The supply chain is something that you hear in the news practically every day – especially when it gets disrupted. But how does the supply chain really work for restaurants?
Unfortunately, supply chains tend to be complicated, and one mistake along the way can set the whole system out of control. In the restaurant industry, supply chain mismanagement is a key contributor to food waste and climate change. It’s no exaggeration to say that improving these processes is critical for both the industry and the world.
In this post, we’ll discuss what the supply chain of a restaurant looks like and how restaurants can make it better.
What is the supply chain of a restaurant?
First, let’s consider the following stat: the supply chain management market is valued at $37.41 billion and is projected to grow 11% annually until at least 2027. That means there are plenty of opportunities in the space if managed correctly.
The supply chain of a restaurant essentially looks like this:
Restaurants establish relationships with suppliers and distributors
Suppliers then provide a wide variety of menu items like food, beverages, napkins, cups, silverware and more
While this process sounds simple enough, the speed that it must operate at is key. The restaurant industry is known for its fast pace, so any hiccup in the supply chain can have disastrous consequences. Imagine trying to run a steak house in the summer if your meat supplier is backlogged?
With strong competition across the industry, one slip up like this would lead to huge losses in sales and customers lost to competitors. Because of this, restaurants and suppliers need to maintain a constant flow of communication. Efficient operations across the supply chain lead to more revenue and lower costs.
How can restaurants manage the supply chain better?
Any mistake that happens along the supply chain can usually be labeled as an error in 1 of 5 basic components of restaurant supply chain management. Methodically managing each step will naturally improve the chain’s overall efficiency. Those 5 components are:
The first step of the supply chain process, like anything important, is planning. During this initial phase, restaurants use analytics to figure out the demand, so they know how much supply is needed.
Once demand and supply are determined, restaurants then search for vendors who can secure the goods/services. Key considerations for this step are lead time and the quality of the vendor. Choosing the wrong supplier can cost you huge amounts of time and money, so this component usually requires the most research.
This is the assembly, testing, and packaging process when vendors convert raw material into finished products.
We’re almost there! Once the products are assembled, they are then delivered to restaurants so they can get to market. Suppliers use a variety of delivery methods, including air, rail, and road.
The final component of the supply chain is where a lot of restaurants/suppliers make mistakes. This is the post-delivery customer support after the items have been delivered. Mismanaging relationships with your customers by being slow or lazy harms your brand image and your relationship with your customer. This is a critical mistake because, as the saying goes, the customer is king. Without customers, your business doesn’t exist.
This post has offered a basic breakdown of the supply chain in the restaurant industry. You can see how one small mistake along the way can have damaging consequences for restaurants and suppliers alike.
As supply chain issues continue to dominate international news, it’s more important than ever that you check in on your relationships with your suppliers.
If you’re looking for an easier way to communicate with all your suppliers without having to constantly chase them, consider our Choco app. Our app integrates seamlessly with all of your suppliers’ ERPs and allows you to communicate with every one of them in a centralized location – saving you tons of time and energy.