The Importance of Inventory Turnover for Kenyan Restaurants Amid Rising Input Costs

In Kenya, the restaurant industry is grappling with a surge in input prices, affecting everything from food items to utilities. This has put a strain on many businesses, especially those in the food and beverage sector. One area that often gets overlooked but can significantly impact your bottom line is inventory turnover.

The Psychology of Overstocking

The fear of "running out" often leads restaurant managers to overstock. This is especially true in Kenya, where supply chain disruptions are not uncommon. However, overstocking can be one of the most expensive mistakes you can make. It ties up valuable cash and leads to excessive food waste and spoilage. In a country where input prices are already high, this can be a significant drain on resources.

Human Nature and Inventory

It's human nature to be less careful when there's an abundance. This is true for both customers and staff. When storage rooms are always full, employees tend to be less cautious about portion sizes and waste.

Inventory Levels and Theft

Another downside to overstocking is the increased likelihood of theft. This is a concern worldwide but is especially relevant in Kenya, where businesses operate on thin margins and can not afford losses of any kind.

Calculating Days of Inventory On Hand

To get a grip on your inventory levels, calculate the "number of days of inventory on hand." This tells you how many days your existing inventory will last based on your average daily food cost. In Kenya, where supply chain issues can be a concern, having about 6 to 7 days' worth of inventory for full-menu restaurants and 3 to 5 days for quick-service restaurants is considered optimal.

The Benefits of Lower Inventory

Reducing your inventory levels can lead to immediate food cost reductions. This is crucial in Kenya, where businesses are already dealing with rising input costs. Lower inventory levels result in less spoilage, better portioning, and less theft. Moreover, your customers get fresher, higher-quality food, which is always a win.

Conclusion

Inventory turnover is often an overlooked aspect of restaurant management but is especially crucial in the current Kenyan economic climate. By optimizing your inventory levels, you not only save money but also offer a better experience to your customers. Given the rising input costs in Kenya, there has never been a better time to focus on improving your inventory turnover.