Over the past two years, supply chain struggles have disrupted foodservice sectors across the board. While it’s undeniable that the pandemic has caused undue chaos, it’s just one of many factors that has complicated supply chain management. A shortage of truck drivers and supplies, inflation, and demand spikes (to name a few) have all contributed to the global strain on supply chains everywhere.
It’s safe to say these supply chain issues aren’t going away anytime soon, but by taking the right steps to minimize problems that stem from unnecessary 'surprises,' you can maintain (or maybe even improve) operations despite the challenges.
Improve demand forecasting
Keeping accurate inventory has always been tricky, but it’s even more complicated in today’s global supply chain landscape. Anticipating consumer demand is critical for foodservice suppliers, and not only that — supply chain survival depends on it. So how can you accurately forecast the inventory you’ll need?
This is where predictive analytics comes in. Predictive analytics is the use of historical and real-time (or near-real-time) data, statistical algorithms and machine learning to predict future outcomes. Sounds intense, right? Well, it can be. But in reality, your point-of-sale (POS) platform or a predictive analytics software that integrates with your POS solution (such as Decision Logic) can crunch the numbers and extract insights for you. This way, you’ll have the information you need to make smarter, more proactive forecasting and decisions.
Of course, getting demand right isn’t an exact science (even with all this technology). And if the past two years have taught us anything, it’s that unforeseeable events can throw a wrench into demand forecasting. External factors such as natural disasters or a pandemic are unpredictable. The good news is, the real-time (or near-real-time) data provided through predictive analytics can help you to develop a short-term demand forecast and improve your response time based on shifts in demand. With this kind of data at your fingertips, you can strategically react to even the most unexpected of supply chain issues and improve your inventory management.
Leverage emerging technologies
While predictive analytics can greatly enhance your supply chain planning, it’s just one of many emerging technologies foodservice operators can leverage to stay competitive. To prepare for future supply chain struggles and inevitable disruptions down the line, foodservice operators should also consider investing in other innovative technologies.
Two of the most prominent technologies that are revolutionizing supply chain processes are artificial intelligence (AI) and automation. And it’s easy to see why. As with anything, time is money in the supply chain game, and AI-enabled automation (yup, AI plus automation) helps organizations to streamline repetitive tasks. Creating such efficiencies allows businesses to reduce their labor costs and in turn, maximize their profit margins. What’s more, in times like these where the labor market is tight, businesses can leverage these technologies to thrive without the extra headcount. In fact, a recent forecast predicts that AI will create $5 trillion of business value by 2025.
Incorporating other innovations such as on-demand delivery, digitization, and the Internet of Things (IoT) can further streamline and enhance your supply chain processes. To stay ahead of the competition, it’s often beneficial to be an early adopter of these groundbreaking technologies. Drawing upon historical data will always be critical in supply chain planning and strategy, but it’s increasingly important for suppliers to look toward the future and evolve. These advanced technologies are an investment, but if you can outperform the competition, it just might be worth it.
Source from multiple suppliers
A smart sourcing strategy is a cornerstone of supply chain management, and it goes hand in hand with your risk management strategy. In other words, you can minimize your supply risk by using an effective sourcing strategy. Don’t put all of your eggs in one basket; use a multi-sourcing strategy. Too often, operators are tempted to purchase from a single supplier in the name of a deal, but that can be a bit short-sighted. Sure, lower pricing might be appealing upfront, but it’s risky business. If you’re relying on one supplier and they can’t deliver, it’ll cost you money in the long run.
To further safeguard your operations from supply chain disruptions, also be cautious about your reliance on international suppliers. As we’ve all experienced, lead times can be even longer than usual these days, and relying on international suppliers can complicate operations or lead to additional delays. To avoid this situation, diversify your suppliers and consider incorporating local providers. This will minimize your stress, and as an added benefit, you might get more competitive rates. If you’re working with multiple suppliers, you can use that as a bargaining tool to drive down prices.
Cultivate supplier relationships
The recent supply chain landscape has shined a spotlight on supplier relationships. If you haven’t done so already, now’s the time to take a step back and evaluate your suppliers. The value of the products and services you’re providing hinges greatly on your suppliers, so assess whether they’re meeting your expectations. Have they been transparent when it comes to communicating potential challenges or delays? Are they proactive about coming up with solutions and substitutes when products aren’t readily available? Do they do what they say?
Once you’ve determined which suppliers you’ll maintain an ongoing relationship with, make a point to cultivate deeper relationships with them. Keep up regular communication so you can build rapport and establish trust with them. By nurturing those relationships, you can gain more visibility into their demand and supply issues. With those insights, you can strategize better and react faster since you’ll have a better idea of what to expect. Not only that, but your suppliers will be more compelled to work hard and find solutions for you when times get tough, which will help you weather disruptions more easily.
Upgrade business operations despite supply chain challenges.
Foodservice operators today are up against more than their fair share of supply chain obstacles, but they’re not insurmountable. By incorporating the strategies we’ve discussed in this post, organizations can prepare for the worst, plan for the best, and ultimately, come out on top.
Supply chain woes aren’t the only overwhelming obstacle foodservice operators are facing today. Staffing shortages are another well-known issue across the foodservice industry. If you’re one of the many dealing with staffing shortages, here’s how you can ease your struggles.
