7.

RESTAURANT MANAGEMENT
SYSTEMS
(RMS)
Learning Objectives:
• To identify restaurant management system
components
• To explain how restaurant management
systems are applied and its functions
• To describe how managers use reports
generated by restaurant management systems
applications
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INTRODUCTION
• RMS enables businesses to better serve its
customers and assist employees with f&b
transactions & controls
• RMS also sometime referred to as catering
information systems (CIS)
• RMS composed of several separate systems
linked together to exchange data
• Examples of RMS include recipe management
systems, inventory control systems and POS
systems
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 RMS COMPONENTS

• RMS applications are divided into 2 parts – back of

house & front of house
• Back-of-house
– Inventory / Stock control
– Menu management
– Recipe management
– Sales analysis
• Front of house
– Point-of-sale system (POS)
– Reservations and table management
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Inventory / Stock Control
Restaurant managers usually given detailed
report of how much inventory is to be kept on
hand
Manual inventory control very labour-intensive
and time-consuming
Using RMS, all boring, repetitive & error-
prone calculations carried out automatically
Most of the data needed is already available on
the system and calculations can be carried out
quickly and accurately

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Inventory / Stock Control

RMS helps inventory control by:

Tracking inventory movements
Recording deliveries & issues
Identifying variances between actual &
theoretical stock
Inventory control systems can also prevent
theft whereby employees have to input their
ID every time an item is removed
Separate modules of the inventory control
system deal with deliveries, issues & stock-
taking
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 Deliveries
The clerk enters details of the deliveries into the
system as the stock items arrive at the central store
As each stock item code is entered, the system
displays its description, purchase unit and size to
prevent posting errors
The quantity delivered and the price on the delivery
docket are then entered
When everything on the docket has been input, the
system calculates the total value of the delivery and
compares it to the docket entered by the user at the
beginning
This identifies mistakes before items are added to
current stock

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Issues

Stock is issued from the central stores when a

requisition is received from one of the sales or
production areas
These requisitions used to be done manually
by the chef who estimated the amount of each
ingredient needed to produce the menu
If the recipe management system and the stock
control system are interfaced, the requisition
can be sent electronically, thus reducing
paperwork
Once item is requisitioned, the store inventory
figure is reduced by the amount issued

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Stock-taking

At the end of any period, a closing stock figure is

calculated from the information held in the system
This is a theoretical figure – representing the
amount of each stock item that should be left in the
stores
A stock-take must then be performed to check the
actual levels of each item in stock
The stock-control system helps by printing blank
stock sheets which are organized in a way that
helps speed up the counting process
Once data from the stock-take has been entered, the
theoretical and the actual stock figures can be
compared

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Other Features

In addition to tracking stock movements, stock-

control systems also provide other features such
as usage rates and automatic reordering
Usage rates
The amount of each stock item issued during
each period is recorded & used to calculate
usage rate
Usage rate identifies which items are being
used most and which items barely used at all
Popular items can be purchased in bulk or
quantity discounts can be negotiated
Unpopular item’s stock levels can be reduced
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Other features (continued)

Automatic reordering
If a minimum stock level is entered when
each stock item is being set up on the
system, then the system can automatically
identify which items need to be reordered
This ensures items are never out of stock
The reorder lists the stock items and sizes
which need to be ordered, along with the
name and telephone number of each supplier
Some systems can automatically generate
purchase orders and fax or email directly to
nominated suppliers
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Menu Management

Menu management applications help restaurants

answer questions such as:
What is the most profitable price to assign to a
menu item?
At what price level & sales mix does food
service operation maximize its profits?
Which current menu items require repricing,
retention, replacement or repositioning on the
menu?
How should daily specials and new items be
priced?
How can the success of a menu change be
evaluated?
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Menu Management

Menu engineering is a menu management

application used for evaluating decisions
regarding current and future menu pricing,
design and contents
This application requires mgmt to focus on the
number of dollars a menu contributes to profit
and not simply monitor cost percentages
Menu engineering begins with an interactive
analysis of menu mix and contribution margin
data
Menu mix = item’s participation in the overall
menu’s performance
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Menu Management

Menu engineering can help mgmt decide on

how to improve the menu. For example:
Increase price carefully for items that are
popular but low in contribution margin
Consider portion reduction for popular items
so that the contribution margin will increase
Consider a price decrease for items that are
high in contribution margin but less popular
Remove menu items that have low
contribution margin & low popularity

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Recipe Management
Recipe management systems uses up-to-date
prices to calculate an accurate cost for food
and beverage products
Based on these costs, selling prices that
guarantee a particular level of profit can be
established
The recipe management application maintains
3 of the most important files of an automated
restaurant management system:
1) Ingredient file
2) Recipe file
3) Menu item file

