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June 30, 2019

7 Tips to Avoid Spoiled Inventory

Managing inventory can be a challenge for any business owner. But when it comes to controlling perishable items such as food, inventory management is a mission-critical task given that the health and safety of your customers is at stake. Shelf lives and expiration dates cannot be ignored when you own a restaurant, supermarket, bakery or another establishment that retails goods with a “best by” date. In addition, much like with non-perishable items, keeping your inventory moving well before its expiration date is essential for you to see a return on that investment.

Below, we’ll take a look at inventory management essentials, along with seven essential techniques to avoid spoilage and food waste in your inventory.

What is Inventory Management?

The primary goal of inventory management is to keep track of the items you accept, hold and sell by providing insight into the weight, amount, size and location of each product. Consider it a 360-degree view of your inventory so that you know when to replenish goods. Without this insight, businesses are left guessing about their holdings and are bound to make mistakes that will impact cash flow, including:

  • Missed sales opportunities due to insufficient inventory.
  • Wasted spend on excess items that you don’t need.
  • Lost revenue on dead stock: items that are out of season or irrelevant.
  • Food waste from excess or slow-moving goods.

With an inventory management system in place, you’ll have better insight into the products you do have (and the ones you need) so that you can optimize your inventory.

How to Prevent Food Waste with Inventory Management

Regardless of which specific inventory management system or software you use to identify the goods you have on hand, there are many added techniques that will help you to optimize your inventory control and avoid spoiled food.

1. Follow the “First In, First Out” Model

Put simply, the FIFO model means using or selling your oldest stock first before it spoils, and replenishing your inventory from the back. To execute this model, you’ll need to ensure your storage space or warehouse is optimized to restock inventory from behind so that older goods are at the front and ready to be used.

2. Set Inventory Par Levels

These levels dictate the minimum amount of each item that you need to have on hand at all times. If your current stock is lower than par level, you know it’s time to order more. But instead of placing a large order that may go to waste before it sells, consider placing a smaller order to simply bring the item back up to par, without going over.

3. Organize your Storage Space

Keeping all of your goods organized, not just the perishable ones, goes a long way to prevent food waste. Label the shelves of your cooler, freezer and dry-storage areas so everyone knows where an item belongs, as well as when it arrived and when it will expire. If every item is in its place, it’s unlikely that you’ll have to toss any inventory that was misplaced and therefore expired. Once your items are unloaded into their proper homes, keep them safe by ensuring your storage spaces, freezers and coolers are each set to the proper temperature.

4. Connect with Your Suppliers

A good relationship with your suppliers can go a long way in preventing food waste. For example, ask to negotiate a minimum order quantity so that you can carry less inventory and avoid spoilage. Or, if you’re taking advantage of a special but won’t be able to use all the goods right away, ask if your supplier can deliver the items in various stages of ripeness so the shipment will last over a longer time period.

5. Conduct Spot Checks

Conducting small inventory checks throughout the year can help to identify imbalances more quickly and avoid spoiled food. You may find that you need to readjust your par levels or start ordering less of an item if it’s not selling as well as you thought it would. If you own a restaurant and find yourself with an excess of one food item during a spot check, get creative and cross-utilize it in other dishes. In retail, if a perishable item isn’t moving, consider running a promotion to sell it off quickly before it spoils. This could help you avoid having to introduce price increases to compensate for food spoilage.

6. Inspect your Shipments

Thoroughly, inspect all shipments as soon as you receive them, not just the items at the top of each package. If items arrive damaged contact your supplier right away and send them back. If this becomes a common problem, it may be time to scout out a new vendor. If you receive refrigerated items, ensure they’re delivered at the required temperature and then quickly transfer them to your own cooler.

7. Make Inventory Management a Team Effort

Train your staff to understand your inventory process. Educate them about your product categories, purchase units, issue units and inventory list. With everyone on board when it comes to inventory control, you’ll be able to gain much-needed feedback from your staff about inventory volumes and identify potentially overlooked pitfalls that could help you avoid spoiled food in the future.

Wrap Up

While every business is bound to have some amount of food waste, implementing the above inventory management principles can go a long way in protecting the health of your customers and your company. With better insight into the goods you hold, you can significantly reduce waste and optimize your inventory.

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