Over fifteen years, the output of the U.S. Quick Service Restaurant (QSR) industry was expected to increase by approximately $100 billion.
Enterprise Resource Planning has made restaurant management a regular part of Americans' everyday lives, both on a personal and business level. A reliable system and the most powerful software allow one to manage stock, purchase orders, and stock movements from a single screen.
Restaurant Market Overview
Before you dive into this sector, it is important to understand what the "restaurant industry" means. This phrase refers to the service industry sector that focuses on food services in restaurants, bars, and cafes.
- Many restaurants exist, such as standalone, chain, and fast-food establishments. A business that allows customers to order food and eat there can be considered a restaurant, regardless of whether it offers other services.
- Restaurants are major employers in the wider hospitality sector.
- These positions include waitpersons, bartenders, chefs, members of the customer service staff, and restaurant managers.
- Restaurants are often considered a subset of the food service industry. The first two categories are people and families. Individuals will make up the bulk of lunchtime customers, and families will make up the majority of dinnertime clients.
What is ERP?
ERP software is a type that helps firms automate and manage critical business activities to achieve maximum performance. ERP software streamlines the entire organization's operations by coordinating data flows between business activities.
The financial, supply chain, operations, and business functions can be integrated into one platform.
- ERP solutions have evolved. Many are now web-based and can be accessed remotely. ERP software can integrate all the processes necessary for managing business processes.
- ERP offers several advantages, including a single source of information, accurate, real-time data reporting, and open communication between business units.
- An ERP system can fail if a business owner does not implement it properly.
Most businesses have an operational and financial system. However, siloed systems will only be able to support future growth or expand beyond the routine operations of their business life. Systems must adapt to changing business needs.
This article will explain ERP and how it can help you run an efficient and flexible business intelligence.
- It could be similar to managing multiple restaurants at once while simultaneously juggling burning torches.
- One location's menu cycle can be problematic, even though the chefs are used to it.
- A complex operation is only made more complicated by each new location or sales channel.
A restaurant ERP system creates order from chaos. It can be used to monitor all aspects of your restaurant's operation. Instead of spending time trying to put out fires, focus on improving your bottom line. For example, focusing on the discrepancy in your actual and expected food prices. Automated ordering will make your chefs' lives easier (no late-night stock counts) and give you total control over your food service company by allowing you to track stock levels in real-time.
Why is ERP Necessary For Restaurants?
Restaurant ERP Software allows you to maintain a calm and controlled environment for your business performance. Finding the right system for you can take time and effort. Each restaurant business is unique. Off-the-shelf ERP systems often fail in the complex food service industry.
Virtual restaurants, cloud-based business models, and central production kitchens are becoming more common if they are not already the norm for chain restaurants.
- Modern restaurants are increasingly using point solutions to solve specific issues. It is critical to understand the distinction between a platform and a point solution.
- Point solutions are developed to address a specific issue. Platforms can be combined with other platforms that provide point solutions, or they can focus on one task. Platforms allow you to create a holistic system that tracks processes from start to finish.
- ERP can bring back memories of legacy systems. These were the ones that required costly installation and maintenance and used heavy hardware. However, the most current ERP systems are exceptional.
A modular cloud-based platform could be your restaurant's best ERP. You can create your system by using the components that you already have. Also, ensure data moves smoothly between systems so you can access accurate reports quickly and make the right decisions to achieve your business goals.
Being more successful will bring your company success. These are some of the ways that food ERP software can improve profitability.
- Increasing productivity and decreasing labor costs;
- Employee morale can be improved
- Reduce the cost of food, and reduce food waste
- Increasing data flow and reporting
- Increasing regulatory compliance
- Quality management and consistency:
- Customer service enhancement
It would be best to look for these key modules in your restaurant ERP when it is back-of-house.
- Production planning
- Menu engineering
- Plan your menu
- Sales analytics
- HACCP and task planning
- Inventory management
- Management of procurement
You must ensure that the following elements are present
- Ability to give permissions and responsibilities to users
- Cloud-based platform with SaaS model
- Strong APIs for data communication between ePOS and F&B management, accounting, and labor planning
- Integration of new areas into the tech ecosystem seamlessly
Every firm is achieving new heights in inventory management. We will discuss how ERP systems can help your business optimize inventory, even though AI is a great option.