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Ingredient File
An ingredient file contains important data on
each purchased ingredient
Data may include:
Ingredient code number
Ingredient description
Purchase unit
Purchase unit cost
Issue unit
Issue unit cost
Recipe unit
Recipe unit cost
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Recipe File
Standard recipes are often used to calculate the cost
of each dish
F&B item examined & standardized in portion
size, ingredients & method of preparation
Recipe management systems automatically updates
all costs whenever ingredient’s price changes
Data maintained by recipe file include:
Recipe code number & name
No. of portions & portion size
Recipe unit & recipe unit cost
Menu selling price
Food cost percentage

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Menu Item File
Contains data for all meal periods and menu
items sold
Data includes:
Identification number
Descriptor
Recipe code number
Selling price
Ingredient quantities for inventory reporting
Sales totals
Data can be accessed by management to project
sales, determine number of ingredient quantities
to purchase & schedule needed personnel
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Sales Analysis

The sales analysis software can process data into

numerous reports to help management monitor
and control operations in specific areas as:
Menu planning
Sales forecasting
Menu item pricing
Ingredient purchasing
Inventory control
Labour scheduling
Payroll accounting
A daily sales report summarizes all sales revenue
activity for a day

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Point-of-sale system (POS)

Definition:
A machine or a network of input and output
devices used by restaurant employees to
accomplish their daily activities
Also referred to as EPOS – electronic point-of-
sales systems
POS used to:
Keep track of f&b orders
Transmit orders electronically to the kitchen
Guest check settlement
Credit card transaction processing
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Point-of-sale system (POS)

Main function of POS is to record the guest’s

orders
This is entered into a terminal by the waiter
and then is relayed through the system to
remote printers in each of the production areas
Orders are automatically routed to the correct
printer so that appetizers appear at the
appetizer area, drinks at the bar and so on
These are also automatically time-stamped and
numbered consecutively, which makes it easier
for the chefs to know which item is next to be
prepared
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Point-of-sales systems (POS)

Advantages of using POS:

1. Decreased service time
Time previously wasted walking from
restaurant to kitchen or bar to drop off orders
or check whether item is ready is saved.
More guests can be served
2. Order accuracy
Miscommunications can be minimized as
each order has a specific field assigned to it
in the POS system that is used by all staff.
This eliminates handwritten & oral
miscommunications
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Point-of-sales systems (POS)

3. Security of cash transactions

Theft can be a problem so POS records all
orders and transactions to each employee’s
assigned identification number
4. Reduced training burden
Employee turnover in hospitality is high so
POS is designed to help train new employees
as effectively as possible
5. Sales Reporting
Data can be used to determine the most
profitable items, when they are being sold and
items that are not selling
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Point-of-sales systems (POS)

Types of POS:
1. Counter-based or handheld
2. Cash register-style keyboard or touch-
screen
3. Stand-alone or part of mini-network of
terminals
Touch-screens very popular as the display
area is less cluttered, making training easier
and preventing mistakes
Hand-held devices allow orders to be
transmitted from table side to production
area using wireless communications
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Point-of-sales systems (POS)
Using POS, the waiter taking the order is
prompted by the system to help reduce mistakes
or omissions.
Example: When an order for steak is taken, the
system will ask how the customer would like
the steak to be cooked (rare, medium, well-
done) and the choice of accompaniments (baked
potato or salad)
These facilities help increase guest satisfaction
& the kitchen gets the complete order
Most POS also has pricing facility and performs
calculations so guest bills are accurate

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Point-of-sales systems (POS)

Apart from improving efficiency of waiting staff,

POS helps managers by producing management
information automatically
Reports that could be produced by POS:
Activity report
Analysis of sales transactions and actual labour
hours during selected time periods
Sales analysis report
Sales performance of individual menu items
Sales & payment report
Statement of daily or monthly sales and
settlement methods
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Point-of-sales systems (POS)

Daily labour report

Lists the names, employee number, hours
worked, wages earned ad wages declared for
each employee
Outstanding checks report
Lists all guest checks (by server) that have not
been settled
Productivity report
Sales activity for all assigned server in terms
of guest count, total sales and average sales

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Reservations & Table Management

A restaurant management system may have a

software module for reservations
The name, number of persons, date and time
are inputted in this system
Those who incorporate technology into their
reservation operations may even move online
Some internet companies take reservations for
many restaurants in different locations
Table management software (TMS) is
designed to allocate reservations/wait/walk-in
list with appropriate tables or locations and
services
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Reservations & Table Management

TMS standard functions include:

A map view of the entire front of house
seating
Alerts on open, long duration & dirty table
Reservation assignment to tables
With TMS, staff can better control and manage
the flow of customers and offer timely service

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Advancements in RMS technology

Advanced touch screen technology

Operator touches icons of products instead of
entering characters and numbers
Personal digital assistants (PDA)
Uses touch screen technology but limited screen
size, may be used for remote order taking
Smart cards
Generates custom sales and customer data
reports that detail customer and their financial
relationship with restaurants
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Summary

RMS can give management more control over

spending, sales and improve operations
Managers need timely information which
could be provided by RMS to measure current
effectiveness and plan business strategies
With proper knowledge and application of
various RMS, RMS technology can further
enhance the performance of restaurant
businesses

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