Inventory management and stocktaking are painful processes in the retail industry. However, it can be a far more daunting task for the liquor retail sector due to variances in the quantity of product sold and the level of estimation. Liquor stocktaking has always been a challenge for pubs, bars, clubs, hotels and other hospitality businesses given the fact that there are not many accurate as well as cost-saving options in the hospitality sector. Knowing how much liquor you have on hand at any given time is essential so that F&B manager make sure that the inventory is making it into the menu items and out to paying guests. Also, reliable and efficient stocktaking prevent overpouring as well as theft and wastage in the F&B operation. Most bars rely on pen and paper, physical counting and estimating the liquor left in the bottle. Current stocktaking takes a lot of time. But it’s absolutely necessary to ensure that your profits are not ending up in a trash can or in someone’s home party.

The simple formula in liquor stocktaking is starting inventory – sold inventory = ending inventory. However, this formula doesn’t tell if the consumed stock is being sold or given for free. Also, once the bottle is opened and partially consumed then the bottle itself is not the subject of stocktaking but rather it’s content. To ensure the counting is accurate, it should be conducted the same way explained above but the difference is that the sold inventory is the consumed liquor. Therefore, there should be consistent stock taking periods, only count when the bar is closed and ensure ‘counters’ are trained properly. The common practice is “Tenthing” where is the process of visually dividing the bottle into tenths and counting how many tenths of liquid remain.

A German engineering company together with “Massec” has developed a simple yet revolutionary technology that significantly eliminates wastage, increases profits, reduces labor time and provides transparency through an advanced stocktaking system. The technology consists of three components. A bar code scanner, a digital scale and stocktaking software which is integrated with the most common POS systems in the hospitality industry such as H&L, Triniteq, ImPOS, SwiftPOS, and Oracle. Integrating the stocktake data with the POS system enables the bar owners to publish an accurate and easy to understand report. The report also helps the F&B businesses to calculate tax deductions and calculate the sales margin.

The user simply scans the barcode of the partially consumed bottle with the barcode scanner, and then place the bottle on the digital scale. The software calculates exactly how much of the liquor is in the bottle with 99.8% accuracy and save the data in a format that is compatible with most POS software. The Massec stocktaking software automates the process and frees up the bar owner’s valuable time. The integration with the bar POS creates a more cohesive flow in daily operations. Massec has implemented the system in several international hospitality brands such as Marriott, Westin, Sheraton, Millennium, Valamar, and Savoy Hotel to name a few.

The key benefits that an effective stocktaking solution can bring to F&B businesses are:

  • Reduce liquor shortage
  • Optimize the purchase size and reduce shipping cost
  • Reduce waste at the bar such as theft, overpouring, and free drinks
  • Increase in profit by improving sales per bottle

An inventory management system can not only help bar owners track stock but also can reveal customer buying trends and make it easier to forecast growth. Aside from the benefits for bar owners, there are additional benefits for liquor distributors as by utilizing data collected from the bar they can forecast sales and future purchasing. Also, distributors determine the bar’s demand and see trends that help them better predict what they will order and when. It can also help them determine how to price drinks based on their popularity in the market. However, to use a stocktaking solution effectively, someone should be accountable to scan and enter all data in a timely manner. In an independent or small bar, these systems usually end up being scrapped or underutilized at best.

Stocktaking solution enables hospitality businesses to leverage the power of technology (big data and analytics, cloud, and mobile) to transform their businesses into a digital enterprise and gather insights into their business performance and operational profitability. Hospitality companies that can transform into a data-driven organization can better respond to the demands of a changing environment and stay ahead of the competition by reducing their inventory fat according to their sales performance. As the technology landscape becomes more complex and the line between different business processes overlap due to increased systems integration, hospitality companies need to invest in technology to gain a competitive advantage through improved customer engagement and channel-specific services.