supply chain planning | 6 mins read

How to Perfect Your Supply Chain Planning- 8 Solutions to These Common Problems

how to perfect your supply chain planning 8 solutions to these common problems 1647415347 6057
Sanchari Chatterjee

By Sanchari Chatterjee

What is Supply Chain Management?

Supply chain management (SCM) is the process of streamlining and managing the movement of a company's products or services from the source to the end-user. The end to end management of products and services is what is known as efficient and effective supply chain management.

In case of restaurants, retail chains and food service businesses, procuring raw products, bringing them into your food inventory and managing the goods in the inventory till they are used in the kitchen and delivered to the customer, is all part of the elaborate supply chain. This involves planning supply, inventory management, production planning, operations planning and various other tasks, before a business can declare it is on top of its supply chain execution.

The key steps involved in supply chain management of restaurants include sourcing of raw materials, logistics handling, production (using the ingredients in the kitchen to prepare food), distribution (to take sellable food products to end users) and inventory management.

How Does Supply Planning Impact the Bottomline?

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Just like inventory management, supply chain management is another key determinant for restaurants to see increased sales and profits. With the right supply chain plan, you can make sure the links between your supplies, production and distribution run seamlessly, without any breaks. This prevents wastage and improves efficiency, thus giving a boost to business operations.

With the right coordination between the supply chain, sales and operations teams, your restaurant's supply and demand system will run like a well-oiled machine. This will help the business improve its customer service and also optimize the chain execution.

Moreover, with robust supply chain planning, you will also reduce your inventory expenses as you won't be stuffing your kitchen with endless supplies and increasing your overhead costs. You can always replenish your stock as per your requirements in real time and get your suppliers to furnish you with the goods you need on time.

Online employee scheduling software that makes shift planning effortless.
Try it free for 14 days.

Supply Chain Challenges and Solutions- No. 1 Labor

Labor shortage has plagued the restaurant business the same way it has hit other retail and services businesses across the world. With the Covid-19 pandemic and lockdowns, movement has become restricted and further deepened the crisis. Technology and automation can reduce the burden on a strained workforce, while also getting more work done.

Restaurants can look to hire chefs, kitchen assistants and managers who can both, manage the supply chain as well as adapt to the use of new technology to perform various tasks.

  • A 2022 Oracle study says 'Cash is preferred globally, but is losing favor. 81% of people are planning to reduce their use of cash'.
  • The study has further found that there is an increasing preference for contactless payment methods, such as Apple Pay and Google Pay, with 40% preferring this method.

Supply Chain Challenges and Solutions- No. 2 Backorders

Global factors such as the pandemic, blockades at seaports, natural disasters and labor shortage have increased the volume of backorders and created a disparity in supply and demand across the world. The restaurant industry is also facing a similar crisis.

One way to address this challenge is by streamlining the planning process, having robust supply chain planning and chain execution mechanisms. Also, order early, follow business intelligence tools to get help with suggested ordering, and maintain a flexible inventory that can adapt to sales and operations needs.

Supply Chain Challenges and Solutions- No. 3 COGS

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Rising prices and Cost of Goods Sold (COGS) has worried restaurateurs across the world. This is only projected to go further up, particularly for meat and cheese. This also strains the supply chain, production planning and operation planning of restaurants.

However, restaurant owners can address this constraint by performing consistent COGS audits, engineering a cost-effective menu, deploying inventory management and project management strategies that reduce wastage, and optimizing their operations.

Online employee scheduling software that makes shift planning effortless.
Try it free for 14 days.

How Can Software Improve Supply Chain Planning?

With the number of tasks restaurants have to manage on a daily basis, and with a strained workforce, Restaurant Supply chain planning can become another headache.

1. A software solution will work to turn machine learning into task management and automation of the supply chain planning, demand planning and production planning operations of restaurants. Software systems can boost supply chain efficiency with business intelligence and also execute suggested actions.

2. From demand management to backlog management, production scheduling and supply chain collaboration, a supply chain management solution can address all the needs of a restaurant business. The system will also integrate with other management software, such as inventory management tools, POS systems, and so on, to make Business Operations more seamless.

3. The supply chain system will also analyze all your order and invoicing data and suggest future orders using business intelligence that will make sure you do not have to worry about the inventory running out.

4. Analyze demand as per different product categories or menu items by looking at the reports generated by the system. This will help you make better business decisions and boost growth.

Top 3 Supply Chain Software for Restaurants

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1. Zip Ordering- The Zip Ordering software offered by business management solutions provider Hubworks is a system that helps restaurants place orders within seconds, manages all invoices and optimize the ordering process. Here's a look at its offerings-

- Accurate order receiving- The Zip Ordering software will accurately keep track of each supply order that is received by your restaurant. If any item is damaged or unusable, you can adjust the receipts on the system and alert the supplier about the same.

- No over-ordering- The software is equipped with business intelligence tools that will help you place orders for the exact quantity you need in your inventory. The suggested ordering system will make sure you maintain the optimal inventory level and do not overstuff your kitchen.

- Tracking spendings- The system will also maintain records of all your orders, supplies and spending, and generate analytical reports to help you take a better look at your operations.

- Mobile ordering- The Zip Inventory mobile app will help managers and restaurant owners keep an eye on supply and demand, supply chain management, and sales and operations even when they are working remotely. You can also manage your orders on the go without having to turn up at the restaurant every time.

2. Oracle- The integrated suite of Oracle supply chain management solutions promises to help you manage your restaurant's supplies and menu planning with confidence. The software will help you with supply chain planning for multiple locations and franchises of your restaurant. The analytics tools will help you work on your key performance indicators, while you can optimize your inventory use and profits by proactively managing the supply and demand. The software will also seamlessly integrate with other management software, such as inventory management, warehouse management, POS systems etc.

3. E2Open- This is an online supply chain management system that offers features such as supply chain monitoring, analytics, supply chain planning, order processing management, order management, demand planning etc. The software will also take care of your restaurant's project management, inventory management and report tracking needs.

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