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Restaurant And Food Service Supply Chain Solutions

October 16, 2023
Bill Kimball

With technology in place, a restaurant can track and analyze the purchasing order needs concerning sales. Restaurateurs can view and analyse the stock requirements for every outlet. Based on the requirements of each outlet, purchase orders can be created and directly sent to the vendors. The restaurants avail detailed consumption information that helps them also to plan their shipment.

This is because the network gives the restaurant chain and its suppliers the ability to make real-time course corrections to meet fluctuations in demand, such as those caused by promotions. For the restaurant industry, the agility provided by the platform results in cost reductions, decreased inventory stockpiles to free up working capital, reduced waste, and increased revenue, which is a win-win for all supply chain partners. Properly structuring promotions and limited time offers within your brand. Product shortages and product obsolescence can turn a great promotion into a disaster.

Supplychainscene.org connects the foodservice supply chain community with the latest news and information on best practices, industry events and job opportunities. It is a service of the National Restaurant Association’s Supply Chain Expert Exchange (formerly SCM/ESG). The turmoil caused by the pandemic has disrupted global supply chains more than any other period in recent history. It has highlighted the critical importance of evolving supply chain systems to be more responsive and agile to the changing dynamics around us – which the past two years have been extensive. Easy onboarding and supplier management is essential to offering the breadth of range our customers expect. BluJay gives us visibility over inventory and allows us to build our drop ship supplier base while maintaining control of order fulfillment. Visibility into our supply chain is vital, both to facilitate on-time delivery to our customers and for planning backhauls to increase utilization of our containers.

The lack of coordination between the restaurant operator and its suppliers only intensifies overstocking as well as the shortages. Lately, challenges have only become bigger for the increasingly complex foodservice supply chain industry. Add to this continued weather disruptions and commodity price volatility, and the stresses on the foodservice supply chain are higher than ever.

An automated forecasting module provides the projection of the future sales volume on the basis of consumption patterns of customers. Based on the in-hand physical stock in the kitchen and item-wise sale from each outlet, it is easy to estimate the inventory requirements. Demand sensing systems generate forecasts in both the menu and raw materials items.

How Is Technology Solving The Supply Chain Complexities For The Restaurant Industry

Your customers love your food and the service, but it’s a delicate thread that binds them to you. All it takes is one or two disappointing meals; or their favorite menu item is sold out; or, the food is not as fresh as it could be… and one day you realize that you haven’t seen that family in a while. Secondly, when you establish connections with supplementary suppliers, you are effectively setting the stage for stable and efficient growth down the line. The disruptions and changes in delivery patterns are driving up transportation costs because the specialized refrigerated truck trailers needed to transport food are in such high demand or out of position. Say there is a restaurant chain with two outlets that is raising purchase order based on the average requirements. Soon after the delivery of an order, it is learnt that one outlet is running short of inventory, the second outlet has an excessive inventory with no storage facilities. The restaurant chain also faces the problem of missing out or receiving the wrong item.

Restaurateurs can create offers on menu items specific to every outlet. A proportionate estimation of the inventories also removes the issues related to the ageing of the raw materials. Simon de Montfort Walker is the Senior Vice President and General Manager of the Oracle Food and Beverage Global Business Unit.

supply chain of a restaurant

Top news and in-depth analysis on the world of logistics, from supply chain to transport and technology. News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services.

Prioritize Restaurant Inventory Management & Optimization

Meeting customer demand while containing waste and lowering overhead costs requires complete end-to-end visibility, business intelligence, and collaboration. This will prevent costly setbacks and ultimately keep your patrons happy, so make sure to use technology to manage your inventory more efficiently. The restaurant chain can use the network to orchestrate its suppliers to respond to changing conditions in both demand and supply.

  • Best-in-class organizations employ collaborative cloud solutions where suppliers can continually update and provide information and brands can proactively manage issues when they arise.
  • It also enables all parties to optimize the entire process, from forecasting to ordering, shipping and receiving.
  • It also can aid with reordering and payment management when you’re managing your supply chain.
  • A deli in the state is only getting about 40% of the chicken it has ordered from suppliers, he said, while flour and tofu are out of stock about half the time.
  • Across 3PL, 4PL, Suppliers, Distributors, Carriers, Warehouse providers and Customs.

This dynamic, pinpoint accuracy of forecasts and inventory levels based on actual consumption is obviously a huge benefit that drives up service levels while driving down costs. Integrated order management, replenishment and shipment processes, which ensure delivery of the right ingredients and supplies to the right restaurant in the right quantities at the right time.

Our Expert Exchange Gatherings are a way for our communities to connect virtually. These are collaborative, informal, operator-led events, and they’re intended to touch on topics that are pressing and relevant to your jobs and to the restaurant industry as a whole. If you attend, you will get the opportunity to meet online with your peers, share, learn, and ask questions in an engaging and safe peer-to-peer environment. At a time when we cannot meet in-person, the need for connection is more important than ever.

