Any restaurant owner will tell you that the key to their success is an efficient supply chain. An eatery depends on the industry’s management system to meet the needs of its customers. However, it’s also a restaurant’s responsibility to ensure its processes are fully optimized for swift restocking.
Advanced technology has improved inventory management and transformed the business logistics landscape. Currently, many restaurants refer to third-party online merchants to stock up on ingredients and supplies. However, as inflation rises, it’s become more critical than ever for establishments to concentrate on efficiency and cost savings.
Why Supply Chain Management Matters
The restaurant business has long been a satisfying profession — however, it’s also had its challenges. The coronavirus pandemic hit the industry especially hard as nationwide shutdowns led to empty chairs, widespread layoffs and forced permanent closures.
Unfortunately, vaccines didn’t fix all the problems either. Although health measures and mass vaccination allowed for reopening, many eateries couldn’t survive the pandemic — and those that did now face a significant labor shortage and inflation with no end in sight.
Restaurant managers have had to get creative by modifying their menu offerings for customers to stay afloat amid delays and shortages of essential supplies and ingredients.
According to a survey by the National Restaurant Association, 88% of fine dining eateries have altered their menu offerings, while 81% of casual establishments did the same. Additionally, 91% of restaurants indicated their total food costs were significantly higher than before COVID-19.
The labor shortage also impacts restaurants struggling to hire cooks and servers. As for the supply chain, less help means more orders go unfilled. Commercial trucking companies have difficulty covering their own expenses, as a commercial truck can consume about $70,000 worth of diesel every year.
Nevertheless, restaurants must find ways to get past current setbacks as the supply chain is simply too critical for their survival.
4 Ways to Optimize a Restaurant Supply Chain
Finding solutions as quickly and efficiently as possible is paramount during a time when food waste and overspending could prove detrimental to dining establishments. In a sense, every crumb and dollar matters.
The use of new technologies can prove most effective in optimizing the restaurant supply chain — from inventory to purchasing to saving money. Here are four ways restaurants can apply digital tools to enhance their logistics operations.
Implement Digital Inventory Software
All restaurants have an inventory — somewhere on-site or remote where managers, waitstaff and chefs can grab whatever supplies and goods they need. Having an optimized inventory management system is critical for keeping restaurants fully operational.
Successful restaurants utilize the latest inventory management software to oversee and improve every aspect of their inventory. Digital tools employ automated features to reorder from suppliers, keep tabs on current stock, and track processing and shipping in real-time.
Perhaps the most valuable aspect of inventory management software is its accuracy. Reducing human error can better prevent costly mistakes and the risk of wasting important commodities.
Concentrate on Menu and Recipe Modeling
People never fully understand the challenges of menu engineering unless they’re in the restaurant business.
Creating a menu doesn’t just come down to your restaurant’s brand or theme — it must also consider what your customers want to eat when they visit. A winning menu should always be lucrative for your establishment.
Optimize your restaurant’s supply chain operations by reviewing your menu and determining what ingredients are essential for each recipe. This will help you decide what you should be purchasing in bulk from a supplier. It also lets you figure out exact quantities for each product and if your menu is as profitable as you initially thought.
Remember to examine your drink menu, as well. Customers will be looking for excellent taste, while your focus should be on providing quality ingredients at an affordable price for your bottom line.
For example, if your establishment specializes in the Kentucky Mule — a Moscow Mule alternative — you’ll have to afford a top-of-the-line bourbon to offset the ginger beer.
Automate With a PoS System
The latest point of sale (PoS) systems do a lot to improve your restaurant’s performance and allow you to increase savings.
Modern PoS systems are automated and can process customer orders and transactions. They also enhance the logistics aspect of restaurant management, such as inventory management, invoicing and supplier purchasing.
Managers seeking to optimize a restaurant supply chain will want to utilize the many valuable tools integrated into new PoS systems.
These technologies also deliver customizable reports that summarize business activities, contacts, sales, inventory and spending over a particular time frame. Managers can then use these reports to set new objectives for restaurant growth.
Expand Your Supplier Network
It’s difficult to anticipate inflation and supply shortages, so restaurants must optimize their supply strategy. Vendors are imperative to success.
That’s why it’s vital to nurture relationships with suppliers while also building an expanded network of new ones.
Let’s say your primary supplier cannot deliver the ingredients for your restaurant’s most famous dish. Having a backup vendor will ensure you get the essential elements in a timely manner.
Additionally, broadening your supplier base paves the way for future growth. As your restaurant’s operations increase, you may decide to franchise your brand elsewhere. The wider the supplier base, the more ongoing support you’ll have for growing your business in other cities and states.
An Optimized Supply Chain Builds Better Business
Running a restaurant takes commitment, determination, long hours and strategic planning. It also necessitates using the many digital tools and resources available to overcome the setbacks of a competitive market. Optimize your restaurant supply chain to build a better business and experience growth.
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