting product and throwing money down the drain.

  7. Ensure Staff are Properly Trimming Meats
    While staff in the kitchen are typically well trained in their craft, ensuring steaks and other cuts of meat are properly trimmed to hit their maximum yield will help keep your inventory costs down, as improperly trimmed cuts will either anger customers, or be laid by the wayside to go unused.

  8. Shrink Your Portion Sizes
    As 17% of diners’ food goes uneaten (SOURCE), shrinking your portion sizes will not only make your margins larger, it will allow you to maximize the number of dishes that can be prepared from the same order size of ingredients.

  9. Ensure Your Recipe Book is Up-to-Date with the Latest Preparation Methods
    A small yet crucial detail in cutting inventory losses is ensuring the preparation methods your kitchen is using are in sync with those in your inventory management system. The slightest deviation between the two can lead to large losses on individual dishes, and your net revenue.

  10. Use a Security System
    While no one wants to believe that their staff are stealing product, it does happen. By pairing inventory management software like Optimum Control with a security system such as Solink, you’re able to pinpoint where your losses are coming from, and investigate further as to whether it was misuse, a mistake, or theft, and act accordingly.


Utilizing these tips while using inventory management software will help your business minimize preventable inventory losses, and allow you to maximize your profit-making potential.

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