Supply chain management: a complete guide

Although it may not be the most attractive aspect of learning restaurant management, mastering restaurant supply chain management is one of the most crucial. You will find it difficult to manage your restaurant profitably if you don’t know how to source, source, and buy raw materials and supplies.

However, where should a new restaurateur begin? There’s no reason to freak out. Take this article as your quick-start manual for managing the supply chain for restaurants.

What is supply chain management for restaurants?

Supply chain management for restaurants is a sophisticated and technical topic. You must first comprehend what a supply chain is in order to comprehend what it entails.

The process of receiving raw materials at the point of origin, turning them into marketable goods, and distributing them to clients is known as the supply chain. Working with a variety of specialized suppliers at each stage of the supply chain is normal for these phases.

In order to maximize efficiency and value, your supply chain should be actively monitored and managed.

Establishing and maintaining connections with food suppliers in order to provide goods, or meals, that satisfy consumer requests is a key component of managing a restaurant’s supply chain. 

Managing a restaurant’s supply chain aids in ensuring that every “link” in the chain performs as intended, much as managing a restaurant helps ensure that workers are on the proper track.

An extensive, detailed look at the components of a restaurant’s supply chain is provided below:

  • Choosing and negotiating contracts with wholesale food distributors, farmers, and vendors of takeout containers and paper goods are all part of the process of sourcing raw materials for restaurants.
  • Logistics: look for partners who can provide the ingredients to your restaurant.
  • Production is the process of turning raw materials into marketable goods. This refers to the magic that happens in the kitchen for eateries.
  • Distribution is the process of getting your sellable goods to clients. Transporting food from the kitchen to the dining area is a simple example of restaurant logistics; deliveries to customers’ homes are a more complicated example.

Keeping track of supplies will help you choose how much to order and when it’s time to reorder them.

In an ideal scenario, everything will be ok once your supply chain has been established through agreements with suppliers. Unfortunately, supply problems for restaurants happen frequently and have a big effect on the sector.

For instance, many persons involved in agriculture and food distribution were unable to work at the height of the covid-19 epidemic due to unsafe conditions and lockdown measures. 

This implies that fewer raw materials were available when restaurants were prepared to reopen when lockdown restrictions were released, making it harder for them to consistently procure enough products to meet demand. 

Prices increased as a result of the commodities’ strong demand and poor availability. Restaurants are hiking their pricing to offset growing food supply expenses.

All of this is to imply that, while rarely being taken into account, restaurant supply chain management has a significant impact on daily business operations.

Inventory management and the supply chain interaction

The supply chain includes inventory management as an essential component. It keeps your kitchen operating efficiently and your customers satisfied.

Keeping track of the supplies and ingredients you have on hand will help you predict when you’ll run out and need to place another order. Your demand and purchase decisions are influenced by it.

In a survey by oracle, it was shown that 87% of businesses could cut their inventory expenses by 22% if they had better visibility into their supply chain.

The less inventory you need to buy, the better off your supply chain will be managed. And ordering what you need—no more, no less—is simpler when you can base your decisions on precise data and predictions rather than hunches.

Best practices for restaurant supply chain management

Here are some best practices that will position you for success if you’re new to restaurant supply chain management and logistics.

If you need restaurant supplies, inventory management software supply chain lifecycle, or food delivery partners, shop around for the cheapest prices. You receive a fantastic price when foodservice providers compete for your business.

Regularly review your providers.

You are not required to spend the rest of your life working with the same logistics and food suppliers for restaurants. Consider changing suppliers if you can find better offers and better service elsewhere. 

Review your suppliers’ rates at least once a year, if not more frequently. But first, check to see whether you’re not obligated to long-term agreements that you can’t break.

Become a part of a group.

Strength is unity. You can save money on supplies by signing up for a group buying organization rather than shopping alone.

Work with restaurant suppliers who can assist more than one step in your chain to streamline your supply chain. In order to avoid having to pick up ingredients, seek for vendors who can source them and transport them to you.

Consider the advantages and disadvantages of diy projects.

Determine which parts of your supply chain should be handled internally and which should be outsourced. For instance, it can make sense for you to make your own food delivery even though it might be worth paying a premium for food suppliers to bring ingredients to your restaurant rather than purchasing them from a market. Rather than hiring a fleet from a third party to transport food supplies.

Make that you have sufficient materials for promotions.

What could be worse than introducing a new product or campaign to little interest? Many people are interested in it, but they are unable to purchase it because your restaurant is running out on the necessary ingredients. 

Even though exclusivity might be advantageous when it is created consciously, when it is created accidentally, it is just bad for company. Make sure you have adequate stock to handle the increased demand if you’re introducing a new dish or sending out coupons for a certain item. 

Make sure your marketing initiatives are in line with supply chain capacity. To ensure you’ll have enough chicken for your new sandwich or enough coconut milk for your new latte, check the supply prediction.

Software can help you run your business more efficiently.

Technologies used in restaurants, such as inventory management and supply chain management software, make it easier to do time-consuming but crucial tasks including maintaining inventory, refilling restaurant supplies, coordinating with suppliers, and keeping an eye on supply delivery. 

By using these technologies, these activities can be finished faster. Additionally, you can automate many of these tasks if your restaurant’s checkout system includes inventory management capabilities or links with supply chain management solutions.

Follow your supplies back to their origin.

Food safety depends on knowing where your raw materials are coming from. Do you recall the  Coli outbreaks from 10 years ago? Key salad ingredients like romaine and spinach were in short supply because this was related to leafy greens. 

Keep abreast of agricultural news from the areas where your ingredients are supplied to be able to spot supply chain disruptions early and adjust your menu or order accordingly.

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