4 Tips and Best Practices for Restaurant Supply Chain Management

Restaurant Supply Chain July 26, 2020

Jin Hyun

Writer

The success of any restaurant is dependent on the supply chain it establishes to stock their kitchen with ingredients. With the rapid advancement of technology, the methods of inventory replenishment are quickly transforming.

Restaurants today are slowly turning to third party retailers online to meet their supply demands. Approximately 12% of restaurants are currently utilizing online third-party sellers to stock up their restaurants, while 40% of restaurants purchase supplies from online services on a monthly basis.

These statistics are only getting higher by the year and it's prudent for restaurants to think of their supply chains not only by what's been done in the past but also by focusing on more efficient and cost-saving ways for the future.

Importance of Proper Supply Chain Management

A restaurant supply chain is a process whereby restaurants establish a relationship with suppliers and distributors to produce menu items and meet customer orders. This can involve purchasing anything from food, beverages, napkins, plastic cups, and more. The food and beverage industry is dependent on the relationships that are established with vendors because one disruption in the chain management system could result in restaurants not being able to adequately serve their customers.

This is why it is incredibly important for restaurants to closely manage their supply chain networks. Keeping close tabs on the supply chain to ensure that it is operating efficiently can mean lower costs and more revenue. Since distributors in the supply chain are a restaurant's primary source of replenishment, disruptions to any of the ingredient suppliers can cause shortages in the kitchen.

If restaurant supply chain disruptions do occur, it can force establishments to search for emergency suppliers and drive up last-minute inventory purchasing costs.

How to Improve Your Supply Chain

There are many different ways to improve your supply chain. These are just six measures restaurants can implement to get the most out of their suppliers and the money they spend on inventory purchasing.

1. Acting on Changes in Demand in Real-Time
The benefit of relying on a digital supply chain tracking system is that it should offer insights that ultimately lead to actions. The digital management of a restaurant's network of suppliers should be able to detect changes in demand, correct any supply forecasts in response, and coordinate with suppliers on restocking the products appropriately. This must all be done in real-time and in response to changes in customer demand.

2. Consolidating Logistics and Warehouses
Simultaneously optimizing costs relating to transportation and inventory is another way to increase efficiency. This entails better optimizing the supply chain by turning to a demand-driven distribution of products rather than one that is fixed on a set schedule.

3. Tracking Where Your Supply Comes From
As a restaurant, serving food that is safe to consume is of the utmost importance. Thus, if there is an outbreak involved with the raw foods you receive, it's important for restaurants to be able to trace where the outbreak occurred. Food and beverage businesses utilizing automated inventory ordering systems are able to track this information and all purchase orders digitally.

4. Managing Your Promotions
Restaurants that offer promotions to their customers need to make sure that they won't run out of their current supply if the promotion is a success. Thus, management needs to be certain that product shortages won't occur by checking their quality management system to see their suppliers' distribution inventory.

Before any promotion is offered, restaurants need to know if the demand will be there and that accurate forecasting projections are in place. Ensuring that customer demands and forecasting models are accurate will help to prevent wastage and will save the restaurant valuable capital spent on excess stock.

Benefits of Inventory Ordering Software

A crucial component of the restaurant supply chain process is inventory replenishment. This important step can be easily automated using inventory ordering software to streamline supply chain and restocking procedures. Here are some benefits of using inventory ordering software.

Reduction in Costs - Stock ordering software is adept at monitoring inventory levels and ensuring that orders are placed well-ahead of stockouts while preventing overstocking. These systems can also be programmed to place orders automatically to save on labor-related costs.

Enough Inventory - For the restaurant industry, having inadequate amounts of inventory can lead to significant losses in sales. Ordering software can perpetually track ingredient levels and alert management when certain items reach their reorder points.

Less Wastage - Another benefit of utilizing replenishment software to maintain optimal levels of all inventory is the lack of food waste. Excessive restaurant food waste is not only harmful to the environment, but also to a business's budget as well. Wastage can indicate overspending on inventory and inaccurate demand forecasting.