Effective Stock Management
When you own a restaurant, you will see a return on your investment. Incorrect stocking can confuse customers about the menu and cause them to be angry. Food loss and spoilage can be caused by overstocking.
These situations can harm your business. It tracks and reports inventory turnover, shortages, overstocks, scheduled refills, and obsolete goods. It generates reports and keeps track of product transfer during shipping and receiving at the warehouse.
Enhance Your Buying Process
This method will provide you with timely updates and notifications about the status and inventories of your inventory. This applies to suppliers as well. You can track your shopping process by synchronizing your order and shipment data.
Integrating back-end systems, speaking directly to partners, and integrating them may help reduce potential disruptions such as not receiving key ingredients when you expect them or having the product's price go up than expected.
Simple Inventory Control
The ERP reports each product's per-item and per-ingredient inventory statuses. This allows suppliers and employees to track stock levels and order quantities. Planning is easier when data and inventories are easily accessible. Customer happiness also increases when these data and inventories are readily available.
Reliable Reports
Restaurant owners can benefit from a system that delivers accurate reports in real-time. This will allow you to use all the available data to help grow your business. You can generate detailed reports on your sales, COGS, SKUs, and any other information you gleaned from your inventory.
Efficient Quality Controls
The majority of these systems allow for quality control configurations for inventory. For example, the system verifies product safety data when it is required to comply with strict environmental standards. The system can alert staff members to edit an item if it is found not conforming.
What Are ERP Solutions Available For Restaurants?
Recipe Management
Recipes are the core of any food ERP software. Standard recipes are crucial for efficiency. Your recipes are your primary source of data. They feed every other back-of-the-house process. When it comes to recipe management software, you cannot compromise.
Only the best should be used. General ERP systems designed for the food industry are rarely able to pass. They need help to handle the complexity of F & B administration.
With precise ingredient measurements, clear MEPs, and standard operating procedures, you can achieve repeatable results and provide consistent data for the entire group. Recipe management is a feature of ERP systems.
- Reduce food waste
- Reduce food expenses
- Improve product uniformity,
- Unified catalog recipes
- Give precise buying projections
- Prevent manual departmental transfers
- Tracking allergens and nutrition numbers with 100% accuracy will help you avoid human error.
An ERP system is the best source of reliable information about your recipes.
Vendor Management
A restaurant kitchen needs a variety of raw materials and supplies. Some perishables should be bought daily. However, others can be purchased and stored weekly or monthly.
These items are often bought from multiple sellers making it difficult to keep track of all suppliers and their information. Restaurant ERP software makes vendor management simple. It is possible to: Use an integrated Vendor Management System.
- You can control the mid-level of many outlets' vendor profiles.
- All contact details and information about the vendo.
- You can view and control all prices from different suppliers in one panel.
Management of Restaurant Inventory
Restaurant owners use Enterprise Resource Planning (ERP), which allows them to manage inventory and alert for low stocks. When chefs order an item from their ERP systems, the stock counts in their ERP system automatically reflect an increase in Inventory Management. The stock count of a restaurant immediately drops when a meal is made with an ingredient.
An ERP system can also alert a manager to replenish inventory when it drops below acceptable levels. It may even place an automatic order with a supplier. Three factors are the most important in inventory control.
- Control of Inflow: Food expenditures, especially when commodities are purchased from suppliers
- Control of Outflow: Time and expense for purchasing, as well as when and where to throw out food.
- Stockpile: Product stock value
ERP will attempt to manage the inflow. This will require accurate ingredient prices. "Three Way Match" is a common term in ERP systems. Three-Way Match checks that all Purchase Orders and Delivery Orders are identical before authorizing payment to the supplier.
- To ensure Control of Inflow, owners must insist that all ingredient purchases are made through the ERP system to the supplier. As a result, no more phone calls, WhatsApp messages, or emails will be sent.
- Managers need to train their employees in the ERP system. This training can be time-consuming due to frequent turnover and less tech-savvy staff.
- Managers should have someone responsible for updating product names, measurements, units, and prices. Many restaurants have more than 500 SKUs in their inventory, which must all be entered into the ERP. Many ERP systems have practical scanning capabilities that can be used to set up the initial setup.
- The receiving staff must verify the amount and unit rates in the ERP system each time a delivery arrives at a restaurant. Staff should review any changes and clarify any ambiguities at the delivery. This responsibility could overlap with other responsibilities in lean teams.
