Top Strategies Restaurants Should Use To Reduce Supply Chain Impacts

Share on facebook
Share on twitter
Share on linkedin

The restaurant industry is facing major impacts from COVID with issues in the supply chain. The issues begin all the way at the top; from the growers/farmers facing labor challenges. It then travels down through the manufacturers. The manufacturers are having trouble with the roller coaster opening and closing of the economy, making it difficult to forecast properly. Next, it reaches the distributors who are dealing with limited truck drivers with new routes. This domino-like effect continues to rip its way through almost every industry. Business owners are having to pivot and adapt to ensure they can satisfy their clientele. With proper and strategic planning there are ways to mitigate the impacts of the supply chain issues. During this week’s episode of The Tip Share, we break down 5 strategies in which restaurateurs can overcome the industry’s latest obstacle.

Supply chain issues – The background

Where does it all begin?

COVID impacts on the supply chain

  • Growers/Farmers
    • Labor challenges
  • Product Manufacturers
    • Labor challenges
      • In states across the Nation, employees could make more money being on Extended Unemployment because those wages were paying more than the state’s minimum wage
    • Economy issues making it difficult to forecast properly with how much product to carry
    • Slimmed-down offerings due to market volatility
  • Distributors
    • Manufacturer back-orders
      • Fill rates used to sit at 97% and now they’re down to 91% (6pt increase in backorders)
    • Finding/retaining drivers
      • This was an issue even before COVID but has only gotten worse

5 Simple strategies to help curb supply chain disruptions

1.  If possible, consolidate to a single distributor

  • Now is not the time to shop vendors – operators can leverage their current relationships
  • This allows for a true partnership to form between operators and their distributor
    • You can create a deeper level of engagement with your distributor so they can help strategize WITH you so both parties can mitigate the impacts of the current operational challenges
  • Distributors will be more willing to go the extra mile if they know that they are going to be delivering big orders consistently to certain restaurants

2.  Change your delivery day

  • Distributors are busiest on the weekends, especially Fridays
    • Ask your rep about those Skip days – what’s best for the distributor?
      • If restaurants can re-strategize their ordering to work in a ‘skip day’ that will be most beneficial to the Distributors
        • For example, if you normally have a Friday delivery…consider a Tuesday/Thursday delivery and get your weekend inventory in early
        • What is the most available capacity day for drivers/deliveries?
        • What day/night makes the most sense?
        • Will a truck be in your area?
          • Driver routes have changed so it’s beneficial for operators to understand where in the route they’re at and can plan accordingly with their distributor

WATCH THE FULL VIDEO BELOW!

3.  Order EARLY

  • Ordering early enables your distributor to react and produce possible substitution items if necessary
  • Give your distributor as much time as possible
    • Orders that are filled first are typically the orders that are placed first
  • If you are placing bulk orders, place them EARLY in the week so the distributor can plan for that

4.  Allow for flexibility in a less tightly run inventory

  • When it comes to critical items that drive money for your business, consider keeping more of those items on hand
    • This works especially well for the less perishable items like dry goods

5.  Consider key drops and turnkey deliveries

  • If you feel comfortable with it, provide your driver a code to the back door or a key to your restaurant
  • Keep in mind, these deliveries generally must be 50+ cases (large orders) for it to make sense
    • The driver can bring your pallet off the truck, then place it where needed (i.e. dry with dry, cold in the refrigerator, and frozen in the freezer)
  • This enables your distributor to service you at any hour; when it’s most convenient for their schedule

LISTEN TO THE FULL PODCAST EPISODE BELOW!