Kitchen inventory management - Ensure production without surpluses and delays!
The opportunity to buy deliciously prepared food attracts customers and keeps them coming back again and again. Today we’ll talk about Kitchen inventory management, and how to manage the ingredients inventory for your own production so that there is enough flour in the warehouse and enough eggs, herbs, and other perishable products in the refrigerator for the recipe.
Efficient Kitchen Inventory Management is Important
The growing focus on health and wellness is leading to numerous changes in the way we live, work, and spend our free time. Food is no longer just nutrition, it is healthy fuel for the body, and people are much more aware of its origin, quality of ingredients, nutritional value, and sustainability. And in parallel, there is a growing demand for a reduction in the time for cooking, up to the purchase of ready-made food.
Increasingly, supermarkets are transforming their format from simple stores to centers where the shopping process becomes an enjoyable experience. And stores are trying to cover a variety of customer needs. Kitchen and preparing the food in stores play an increasingly important role in increasing customer traffic and loyalty.
The myths that store dishes are made with expired ingredients, or discounts on prepared food mean it has already gone bad, have long been dispelled. In addition, buyers perceive ready-made food as savings: they understand that food production in the supermarket is on stream, products are not stale, and the technological map is observed.
Often people want simple food, but do not want to spend a lot of time preparing it and even ordering delivery. Therefore, buying ready-made food along with other goods in the supermarket is ideal for a buyer.
The production of bread, culinary and other products is a financial benefit for a retail chain and a component of the image. The smell of freshly prepared food is the emotion of the supermarket. With the help of prepared dishes, the grocery store can noticeably differ from competitors. If a customer is used to your “just out of the oven” bread, he will come to you several times a week and buy more than just bread.
However, own production is not only about profit. This is a large array of business processes in which ingredient and kitchen inventory management play an important role. How to provide cooking with everything necessary for each production cycle? Read on.
Analyze your business processes with our demand forecasting and ordering checklist and see what can be improved and automated!
Optimal ordering is the key to successful inventory management
To ensure that your production is stocked and that the ingredients are always fresh, you need to pay great attention to and control the ordering process. Of course, you can assign several people to this task, but this does not guarantee a good result.
For example, how to understand how many eggs need to be ordered today to ensure their availability the day after tomorrow for making salads and confectionery? What if tomorrow is a holiday? And if the supplier warned that he will not have a delivery this week or prices are going up soon? To cope with the processing of such a stream of data from different sources, process automation and artificial intelligence (AI, AI) are needed.
When it comes to managing the kitchen, fresh and prepared meals, your supply chain needs to connect to master data and production planning across all locations. This will allow you to optimize ingredient and kitchen inventory management, forecast costs, and plan cooperation with suppliers.
Today, with the focus on fresh and prepared produce, whether it's a salad at a deli or a full meal at a food court, accurate production planning, both in centralized kitchens and in the field, is more important than ever. You must balance production and food waste, and you cannot afford to overproduce products with a short shelf life and high spoilage rate. Symphony RetailAI's Ingredient Inventory Management solution optimizes supply chain waste and reduces frozen surplus and maintenance costs.
Satisfying daily or weekly needs, the solution provides visibility into WIP across the entire production cycle and projected orders. Let's look at how to make a forecast and what solutions simplify and automate the process as much as possible.
If you have any questions about solutions for demand forecasting or auto-order, write to [email protected] or fill out the form to order a callback. Our experts will answer you with pleasure.
Demand forecasting and artificial intelligence in inventory management
To order the required amount of ingredients, you must first predict the demand for products based on them. Demand forecasting requires an agile, AI-powered supply chain management system with a high level of accuracy.
Data is everywhere and needs to be managed. The forecasting system uses:
- historical data - sales information preferably for 3 years, based on which the system analyzes the relationship between the level of sales and events from the past (holidays, promotions, sales);
- master data that must be correctly entered into the system: the exact recipe of the dish, the number of components, and losses in the cooking process;
- numerous factors that affect demand, such as stock level, weather, price, promotions, events, and sales at the store level.
Effective forecasts require large amounts of data to be entered. Certain supply chain management systems are designed to handle the complex challenges of fresh produce, with the amount and heterogeneity of data needed to be efficient. To find the right balance between ingredient availability and wastage, retailers must be able to get accurate forecasts. To do this, the forecasting system must work with various models that take into account changes in demand during the week, day, periods during the day, and even in the context of the hour. Moreover, the detailing of models for some products can be at the store level, and not the whole network.
