What is Restaurant Supply Chain Management and Why It Matters in 2024

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A restaurant goes through an incredible amount of supplies on a regular basis. The majority of ingredients are only good when they’re fresh, and some even become a massive health hazard when they’re not.

Between time constraints and space limitations, there’s a lot that can go wrong.

Today, we’re going to talk about why good restaurant supply chain management matters in 2024. We’ll also introduce tools and best practices to improve the way your restaurant’s supply chain works.

Restaurant and Bar Management Software

Building great vendor relationships

While a small restaurant can sometimes send a chef to a farmers’ market, the truth is that, in order to run a strong restaurant business, you need a reliable supplier

Now, since the majority of modern deliveries are managed using AI for fleet management, the problem is never of a technical nature. More likely than not, it’s either a communication or relationship issue. 

In the restaurant business, you’re working with food, which means that the majority of ingredients that you use are perishables, which need to be used and replenished by a certain date. This means that the ability of your supplier to deliver these products on a regular basis directly impacts the effectiveness of your business.

Their failure to deliver will result in downtime or your inability to keep up with your own menu. Both of these are harmful to your reputation.

The thing is that a lot of restaurants complain about their vendors when the logistics actually fail on their part. Paying on time, preparing to take over the delivery, order consistency, and sticking to the agreement is crucial. 

In the supply chain, everyone has to do their part; otherwise, there’s a delay that hurts everyone’s profit. With better restaurant supply chain management, you’ll ensure that your side never causes a delay.

This will significantly affect your reputation in the business world, as well as the future collaboration with the said supplier. 

Achieving better food quality consistency

One of the most important things you can do for your restaurant is ensure consistent quality of ingredients.

But how do you monitor quality of ingredients as they come in? Will you pause to examine every single piece of meat and vegetable that arrives in the delivery? Will you notice a gradual drop in ingredient quality (we’re talking about a subtle drop at first, not an immediate dive)?

Most likely, you’ll need to put some trust in your supplier, which is why you should choose a supplier you can trust. You should also keep the relationship with on a level where you can speak openly and candidly every time you have a complaint or concern.

But noticing the details does mean you have to pay attention to what’s being delivered. That’s why you should still have a system in place for checking the quality of ingredients as you receive them.

This is even more important in the restaurant industry because of food safety. When a supplier makes a mistake that a restaurant doesn’t notice, this can result in a disaster. A single (major) mistake can ruin your restaurant and even affect lives. 

With a good supply chain management system, you have a much easier job of keeping all of this in check.

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Implementing a centralized ordering system

With modern inventory-tracking technologies, you have a way of tracking your supplies in real-time. If you combine this with a tool like a retail store closing checklist, you have a much sturdier system that helps centralize your ordering system.

Have every order go through a platform and find a way to integrate this system with your inventory management tools. As we’ve said, you don’t necessarily need a tool that specializes in restaurants.

Sure, the hospitality industry is closer to a service than the goods industry, but from the perspective of supply chain management, it’s easier to approach it from the perspective of retail. 

This means that every time your supplies get to a critically low level, the person in charge of supply management gets a notification. This is very important in the restaurant industry, especially because you won’t use up all of the supplies at the same rate. Sure, some are going to perish by a specific date, but you always aim to use them way before that.

While estimates from seasoned chefs can be shockingly accurate, there are just too many supplies to keep track of. You want your orders and order schedules to be data-based. The best way to do this is to centralize the system. 

Sustainability and social responsibility

Next, as a restaurant owner, you have an ethical responsibility that will affect your brand’s reputation in so many different ways. 

First of all, the best reputation you can get in the restaurant industry is the one regarding the quality and freshness of your ingredients. This is directly impacted by your restaurant’s supply chain management. When they falter, the reputation will dip, with many loyal patrons slowly chipping away.

Another thing to keep in mind is the fact that, when it comes to food, there are so many ethical and moral discussions going on. From ethical farming all the way to organic vs. GMO. Being on the right side of the debate can come to define your restaurant not just as a brand but as a business.

Then, there’s the issue of authenticity and the fact that you’re a locally-owned business. In an environment where ethical business practices are more in the spotlight than before, the fact that you’re a local business is a huge plus

Even if it’s not a local business, you probably want to look for companies that employ green delivery practices. For instance, you can look for suppliers with eclectic fleets, ideally those who use amazing management and analysis tools, like cutting-edge battery management software.

This, however, means that you are expected to find local suppliers (local grocery stores and farmer’s markets). This way, the perceived freshness of ingredients is much higher, and the quality is seen as better, as well. Most importantly, there’s no extra pollution caused by the transportation.

Better storage practices

As we’ve mentioned, you’ll spend a lot of time working with perishables in this industry. A negative outcome when it comes to the storage will result in a massive material loss (in the best case) and a massive poisoning (as the worst possible outcome).

This is even without taking into consideration various unpredictable food allergies

Now, the biggest reason why this is discussed in the section about supply chain management is because the decay of these ingredients doesn’t happen just in storage.

Sure, everyone monitors and controls the temperature during storage, but food decays in transit, as well. This is especially the case with specific foods that have to be transported over long distances.

You also need to ensure standardized storage procedures like stacking practices. This will ensure better accessibility, better use of storage space, and, overall, better outcomes. The question of item retrieval sounds like a minor thing, but during rush hour, it can affect the entire process of your restaurant by a huge margin. 

Most importantly, this helps you greatly during the establishment of your own FIFO (first-in, first-out) practices. This way, the old stock is used before the new stock, which results in optimal resource management. 

More accurate demand forecast

In an ideal world, your kitchen staff should never have to worry about the supplies running out. All they would have to do is report as they’re spending ingredients and have someone else worry about restocking them.

While reporting 86es is a common restaurant management practice, it doesn’t have to be this way. The people in charge of logistics should have noticed that an ingredient was getting low and dealt with it before it became a problem. 

You can’t always afford to be reactive. Some supplies need to be replenished every few days, especially on weekends and special events like Valentine’s Day or International Women’s Day. 

This is why making projections is so important. Sure, today, it can be done with analytical tools powered by AI technology; however, it’s still the responsibility of the supply chain management team (or person in charge) to supply the system with data and supervise it.

Not only that, but this practice can also help the marketing aspect of your restaurant.

By making smarter supply chain calls, you can be well stocked-up during these key events and create a smarter management process for promotions and specials.

Your supplies shouldn’t dictate your menu. Instead, you need to make a supply chain that will enable you to have the menu that you want.

Restaurant supply chain management is pivotal to the proper organization of any restaurant

In order for your menu to be consistently good, your customers satisfied, and your restaurant operational, you need to sort out the issues regarding the supply chain as soon as possible.

Today, you have the tools and systems to make this possible, which means that you have all you need to make this system work.

Article guest authored by by Srdjan Gombar.

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