ArrowStream Foodservice Blog

6 Best Practices for Restaurant Supply Chain Management

Posted by Kate Hubbard on Aug 20, 2020 9:00:00 AM

There’s no doubt that our current environment has created additional, unwelcomed supply chain challenges for restaurant chain operators, and many are discovering that what worked pre-pandemic is no longer enough to survive in our new foodservice environment. 

Addressing COVID-19's impact on restaurant supply chain management

Supply chain teams now have less time, fewer resources, and leaner staff. Partners must not only run an efficient operation, but also maintain and deliver the brand consumers expect. 

One major setback that slows down a team’s response time and ability to resolve issues quickly is a lack of visibility into their supply chain. This leaves operators exposed to lost sales and consumer confidence, but by making visibility a priority, those new challenges can be addressed. 

Over 200 of the largest restaurant brands have trusted ArrowStream’s best practices using software solutions to achieve successful supply chain visibility in volatile times. 

Read on as we share our top 6 best practices to create a more transparent, precise and innovative supply chain. Learn how to apply these practices in our new business environment using technology specifically developed for the foodservice industry.

 

Foodservice best practice #1: Re-evaluate your team's productivity and bandwidth

Working with limited resources and a leaner team means you don’t have time for inefficiencies in your supply chain operation. Manual efforts and dispersed supply chain data are some of the major inefficiencies that quickly become apparent, making it almost impossible to proactively manage issues.

By using enhanced data, powerful analytical tools and automated processes, you can reduce the overall time spent managing supply chain data by up to 80%. 

 

Foodservice best practice #2: Verify contracted pricing to proactively identify data errors 

Manual data entry always leaves room for human error, so it’s vital to compare contracted pricing to invoiced pricing to gain confirmation and prevent overcharges. Save your company time and money by reducing pricing errors that strain your relationships with partners and franchisees.

Supply chain technology can reduce mistakes and save .25-2% of contracted spend as well as reduce credit recovery by 2 weeks. 

 

Foodservice best practice #3: Stay ahead of inventory disruptions with visibility into operations

Centralized data and automated processes deliver streamlined workflows for supply chain teams to address disruptions and challenges. From inventory stockouts or surpluses, ingredient substitutions, shifting purchase orders (POs), delivery patterns, or unpredictable consumer traffic at a hyper-local level, corporate teams can use intuitive supply chain technology to gain visibility into inventory and mitigate risk proactively, saving your company money and time.

By utilizing a supply chain platform, restaurant chains are able to ensure products are on hand & on order by monitoring distribution center (DC) inventory levels, restaurant usage and purchase orders. You can also respond to restaurant usage trends by monitoring inventory run-out dates & highlighting insufficient orders. Lastly, prepare your product flows for new restaurant traffic by having access to modeled demand changes.

 

Foodservice best practice #4: Ensure purchasing compliance to achieve cost and quality control 

Whether buying off-contract was a result of a disruption in the supply chain or not, having full visibility into your food and non-food spend can greatly reduce the impact of non-compliance. Unapproved store purchases and distributor substitutions need to be immediately flagged and addressed to achieve greater cost control and consistent product quality.

Did you know that off-contract purchasing can be as high as 3% of your contracted spend? The ArrowStream team found that you’re paying 12% higher prices for these off-contract items. Our platform analyzes your spend and contract information to provide clear dashboards that identify off-contract spending events.

 

Foodservice best practice #5: Actively run sourcing events to identify new partnership opportunities

Running sourcing events can help you identify new categories, stock keeping unit (SKU) rationalization and new suppliers to reduce your total spend. Doing this results in direct ROIs as you will experience a 20% reduction in cost and an additional 6% growth in managed spend over time.

 Additionally, these events validate that your current supplier is the best fit for your organization, offering great price, quality and service. Although operators and suppliers work to establish trust, it’s still vital to test the market to ensure you’re getting a fair price, or the best quality and service.

When running a sourcing event, it’s important to invite numerous suppliers. This method will ensure you have enough competition to validate suppliers that are the best fit for your organization. Finding new suppliers can be tough, so having access to a foodservice supplier database (like ArrowStream’s) will not only save time, but ensure peace of mind that you’re inviting a verified supplier who works in the restaurant industry.

Put items that aren’t currently contracted under contract in order to create a standardized product for all restaurants and keep pricing consistent across the system. Our data found that the largest savings from sourcing events don’t come from the “center of plate” items but rather the less critical items and can yield large, unexpected savings simply since they have not been focused on.

 

Foodservice best practice #6: Create a durable food quality and safety program with your partners 

A strong food quality and safety program should not only be able to provide quick resolution to customer safety issues, but also be capable of risk mitigation. 

Strong communication is critical, especially in a recall situation. It’s vital to analyze quality trend data to catch overarching issues with a specific product or supplier before they spread. Tracking data can contribute to a 35% increase in credit recaptures and incident resolution of less than 7 days. 

Supply chain technology allows for large scale communication within a single location, saving time when operators need to move fast. It also automates tasks and provides a workflow that facilitates collaboration and fast resolution with stores, suppliers and distributors.

 

Next Steps for your foodservice supply chain 

Without this, brand quality will falter, customer service will have poor reviews, and your operators will not perform to their best ability. Implementing foodservice best practices ensures your brand will experience a long, thriving future. 

Analyze every function and movement of your supply chain to identify opportunities for improvement. Is it identifying new sourcing opportunities? Is it instilling a new quality management process? We’d love to hear about it, and we’d love to talk you through it. 

6 best practices to mitigate foodservice supply chain challenges

To save these best practices and use them in your own foodservice supply chain, download a free infographic and reference in the future! 

Topics: Insider, Market Intelligence

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