Dealing with supply chain in the hospitality industry used to be pretty simple. You figured out what you needed to buy and then beat everyone up to get the best price.
Welcome to 2016, and the new world of supply chain. Yes, you still have to get the best price on like items, but if that is all you are focused on, time has passed you by. It is very hard to count on stability in most fronts and the products that are available in today’s marketplace continue to change at a furious pace.
Droughts, heavy rain, extreme snow, hurricanes, earthquakes and more. The weather patterns are extreme and can’t be planned. These weather conditions will cause transportation costs to rise. Meanwhile, the price of food and supplies also are fluctuating to the extreme. And despite the fact that fuel is low right now, how long will that last?
To best respond to the innumerable changes, supply chain professionals need to be more nimble than ever.
It is no longer simple to create a menu and forget about it for a year. Yes, you can lock some products in for a year, but you will pay a premium. What about produce? Are you ready to put specific vegetables like asparagus and brussel sprouts on your menu long term? Based on the markets, there is great risk in doing that.
Operators should consider what is a good value and what is not? A spike in a key protein for a restaurant brand can completely distort food costs and ultimately the bottom line. Since you are not going to eliminate this protein, you need to react appropriately. Consider what other proteins are available to use as an LTO. Additionally, where are there other savings opportunities to offset the rising costs you are dealing with?
All of these things must be taken into consideration in order to ensure you are utilizing the best your supply chain has to offer and at reasonable costs.
Another factor in the supply chain world of 2016 is that there is too much to do and not enough time. Supply chain staffs are being reduced and there are many more moving parts to contend with. There are opportunities to work with group purchasing organizations, purchasing partners and consultants, who are all able to help. Distributors also are getting more active in trying to support their customers.
The question that supply chain professionals should ask themselves is who can they trust? They need the help and support, but must make sure there is no agenda from the potential partner. Anyone working with supply chain professionals needs to be transparent and should be working on behalf of the operator who is their partner.
Today’s consumer also is much more complex than ever. Many are looking for fresh, organic, local, and additive-free ingredients, along with so much more. Consumers want transparency and they want to understand what they are eating. It is much more important today to purchase the right product for the job. For example, the tomatoes you purchase for chopping and using in salsa should be quite a bit different than the ones that you purchase for your salads. Spend where you need to spend, but save where you can save. Sometimes spending more can cost you less.
With the changing world of supply chain, the hospitality industry needs to change with it. Companies must either invest in their own supply chain departments or bring partners in who can support them. Standing pat will only result in increased costs.
Source: fastcasual.com, 9-21-2016