It's time to think about artificial intelligence and machine learning. AI-enabled solutions are effective when they are specifically designed to work with food retail data, so the solution provider must have sufficient industry experience to develop effective systems.
Why is historical data not enough to accurately predict today's demand? There are situations when an event, say, a conference, was held near the store, and the demand for certain goods increases. But such a target audience may never visit this store again, and it is not advisable to include such data in the forecast. The system monitors such bursts and can weed them out.
Similarly, the program will react to the holiday season entered in advance. This means that by Christmas, the system will plan an increased order for seasonal dishes or products. How to prepare a retailer chain for the holidays period or seasonal sales, we analyze in the article “Seasonal demand forecasting”.
When forecasting demand, the fresh product category represents a special group, since the forecast for it should take into account even more factors that affect the supply and purchasing behavior of consumers (shelf life, delivery schedule).
When external influences are added to data from suppliers and price fluctuations, the level of forecasting complexity increases. AI-enabled systems can explore contextual data sources, and their correlation with historical data, for understanding behavioral patterns not previously identified. Thus, forecasting demand for every store in every cluster, down to hourly demand where appropriate, allows retailers to respond quickly and efficiently to fluctuations.
To ensure the optimization of the supply of ready meals, sets, and delicacies, it is not enough to consider only fresh products. It is necessary to assess the associated demand for packaging materials and additional products for cooking, which include all kinds of sauces and dressings. The level of accuracy where inventory availability is minimized and losses reduced can only be achieved using AI-based forecasting systems.
In inventory management, it is important to cooperate with suppliers
Supplier partnerships are also a key factor in managing fresh produce to ensure the level of responsiveness required. Sharing data is vital: distributors need to know how many sandwiches to make, bakers need to know how much flour to make, and farmers need to know how many seeds to plant. The ripple effect of demand forecasting accuracy has a significant impact on product availability on the shelf.
Forecasting and a joint look into the future contribute to the parallel development of the business of the retailer and the supplier. The manufacturer can schedule its load. And for the retailer, this gives an understanding of how many suppliers he needs to ensure its production with regular supplies of fresh products in the current period and the future.
Inventory management solution for production in grocery stores
As we said above, the specifics of kitchens at the grocery store require involvement, and resources to process a large data stream and understand their mutual influence. The optimal solution is to automate the kitchen inventory management processes of ingredients in special software.
The experience of C4R specialists in retail exceeds 15 years, we see the operation of systems in practice every day and can evaluate their effectiveness, as they say, in the "field" conditions. That is why we are implementing the systems of the world's leading supplier Symphony RetailAI and developing our own IT solutions for retail.
To manage stocks of food production, experts recommend the Kitchen Management system, which provides a wide range of functionality:
- saves recipes: moreover, the program allows you to create a multi-level formulation. For example, recipes for different types of pizza include a dough recipe;
- calculates the energy value of dishes: knowing the composition and quantity of ingredients, the Kitchen inventory management system determines the content of fats, proteins, and carbohydrates;
- takes into account the consumption of all ingredients: product consumption rates are taken into account in the software when forming residues;
- manages different types of goods: for example, fresh juices are not stored in the leftovers by themselves, but when the juice passes through the checkout, ingredients (oranges, as well as components for serving: a glass, a straw, and decor elements) will be written off from the leftovers;
- provides real-time control over the movement of ingredients: during the cooking process, components will be written off from the leftovers, and when the dish is ready, it will appear on the leftovers, since information is exchanged instantly;
- generates a list of available recipes: by clustering stores, the retailer evaluates how profitable the production of certain dishes is in different stores, and the task of the Kitchen inventory management system is to streamline this list and not miss the preparation of a “closed” recipe in this store.
As the cost of ingredients fluctuates, the retailer needs to understand the impact on profitability. A solution for automating kitchen inventory management of ingredients in your production increases the profitability of finished products by analyzing the cost of the recipe and evaluating stocks. The implementation of an IT solution makes it possible to work with recipes effortlessly, minimizing waste, and saving time and money.
Learn more about solutions for automating retail business processes from our consultants: write to [email protected] or fill out the form below to order a callback.
Author of the article, Victoria Gulyuk,
Consultant ERP company C4R
