ArrowStream Foodservice Blog

3 Ways Restaurants are Losing Sales Through Their Supply Chain

Posted by Ryan Marshall on Apr 30, 2021 11:50:18 AM

How Restaurant Supply Chain Can Secure SalesThe unpredictability of the pandemic’s impact on the foodservice industry remains, especially the unpredictability of sales in various regions throughout the U.S. as COVID-19 restrictions continue to be put in place and lifted at varying times. It is estimated by the National Restaurant Association that the foodservice industry was $2.4 billion below projected 2020 sales totals. Those who did not already have off-premise models in place saw further revenue declines than those who had established pickup, drive-thru or delivery programs. It goes without saying that restaurants can’t stand to lose more.

The supply chain is a critical operation that can both indirectly and directly affect sales for a restaurant chain and the strength of an operation and network can determine the outcome. The supply chain’s impact on sales may be overlooked, but even in stable times, restaurant chains can find themselves losing sales through stock-outs and surpluses, the lack of visibility into inventory and the lack of access to accurate data required to make business decisions.

These best practices will help supply chain teams and executives at restaurant chains think differently about their supply chain and begin taking steps towards running a stronger operation that optimizes profitability and prepares your business for a new foodservice environment.

 

Best Practice #1: Upgrade from Processes that Perpetuate Lost Sales

Processes that mismanage product causing inventory stock-outs and surpluses is costing your business money. Product write-offs, not having product to serve a customer and off-contract buying all have their cost within the supply chain and can lower overall profit margins.

Foodservice inventory management technology allows you to restrict processes that are causing you to lose money and enables teams to optimize efficiencies and identify new savings opportunities. Real-time inventory data calculations reduce the risks of product stock-outs and shortages, outdated inventory, product substitution complications, and any product non-compliance. Automated alerts notify you to potential risks and help supply chain teams prioritize and determine quickly what is a threat and what is not, avoiding inventory challenges and lost sales.

Every supply issue that is averted ensures your stores have the items to sell, protecting your revenue and ability to satisfy your customers.

 

Best Practice #2: Increase Visibility into Your Distributor and Supplier Data

The pandemic has caused regional variations in consumer demand that have resulted in restaurants experiencing high sales in certain areas and low sales in others that contradicts historical sales data. It’s crucial that businesses “strike while the iron is hot” and have the ability to act quickly in order to optimize sales where there is demand. Without access to real-time supply chain data, restaurants can find themselves reacting too slowly and missing opportunities.

ArrowStream customer, Rick Buttner, Sr. Director of Supply Chain Operations at IPC Subway, believes that expanding visibility up your supply chain to your suppliers’ data gives restaurants further advantage. Hear the benefits of obtaining this level of visibility from Rick:

 

Watch video of IPC Subway talk about using Supplier Inventory Data

 

By increasing visibility into your distribution center and supplier data, supply chain teams are enabled to ensure and shift inventory to meet consumer demand with quality product. Inventory management platforms have increased benefits that include improved accuracy in advising inventory turnover, managing consumer and market fluctuations, scalable inventory management of expanding restaurant chain locations, and improved forecasting abilities for the following months and years.

 

Best Practice #3: Stop Putting Off Your Data Issues

You’ve heard it before – data is key. But it’s not enough to obtain data for the sake of obtaining data. Specifically, restaurant supply chains need accurate, actionable and centrally accessible data in order to make impactful business decisions. Data visibility into inventory, spend, quality compliance and partner performance are all areas of the supply chain that can positively impact profitability. Here are a few data attributes that will get you the most:

  • Accurate: Working from outdated data is not enabling your supply chain team to make sound decisions. Rely on a technology partner who can provide a constant inflow of real-time data, as well as data mapping and cleansing on a regular basis. This ensures data hygiene practices that will result in risk mitigation and profit optimization.
  • Actionable: What good is data if you can’t act on it? Data visibility platforms effortlessly translate your supply chain data into guided analytics by providing alerts, dashboards, visualizations and reports that turn data into actionable insight your team can actually execute on.
  • Accessible: One of the many lessons learned from the pandemic is that having a central repository of data is vital. Not only for your supply chain team who may still be working remotely and with limited resources, but also for your suppliers and distributors. Data visibility technology can ensure all partners are working from the same information within one platform, and also provides intuitive interfaces to make data entry quick and seamless.

 

Next Steps: Optimize Profitability and Prepare Your Supply Chain for a New Environment

End-to-end visibility into supply chain data through ArrowStream’s platform means restaurant chains are able to make quicker decisions, plan ahead and reduce costs, making it easier to manage re-openings and closings in the unpredictable environment we still find ourselves in. Our team is focused on helping restaurant chains to look forward and prepare by ensuring a strong supply chain operation that leverages data and empowers them to do more. Contact our team to discuss how we can help.

 

Contact Our Experts to Learn More

 

 

Ryan Marshall Headshot BWAbout Ryan Marshall

Prior to joining ArrowStream, Ryan developed foodservice intelligence, marketing assets and data-as-a-service for foodservice suppliers, distributors and operators to leverage and make impactful organizational decisions. Knowing the significance of data’s use in foodservice, he joined ArrowStream, where he’s now translating his knowledge to help drive supply chain efficiency and cost savings for ArrowStream’s customers and network through the use of data technology.

About ArrowStream

ArrowStream is the leading end-to-end supply chain management platform for the foodservice industry, helping clients capitalize on data to improve their business. ArrowStream serves thousands of chain restaurant operators, distributors and suppliers with a single integrated network of applications and industry data, providing unmatched levels of transparency, control and actionable insight to protect their clients’ brands, mitigate risks and optimize profitability.

Topics: Supply Chain Disruption, Food Supply Chain, Inventory Visibility, Supply Chain Data

Subscribe to Our Emails

You can expect the following topics for best practices and updates on:

  • Supply chain management efficiencies
  • Strategic sourcing
  • Food safety and quality
  • Supply chain partner collaboration
  • Market intelligence

Recent Posts