Better QSR Inventory Management Leads to Better Returns

How many dollars does your business throw into the dumpster every year? A head of lettuce or a pound of hamburger might not seem like much, but every month, they add up to a big pile of dollar bills. In a study commissioned by the Food Waste Reduction Alliance, it was found that approximately 80 billion pounds of food are discarded into U.S. landfills every year. For the restaurant industry, which generates 37 percent of that waste, that large amount can seriously affect the bottom line—waste, spoilage and overstocking are all hidden food costs that can seriously impede a restaurant’s cash flow.

So what’s the secret to controlling food costs and improving profitability? When every penny counts in foodservice operations, taking inventory—and doing it well—can make all the difference. That’s where modern technology comes in. Today, many quick-serve restaurants are finding that with a proper inventory management solution in place, they’re better able to manage the food on their shelves and reduce what’s making its way into the trash.

Lean Path, a Portland, Oregon-based food tracking company, estimates quick-serve restaurants could reduce food costs by as much as 10 percent through weighing and tracking the food they’re wasting. Andrew Shakman, president and CEO of LeanPath, developed a series of waste-auditing tools for commercial foodservice companies. The company’s pitch is straightforward—customers install its scale and touchscreen unit in the kitchen where excess food is dumped. Before food is discarded, it goes on the scale, where workers enter their name, record the type of food, the type of container used and the reason it’s being tossed. The system then sets a dollar amount for what’s being discarded.

“Waste tracking is a good practice that is well known and understood. You need to make sure the behavior in the operation is treated just like sanitation,” Shakman said in Bloomberg Business. “Getting a handle on your data daily is the key. POS systems do not provide sufficient information to drive a change in employee behavior. But when employees become engaged with the tracking process, they begin to view food as a precious commodity. It motivates them to waste less.”

According to Shakman, LeanPath’s concept first caught the eye of a cafeteria in a Swedish Medical Center First Hill Campus in Seattle. In using the program, the hospital’s executive chef, Eric Eisenberg, was able to track down detailed data on how much food was discarded and why. In doing so, his food costs fell by double digits. In the first month, he reduced production of baked goods by 43 percent, deli meats by 50 percent, salads by 40 percent and sandwiches by 75 percent.

“Our business is about culture and shaping behavior. It’s not rocket science to figure out how to make less mashed potatoes. But it’s hard to identify that it’s mashed potatoes that are overproduced and costing you money,” Shakman. “But once you finally know what to look for—and you train your team to know what to look for—better awareness of your inventory is better for economics and better for the environment.”

Nick Powills, CFE, founded No Limit Agency in 2008 and serves as Chief Brand Strategist for the Chicago-based firm. No Limit is a full-service communications agency that establishes and elevates brands by bridging Public Relations, Social Media, Marketing, Advertising, Digital, and a lot of creativity, to best strategize well-rounded and successful campaigns for 50+ global franchise brands. By presenting visionary ideas and building real relationships, No Limit is able to create effective media branding strategies to help companies grow. Nick currently leads a staff of writers, media strategists, designers, social media experts and digital producers in an office think-tank where brands are humanized for strong, compelling media stories. Prior to starting No Limit at the age of 27, Nick spent four years working at a franchise PR agency where he mastered the art of building rapport with media outlets and creating newsworthy pitches for earned media placements. He holds a Bachelor of Journalism from Drake University in Iowa.

Better QSR Inventory Management Leads to Better Returns

Don’t Miss the Next Big Franchise Story

Nick Powills

More Articles Like This