Second, every ERP system strives to control the outflow.
Read More: Understanding ERP In Inventory Management
Central Kitchen Management
A central kitchen can greatly improve the supply chain and food production. The ability to process in batches allows for efficient distribution to multiple channels. Sites that are designed to receive supplies efficiently will receive them.
- An ERP system is used to track and secure items in central kitchens. This is important because poor intake procedures and insufficient order follow-up are two main causes of high food costs.
- Although it has many benefits, a central kitchen can take time to manage. Communicating effectively with outlets at different locations and the commissary chef can be hard.
- ERP software makes it easier to make the most of these benefits. Because of the cloud's large amount of data, managers can easily manage multiple areas and supervise them from one location.
A custom-built kitchen can be fitted with technology directly connecting to the ERP. A kitchen display system could assign distinct tasks to each station.
Here are some ways central kitchen management can help you keep tight control over food production at various outlets.
(i). Controlling Yield
- An ERP system that includes a smart Central Kitchen Management feature can help you determine your stock's yield. This will allow you to view the yield for each item in your inventory.
- You can order stock based on the quantity of each item, which will reduce your food costs and ensure that you order only what you need.
(ii). Controlling Food Costs
A basic kitchen can help you see the food prices at different outlets. This will allow you to evaluate the performance of each outlet and compare its costs. You can also compare them by computing differences between actual and ideal food prices for a specific period.
(iii). Keeping a Consistent Recipe in Mind
Maintaining consistency in quality and taste when managing a chain is important. If you have one identical recipe, all your dishes taste the same. Restaurant ERP software allows you to track the stock required to make each item using intermediate recipes.
(iv). Early Forecasting
- Based on last month's stock consumption report, you can guess how much stock is needed for the next month.
- Calculate the stock items needed to satisfy each outlet's inventory requirements.
(v). Manage Your Warehouse
- Distribute finished and partially finished materials according to the requirements of the outlet stock.
- Distribute the raw material to various outlets according to the criteria.
Food Waste Management
Two data points are required for ERPs to capture information about food waste.
- Items that are rotten- Staff members might throw out some ingredients when preparing food. This is where staff record partial items that have been discarded.
- Whole good expiration- This timestamp often corresponds to a staff member disposing of a good. Before a staff member can dispose of an item, they must enter the expiration date in the ERP system. Managers should require that employees regularly update the ERP system.
Centralized Marketing Control
Restaurants receive data every day but need help to use it effectively. Cloud-based ERP software for restaurant management can be used to access a central customer database.
- For example, a customer who has eaten at one restaurant need not provide his contact information when visiting a chain store in another city. The central CRM holds every client's order history and contact information. This data can be used to create customized marketing campaigns.
- Restaurant chains have struggled for a long time to focus their marketing efforts. Because the customer demographics at different locations are different, marketing must be targeted to those residents.
- With the help of restaurant ERP software, you can create marketing offers for specific outlets and run customized campaigns. If a certain outlet is experiencing declining sales, you could create a discount deal for it.
Using linked ERP software, you can also launch personalized SMS or email marketing based on your customer's buying patterns and behavior. Targeted marketing can help increase your marketing ROI.
Multi-Level and Detailed Reporting
Suppose you manage a large chain of restaurants. In that case, you will have to worry about maintaining tight control over all aspects of the business. You can get real-time reports about all actions at your restaurant by using the right restaurant purchasing software.
These reports include data such as how many bills were generated and what discounts were offered, how many people visited each store, how much stock was available each day, the performance of each staff member, and other pertinent details.
You can also access a comprehensive and comparative report on all outlets. These statistics will allow you to assess how different items perform across the board and adjust your menu if necessary to increase sales.
Management of Businesses
- Sales Reports: Managers may request sales data anytime during the day. Analyze the sales of each item across all aggregators and make special offers and discounts. Keep track of all your online sales and account for any pending revenue from aggregators. You can improve your operations by obtaining a detailed cancellation report with justifications.
- Attendance Reports: Reports on wait time and kitchen attendance can be requested. These reports can be used to manage and pay the employees.
- Customer Loyalty: ERP must consider customer loyalty, such as how often customers visit and what meals they order.
- Productivity: This refers to the number of people or tables served per hour while also considering service quality.