Pandemic Paves The Path To Reimagine The Future Of Restaurants

Forecasting or demand sensing is a critical step in the entire cycle of restaurant supply chain operations. Finally, the network should be able to make smart decisions when faced with scarce supply. This should be one of the largest areas of focus for supply chain managers in the foreseeable future. If your organization does not have a Quality Management system in place currently, you’ll want to get one in place soon. QM systems cover broad terrain, from how you qualify and onboard new products and capture quality issues, to preparing for and implementing product recalls up and down your supply chain.

supply chain of a restaurant

These adjustments are relayed through automated replenishment planning to drive better allocation of resources to the restaurants and stores that have the greatest need. Current ordering and replenishment practices in the industry exacerbate demand and supply blind spots, especially for handling LTOs. Typically, a restaurant manager uses their “gut feel” or a rule-of-thumb based approach to order supplies for these offers, which generally lasts two weeks. In fact, all too often the restaurant manager doesn’t realize until too late that there will not be enough supply to last through the promotion period.

Tips For Building A Successful Restaurant Supply Chain

In particular, these networks enable much more accurate forecasting and ordering solutions. Since critical data flows in real time, these forecasts and orders are precise and up to the minute. But importantly, they are not static, they are dynamic and are automatically adjusted as conditions change. A modern PoS system can save you a lot of money in your front-end and back-end operations, meaning that it can help automate many processes such as payments and ordering in the restaurant. It also can aid with reordering and payment management when you’re managing your supply chain. Point of sale systems integrate a variety of handy features that every growth-oriented restaurant should have, especially if financial savings is one of your top priorities.

Compliance Solutions

Supply chain is the steps involved in getting raw materials from the source, turning them into sellable goods, and distributing them to customers. These steps typically involve working with a number of vendors who specialize in each step of the chain. To understand what it means, you first need to understand what the supply chain is.

This takes a big bite out of your profits, erodes customer loyalty and market share, and can lead to disaster in a market environment where growth is hard to come by. The BluJay Solutions multimodal transportation platform has allowed us to see a 15% reduction in our cost per pound, excluding the cost of fuel. BluJay Solutions helped MTD drive efficiencies in our supply chain – both internally and externally. We’re grateful to BluJay that we can benefit from this flexible, comprehensive software, because it tremendously eases our workload. With BluJay, we have a partner at our side who knows international customs regulations and logistics processes through and through. This lets us help people in need faster and better all over the world.

Numerous chains have been selling upgraded chicken sandwiches, hoping to compete more directly with the giant Chick-fil-A and latch onto some of the enthusiasm for Popeyes Louisiana Kitchen’s chicken sandwich in late 2019. KFC itself introduced an upgraded chicken sandwich this year, helping the company generate sales growth. First, when the “links” in your supply chain can share information, they can collaborate better. This collaboration ultimately gives you more control over your business, so you can increase profit margins more easily. She says they’ve been helping each other out when they come across certain items. Accurate restaurant perpetual inventory system based upon actual POS and delivery receipts.

How Kfc Restaurant Indonesia Manages To Digitize The Fast Food Experience

Unfortunately, disruptions to restaurant supplies are all too common and have a significant impact on the industry. The combined power of increased network and operational agility means unprecedented responsiveness, revenue capture and cost reductions for all parties in the foodservice supply chain. To better coordinate processes and trading partners and enable real time collaboration. A multi-tier solution improves sell-thru, improves forecast, and lowers inventory costs. Real time visibility, coupled with demand-based forecasting, will help create a more efficient and agile supply chain. Restaurant operators need to learn the lesson of AirBnB and other disruptors, and adopt real-time networks that connect, flow and match supply and demand in real time.

In short, he said, the company has enough supply on hand to meet current demand. But it has opted to shift its focus to where supplies are more abundant. “We’re going to focus on things we have more abundant supplies of,” he told the publication. That includes bone-in chicken, for which the chain has long been known. Involves keeping track of what ingredients and supplies you have in stock so you know when you’ll run out and need to order more. Supply chain management, therefore, means actively monitoring and managing your supply chain to maximize efficiency and value.

Networks also track the performance of all parties and make key performance indicators transparent to all parties as well. Lastly, networks provide an information backbone such that all parties can recognize and track the occurrence of a transaction if they are authorized. Many companies invest in sophisticated forecasting algorithms to get a better handle on demand; however, visibility into point-of-sale trends is useless unless insights lead to timely actions. After-all, real business value only comes when the supply chain is able to respond to detected consumer response to both LTOs and changes in dining trends. The digital network must be able to sense demand patterns, generate corrected forecasts, translate these forecasts from menu-items to supply forecasts for SKUs, and orchestrate replenishment from suppliers—all in real-time.

Reduce order processing and planning time by using ONE’s automated replenishment. ONE calculates requirements based upon current restaurant/store inventory, orders already placed and projected usage.