Ryan Williams
Jeremy Julian

Three Restaurant Technology Trends: Week 3 – Just-in-Time Delivery

January 27, 2016

Welcome back! This is the final installment of our three-part series on Restaurant Technology Trends. Today, we we’ll be discussing the practice of Just-in-time (JIT) inventory. (Please click on the links if you missed our previous posts about the Internet of Things (IoT) or Big Data).

Just-in-time (JIT) inventory is just as it sounds! A JIT management system is one in which materials and products are produced or acquired ONLY as demand requires.

After all, maintaining inventory takes time and has associated labor costs as well. But when you can continuously track what has been used and what remains in storage, you can make well informed choices when placing orders. You don’t want to tie up capital in inventory unnecessarily, and you don’t want to run out of critical items either! It’s all about using a JIT system to create balance. The goal is to maximize profits by having the optimal amount of inventory at any given time.

To help optimize inventory levels for JIT, we suggest following these two guidelines:

  • Set a perpetual inventory tracking system.
  • Set an ingredient inventory baseline/cap.

Perpetual inventory tracking

When it comes to inventory management, there are three essential questions about each product:

  • How much do we have on hand?
  • Are we likely to run out today?
  • How much should we order?

By setting up an electronic inventory tracking system, managers have an integrated interface that allows supervision of all stages of the inventory’s life. Every product can be managed from ordering to consumption, and data can be seen instantly, at any point. JIT also can drastically reduce the amount of waste.

Electronic inventory systems also integrate with vendors and can automatically notify them through email, fax or phone when a certain item(s) is below baseline. Meanwhile, pricing, invoices and delivery estimations are received and reconciled in real-time.

When inventory is electronically integrated and tracked, waste and costs are reduced while profits steadily increase. This also leaves managers with more time to better manage their employees, handle customer issues and run a more effective business.

Set an ingredient inventory baseline

An ingredient inventory baseline is the amount of each item you need on hand to meet typical production demands between vendor orders. When an order is made, the product is brought back up to its inventory baseline. The baseline is set to avoid the problems of having too much, or too little inventory on hand.

Too much inventory can spoil and go to waste, which is expensive. It also locks up capital that might be needed elsewhere. On the other hand, too little inventory can create lost sales due to unavailable items, which leads to disappointed guests and stressed servers and managers. By setting an item inventory cap, both situations and consequences can be avoided.

By investing in inventory tracking and adopting a JIT system, your business will become more efficient, lean and profitable. Which are three things all business strive to be.

Less loss, more accountability

With smarter reporting and inventory control, managers and owners can prevent loss and hold their employees accountable. By having secured access to review and approve inventory counts, any missing items can be easily identified. For more information about employee theft, check out our previous post, Internal Theft: 8 Common Ways Employees Steal.

Thank you for joining us and we hope you enjoyed our special three-week series.

Be sure to join us next week as we discuss the current trend and idea of ‘local.’

Until next time!

Need to pass the time before our next post? Check out Custom Business Solutions for all your restaurant technology needs!

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