The restaurant industry is one of the most competitive arenas for business, making it essential for business owners in foodservice fields to understand what it takes to achieve long term success.
Restaurant vendors are companies that provide food-beverage businesses with everything from equipment supply to fresh ingredients.
A great relationship with restaurant vendors comes with timely deliveries, accessible payment terms, lower food costs, and consistent service - all of which affect a company's ability to satisfy patrons and run an efficient and successful business. In turn, this leads to the best return on the supply investment to enjoy higher profit margins.
If a restaurant is looking to enhance their chances of success in this competitive business, understanding the ins and outs of successful operations in this industry is vital, and the way a company works with vendors is a key part of this equation.
Essential Tips for Working with Restaurant Vendors
Maintaining strong relationships with vendors is one of the vital elements that will allow restaurant owners to reap consistent rewards in a highly functioning supply chain. The following tips should be taken into consideration when managing relationships with restaurant suppliers.
1. Choose Wisely
Companies shouldn't just pick the first restaurant vendor that they come across. It's necessary to research all available options for suppliers to see which vendor fits best with their business model.
Key points for choosing wisely-
- Read Reviews Online - Simply typing in the vendor's name and review' will yield helpful results. The Better Business Bureau website also has online reviews of many supplier companies.
- Get Advice - Ask local establishments in foodservice regarding which vendors they use - the local community can be helpful in sharing their knowledge.
Consider the following questions as you choose-
2. Consider Local vs. Larger Broad Line Vendors
- What are their credit terms?
- Does the delivery schedule work best for the model of your business's operating hours and needs?
- Is there a minimum or maximum order amount?
- What communication channels do they offer to stay in touch throughout the process? (The more communication channels there are between vendors and restaurants, the fewer mistakes and issues will come up).
Choosing local suppliers can offer the advantage of cheaper prices in not having to travel as far, as well as better quality product and fresher produce. Additionally, marketing locally sourced ingredients can appeal to health-conscious customers.
However, if a restaurant's operations require more volume, local suppliers may not be able to handle the load, whereas larger suppliers can offer bulk orders. Larger suppliers may also have more experience in the industry and an efficient supply chain in place from operating with a wide variety of clients.
Negotiations are part of the business and not just in the contract signing stage. Inspecting ingredients upon delivery is also where negotiations can take place. If an ingredient does not meet the established food safety regulations, restaurants should communicate this with the supplier and enquire what can be done to rectify the situation. Additionally, enquiring about prompts and deals is a smart move, as there may be potential discounts that would otherwise be missed.
4. Be Mindful
Food supplier companies are the parties that restaurants interact with most frequently, outside of the internal operational team of the restaurant. This means that companies should think about fostering a relationship with the vendor.
Another key quality to express in the relationship is respect. This goes for polite communication, respecting the boundaries of the contract, and the working hours of vendors. Treating suppliers with respect will help to enhance a more long-standing relationship with them.
Mutual trust is vital in maintaining mutually beneficial, long-term vendor relationships. Ask questions such as - Is there trust in the supplier to deliver on time and provide high-quality goods accurately? Similarly, would they trust that company to order on time and to pay when it's due? Trust goes both ways, and if a company is questioning an organization's integrity or are unsure of how deliveries will come and when it may be time to choose another supplier.
5. Evaluate and Respond
In managing relationships with vendors, it is important for companies to not just switch to autopilot and expect the supply chain to run itself, even if it has been working well. To get the most out of vendor transactions, a supply chain manager must stay aware of fluctuations in demand and have a quick service response to price and quality changes.
This ensures that the company is maintaining the most cost-effective way to do business with the supplier, especially when seasonality and other conditions can affect what they need or how the supplier does business. The simplest way to stay on top of things is to carefully read invoices, go through restaurant PO systems, review purchase order confirmations, or even use automated ordering software to gather this data and alert management when shifts occur.
6. Stay Informed
The best way to maintain a feeling of control over the supply chain process is for companies to hold quarterly business reviews. This is where the management team can have a conversation with vendors to assess, from both ends, how the relationship has been working, and what steps could be taken to make it work even better. This could be with any type of supplier - from equipment to food vendors.
It also allows management to bring up, in a formal setting, the topics of price changes, customer service, and ordering issues that may have been referenced in the past, but not yet formally addressed.
7. Use Software and Apps
In order to effectively manage restaurant vendor relationships, there needs to be accurate management of data. Inventory ordering software can allow restaurant managers to keep all records of orders with digital PO systems, track price fluctuations, and evaluate data from past stock to ensure that the purchasing of new inventory and ingredients from suppliers is based on projected demand.
A key element of maintaining strong relationships with restaurant suppliers is to have transparent systems in regards to inventory management. When stock replenishment processes are optimal, this increases accountability for vendors and prevents errors from disrupting the supply chain.