Inventory, par levels, and ordering
How to manage café inventory effectively by setting par levels, monitoring stock, and creating efficient ordering systems to avoid shortages or waste.
- Coffee Basics Nerds
- 2 min read
Article 3 of 12 in Café Operations & Business/
Why Inventory Management Matters
- Prevents stockouts that disrupt service.
- Avoids overstocking that ties up cash and risks spoilage.
- Ensures smooth daily operations and consistent customer experience.
Key Concepts
- Inventory: All items needed for café operations (coffee, milk, syrups, cups, filters, cleaning supplies).
- Par Levels: The minimum stock required to meet demand until the next delivery.
- Ordering: The process of replenishing supplies at the right time and quantity.
Setting Par Levels
- Track Usage: Monitor daily/weekly consumption of key items.
- Identify Lead Time: Time between placing order and delivery.
- Add Safety Stock: Buffer to cover unexpected demand spikes.
- Formula Example: Par Level = (Average Daily Use × Lead Time) + Safety Stock
Inventory Control Practices
- First-In, First-Out (FIFO): Use oldest stock first to reduce waste.
- Regular Counts: Weekly or daily stock checks for high-use items.
- Digital Tools: Inventory apps or POS-integrated systems improve accuracy.
Ordering Strategies
- Scheduled Ordering: Fixed delivery days with suppliers.
- Par-Based Ordering: Place orders when stock reaches par level.
- Vendor Management: Maintain relationships with multiple suppliers for reliability.
- Bulk vs Just-in-Time: Balance between cost savings and freshness/storage limits.
Common Challenges
- Overstocking milk or perishable items → spoilage.
- Underestimating peak season demand → shortages.
- Miscommunication with suppliers.
Benefits of Good Inventory Management
- Cost Control: Less waste, better cash flow.
- Consistency: Always stocked with essentials.
- Efficiency: Staff spend less time troubleshooting shortages.
Summary
Effective café inventory management uses par levels, regular counts, and smart ordering to keep operations smooth. By balancing stock levels with demand and supplier reliability, cafés minimize waste and maximize service quality.