- Prevention of Theft: Management can be notified of any differences since ERP can track inventory usage.
- Feedback: Any restaurant ERP system should include customer relationship management (CRM) to track feedback and other metrics.
Restaurant POS
The best restaurant POS software allows you to manage your operations. It includes features like order management, smart restaurant billing, and inventory management.
- System For Kitchen Display: Integration of the Kitchen Display System allows paperless and hassle-free processing of many orders from one screen.
- Table Management: To make your experience unforgettable, you must manage the tables effectively and Keep track of open positions, steward assignments, and table-by-table orders.
- Customer Relationship Management: Offers, discounts, and happy hours can be tailored to attract new clients and keep them returning.
Complementary Foods and Adjustments
Sometimes, a restaurant's management will offer customers a complimentary meal or drink. Sometimes, customers are unhappy, and things are "comped."
The ERP staff must keep track of all these acts. Restaurant managers using recipe modules must also track any products they offer clients.
Payment Management
Payment management is a process that analyzes and processes all invoices, payments, and transactions to provide information about your company's cash flow. To ensure that your company has sufficient cash to pay its obligations, payment management helps you keep track of all financial transactions over a specific period.
When maintaining payment, the following criteria are considered. This will help in determining how payments should be made.
- It does not matter if the payment is manual or automatic.
- The maximum amount of money that can be sent to one payment method per partner organization
- The bank account that was used to make the payment.
- There are many options for output, such as direct debit or checks.
This characteristic allows receipts to be generated by one person or a group. Payment authorization allows customers to determine their maximum payment amount and whether they have the authority to make advance payments.
General ledger linkage allows you to display multiple charts of accounts connected to different transaction stages. The sophisticated software for restaurant management also displays payments for inventory management.
This payment management software provides an in-depth view of your company's liquidity at a particular time. The system analyzes standing orders, purchase orders, purchase invoices, and sales orders or sales invoices to analyze the revenue generation process.
Roles and Permissions of Users
No matter how much you try, running a restaurant company by yourself is impossible. You must hire employees for different positions and assign them specific duties. However, this does not mean you must rely on restaurant managers at every location.
Restaurant ERP software allows you to monitor each outlet's performance by providing real-time, detailed data. A sophisticated restaurant ERP system can create roles and assign tasks to users.
It also fosters accountability among employees given the task. These user roles allow you to assign tasks and gain a 360-degree view of the entire restaurant operation.
Wait for Staff Management
Wait-for employees are a restaurant's most visible employees because they interact with customers and develop relationships daily.
These employees can be waiters, busboys, hosts, and hostesses. The main ERP interface will be a touch screen at each service point. These are some of the key characteristics:
- Waiting Line: The reservation system should inform customers when their table is ready and how long it will take to get there. The ERP should notify the host when the table has been prepared so they can immediately sit down.
- Order Placement: Order Entry is the quick entry of new orders connected by table numbers. This helps to ensure that everyone receives their meal simultaneously. Each order will be sent both visual and audible alerts. Keep operations stress-free during peak hours! More efficient processing of orders A simple interface to increase order acceptance. Mark the food as ready to automate the delivery and increase the food ready percentage by 30%.
- Customization of Orders: Orders should be easy to modify, such as the salad dressing flavor or eliminating peanut oil from a table for one person with a peanut allergy. You can play with your menu. You can add new products or modify the pricing without relying on aggregators. The stock should never run out. You can manage your item availability online with just one click. You have complete control over the hours of your store. You can switch on/off in real-time for your store.
- Order Completion: The kitchen should notify the waitperson as soon as an order is placed so they can pick it up and deliver it. This signal could be sent wirelessly, eliminating the need to glance at a screen.
- Flexibility in Payments: The ERP should be able to accept cash, gift cards, and credit cards. Necessary changes such as bill splitting should be easy to make.
- Reservations: Customer reservations are entered in the ERP system along with information about the time and number of guests and any table requests.
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Conclusion
Retail industries are awash in ERP Systems. Restaurant owners are likely to use something other than this powerful tool. There are many perishable items in the food service industry. Many restaurant inventory items have a short shelf life. Each dish requires many raw materials to make the final product. Restaurants seldom receive food products that they can resell to end consumers. These are just a few reasons to be cautious before installing inventory management software.
