Checks And Balances

OPS & SERVICES

Budget control in a hotel is not enough to curb costs. Monitoring of purchase and sales accurately is equally crucial and that’s why Inventory Management is a must – By Mini Ribeiro

Hotels are willingly adopting changes that enable them to become more productive, thus directly impacting profits. The latest entrant is the arrival of hospitality technology solutions for inventory management. Automation of the inventory system and automated reminders, have facilitated greater efficiency in terms of stock maintenance and hotels are embracing this as it lets managers automate the process of tracking rooms and F&B consumption.

Chefs earlier had to spend long hours to find out the most profitable dishes they are selling, but no longer so. Kumar Shobhan, director, operations, Park Hyatt Chennai, analyses, “Matters have become more system-driven these days. Inventory management processes can prevent unnecessary food waste. It helps us to ensure customer satisfaction because a well-managed inventory is also a well-replenished one. Being located in Tamil Nadu, procurement sometimes gets challenging. This rings true for alcoholic beverages and pre-planning and ordering is the bed-rock for luxury brands like Park Hyatt to be prepared for any guest request. And lastly, a smart management of inventory is the hallmark of thinking on the feet for any quality hotel, keeping things fuss free and clear cut.”

Santosh Shetty, F&B manager, Taj Santacruz, Mumbai, acquiesces, “A good inventory management system helps a hotel predict demand and supply rate with accuracy and reduces the chance of error. It also helps a hotel access business intelligence, plan expenditure and keep a tighter control on profit. Inventory management has definitely become easier since things have changed from manual to being computerised. A hotel ERP or Property Management System (PMS) simplifies inventory management to a large extent and makes tracking of purchase and sales accurate. There are numerous operations in inventory which happen simultaneously, including sales through point-of-sale terminals, room service, purchase of food, beverages, other room related consumables and durables. Tracking all these activities can be difficult and if not done well, can result in revenue leakage, wastage, and theft.”

Evolving technology has dramatically changed inventory management in hotels and the F&B department has benefited a great deal from this. Surender Singh Thakur, F&B director, The Imperial New Delhi adds, “Hotels today are not just competing on products and brands, but competing with supply chains as well. Directly, of course, is the end-user benefit to the customer whose expectations are of speed and maximum value. It is absolutely pertinent for a trendsetter and benchmarking hotel like The Imperial, to gain access to a plethora of goods and services from around the world.”

Shuddha Ghosh, GM, sales (SAARC), Prologic First India Pvt Ltd, elaborates, “An F&B manager along with the executive chef can and do fix some numbers and call them budgets, but how will they monitor it daily? A regular feedback, in the form of dashboard becomes handy for them to re-look at the numbers or re-work the delivery and operational process.” He adds, “F&B managers or directors, while planning their menu for a banquet or food festival, plan for special dishes to be offered. They decide on the per portion cost, possible selling price, theme and menu mix, possible revenue that can be earned, etc. Profitability will depend upon potential sales, forecasts and recipe. Chef’s recipe will help them to get to the actual ingredients and raw materials required. Now, a sophisticated system can generate raw material requirement and a more sophisticated system can give them the cost of goods (to be) sold. Thus, planning becomes easy.”

Budgets are the soul to any operation and hotels acknowledge that. In the F&B industry, even small variations in cost has a direct impact on profitability. Inventory control helps compute actual or consumption-based cost. No wonder, hotels are unduly emphasising on the right inventory management system.

Manmeet Singh, director, F&B, The Westin Pune Koregaon Park, admits, “Based on these systems now F&B managers can plan their ordering, stocking and also run incentives to sell slow moving or non-moving stocks. Systems also give them detailed insights of daily, weekly, monthly and various other time period trends, which assist in planning various activities like promotions, happy hours, seasonal trends and staff incentive schemes to upsell.”

Livingston R, VP, sales, Winsar Infosoft Pvt Ltd, reiterates, “Reduce waste inventory management provides the ability to track every ingredient in a recipe or dish, which in turn allows the user to better track food costs. The ability to set recipe quantities allows a chef to minimise waste and increase quality control. Lost inventory is a major challenge for most hotels because they cannot keep track of what moves in and out of their premises. Developing and maintaining inventory-related policies and procedures manuals can reduce the rate of inventory inaccuracies. Instead of one massive yearly inventory count, products should be counted on a regular basis. And this can be done with a good inventory management system.”

Time is premium in the F&B industry where there are a number of tasks to undertake daily. Efficient solutions to ease inventory management, are thus mandatory. Shetty elaborates, “Disposal of unwanted inventory, accurate recording of all material transactions are some imperative tasks.” He adds, “Once the menu engineering, recipe and production management, F&B costing, etc. are in place, we look at the variance control through regular physical inventory schedules, physical stock check and balance, and the store and inventory management. It is also efficient to have the Restaurant Table Reservation Systems in place to plan our inventory accurately.”

The options are many, as several solution providers have flooded the market. Westin Pune considers Opera, Iscala, Micros, as some of the best and commonly used systems. Singh quips, “However, there are other Indian local companies like Shawman, who also provide good solutions. Mostly, all system installations are centralised. Like Starwood uses Opera interfaced with Micros and Store management system, others use Iscala. Each company uses technology based on various factors as support and other aspects may vary according to countries. Most decisions are based on size of operations, availability or costing and support systems available.”

Shetty adds, “Some of the popular ones, which we also use are Micros – Opera Property Management System or Point of Sale and Oracle – Orion R12.”

Thakur uses Prolific, “because of its integration with the hotel operating systems, is our choice. The teams are also well-acquainted with this software for several years. However, we are keen on exploring Cloud Management Systems in the near future.”

Solution providers recognise the need and offer solutions accordingly. Ghosh says, “Each of the software modules that we offer is critical for F&B managers to control their operations and budgets.” He continues, “Prologic First offers computerised inventory management software for hotels that includes many features that contribute to efficiency and cost reduction. Our system helps in setting stocking policies based on each hotel’s specific consumption pattern, procurement lead times and service levels. It allows multiple methods to compute consumption. Prologic First’s Web Prol’IFIC is an integrated purchase, inventory, F&B costing and back office accounting system for hospitality. In addition, unique and useful features, like approvals and stock taking on mobile devices are being progressively added to Web Prol’IFIC. When used in conjunction with our Touché POS and F&B management system, the solution comprehensively caters to the needs of any F&B business.”
WINHMS Inventory Management, on the other hand, provides the ability to track every ingredient in a recipe or dish, which in turn allows the user to better track food costs. The ability to set recipe quantities allows hotels to minimise waste, increase quality control and verify for variances. Once activated, the system manages stock levels based on recipes, keeping an accurate count of stock levels at all times.

Speed and efficiency, timely data and document generation, is what Thakur seeks when selecting a service provider. Shobhan avers, “An ideal solution should be a fillip for the revenue. Where the system is managed in a foolproof manner and handling is easy. Not just the compatibility but also the accuracy of the system matters a great deal.”
Shetty adds, “It is imperative to be able to give feedbacks and communicate any troubles we might face. Secondly, it is important that the software we use is in keeping with technological growth, so, regular upgradation of the software is a must.”

An inventory management system today, is a must for the smooth functioning of any hotel. As Singh put it, “Inventory management is way of business now, as compared to part of the business.” But yes, the selection must be done carefully ensuring it meets with the property’s requirements.

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