Best Practices for Food Industry Inventory Management

Do you know what’s most common in the food industry? No, not food or anything else. It’s Wastage: yeah, that’s undoubtedly right.

If you are in the food industry, then it’s impossible for you not to know this. A food-related business doesn’t only rely on selling. It depends on selling and timing both. Along with that come freshness, margins, and keeping lots of moving parts under control at the same time.

People who manage restaurant chains, bakeries, or food distribution companies, especially in the UAE, are well aware of this. They know one bad inventory decision can throw off the entire operation.

In this industry, challenges never end. Unsold and rotten food products with short shelf life, often fluctuating demands, and customer expectations, everything is there. That’s why food businesses across the GCC are rethinking how they handle stock while leaning towards Inventory Management Software.

Top 4 Effective Ways to Manage Inventory in the Food Industry

FIFO AKA “First-in, First-out” means you focus on selling the product first you made or purchased first (old products). The answer is in the name. It helps to make space in the inventory and reduce wastage. Remember, every time it’s not possible to sell those old items first. But a reliable Inventory Management System efficiently helps you to track those items so that you can make the right decision at the right time.

2. LIFO Method

LIFO or “Last-in, Last-out” inventory is something that has both positive and negative sides for the food industry. The positive side of the coin is that your customers are getting the fresh products. You’re selling the products you just got. But the drawback is that sometimes it may increase wastage and cost. It’s not new in the food industry that businesses ignore the oldest items in the excitement to use the latest items, leading to those products expiring. Though it’s not mainly suggested for the food industry, you can still take advantage of this strategy by utilizing an inventory tracking system.

3. FEFO Method

FEFO means “First-Expire, First-out”. It seems to be similar to FIFO; there’s a difference. Generally, FEFO prioritizes stocks that are about to expire. By selling the products that are close to their expiration date, this process lets businesses minimize wastage. A stock control software can help you by providing instant details of the inventory.

4. JIT Method

This is one of the best methods to eliminate wastage. Here JIT stands for Just-in-Time Inventory. It’s especially salient for the food industry. This method allows businesses to order just the required product at the time it’s needed, not more, nor less than that. JIT will work more efficiently with a good  Inventory Management Solution. Overall, it reduces the time you spend unnecessarily managing inventory manually.

Some Other Methods

Apart from the previous methods, these processes can also help you manage your inventory.

Automate Everything

It’s boring, time-consuming, and risky to record and manage everything manually, especially from several places. Those hours are better spent improving operations or serving customers. Automation through automated stock management tools is your first step to eliminating manual work while centralizing inventory data in one place.

This automation:

• Deducts stock count automatically after every sale.

• It can send expiry alerts so you can stay up-to-date.

• Besides, it triggers purchase orders when minimum stock levels are hit.

And when these are part of an ERP inventory module, finance and sales also stay in sync automatically without endless reconciliations.

Manage Your Stock with Instant Visibility

Food businesses that operate with multiple outlets and mismanaged warehouse practices will definitely affect profit, at least for once. It’s almost impossible to take care of all the outlets manually, and knowing what’s in the stock and what’s not. A modern warehouse management system can fix the problem.

Here’s How It Helps:

• It increases product traceability.

• You can stay compliant.

• It lets you know about a product’s shelf life and expiration date.

• You can monitor the temperature of your warehouse.

• Overall, it reduces costs and waste.

Here is what you can do by yourself:

• Start by labeling your stocks clearly.

• Create a separate zone for temperature-sensitive goods.

• Prevent cross-contamination.

Lastly, use a barcode inventory system so your team can track products at every step of unloading, shelving, and picking with ease.

Cloud Inventory System for Growth

If you are running a single outlet today but planning to expand tomorrow, then don’t go for tools that’ll hold you back in the future. Instead, go for a cloud inventory system that’ll grow with you.

It helps teams from every location work off the same live data. This means everyone from specific locations has access to specific data without worrying about syncing and duplicate records.

Manage Your Supply Chain

Inconsistent suppliers are a silent threat to the F&B (Food & Beverages) industry. Late deliveries or unexpected quality issues can ruin the production schedule and reputation. Culinary enterprises can handle this best with integrated supply chain management software. 

You can get an instant view of incoming deliveries, vendor performance, and lead times with this integration. Apart from that, it allows you to set up automatic reorders when stock levels decrease.

Inventory Control Software & Forecast

Foodservice operations can’t afford to overstock or understock at all. It’s salient to predict demand as accurately as possible. If you’re in the same industry, then there already is a sales history. Which means you already know your seasonal highs and lows. But how to use that data? Well, a modern inventory control software can help you to predict demands by analysing trends with surprising accuracy.

Here comes a trick. It doesn't matter if you have the best inventory management software or not; if your employees are unable to use it, it’s good for nothing. So, don’t just stop by purchasing the best inventory optimization software; go ahead, train your team, and enjoy the benefits together.