How to manage the restaurant supply chain - challenges and strategies - Brand Points Plus Canada

How to manage the restaurant supply chain – challenges and strategies

The COVID-19 pandemic has placed unprecedented stresses on supply chains worldwide. Policies adapted to contain the spread of the virus have contributed to bottlenecks in farm labour, processing, transport and logistics and momentous shifts in demand, according to the OECD. Factory shutdowns and slowdowns, staff shortages, congested shipping routes and lean manufacturing with low inventories have all contributed to major obstructions at each stage of the supply chain. 

As some shipments are delayed or unavailable, foodservice operators are adapting and embracing flexibility. With recent storms knocking out primary supply routes, operators in B.C. and Newfoundland in particular have had additional challenges to face that exacerbate supply chain challenges.

“Buy what you need … and trust the system. The long-term goal of sourcing locally-made ingredients that are plentiful is the best way to shelter your business from disruptions.”

Peter De Bruyn, provincial chair of the BCRFA

Peter De Bruyn, provincial chair of the BCRFA, says the best way for foodservice operators to get through this is to “buy what you need, not necessarily overbuy, and trust the system. The long-term goal of sourcing locally-made ingredients that are plentiful is the best way to shelter your business from disruptions.” 

Experts recommend that foodservice operators focus on what they can control. That means nurturing strong (and local, when possible) partnerships, creating flexible menus that can be easily adapted, working out dish substitutions in advance, and keeping the lines of communication open with your staff, customers, and suppliers. 

Working with restaurant supplier

Building relationships to enhance supply links

  • Maintain good relationships with your suppliers to ensure adequate warning of any shortages or even price increases.  

By working with your foodservice distributors, operators can be better positioned to alleviate the impact on their business. “The supply challenges we have all faced have made the communication between operators and suppliers that much more important,” says Jason Voisey, purchasing manager at F. J. Wadden and Sons, based in Mount Pearl, Newfoundland. 

“When distributors communicate any supply issues to their operators as soon as possible, the operator can adjust or modify menu plans,” he adds. “Addressing the circumstance early and working closely together helps ease the frustration and improves the relationship.” 

Tips to streamline your menus and simplify kitchen operations 

  • Pay attention to which menu items are most impacted by restaurant supply chain issues.
  • Remove them or offer them as features when ingredients are available.
  • Reduce your number of items to those you are confident you can deliver for guests that day.
  • Be ready to adjust menus on short notice.
  • Make regular items feature items until ingredient supply returns to stability.
  • Ensure your menu prices can absorb small increases from rising costs. 
  • Pay attention to how today’s events will affect next week’s menu…and beyond.

Be flexible to achieve results

  • Build greater efficiency and stability of supply and don’t run out of menu items nearly as often. 

During these challenging times, being open to more generic products adds flexibility, Voisey advises. “Each operator has preferred products that they would like to use. By working with their distributors to understand which products are available, operators can find suitable alternatives. This may impact some recipes and plate profiles, but it can help keep items on the menu and avoid guest disappointment.” 

Suppliers may have several SKUs of similar products, and while some work well, others don’t, De Bruyn says. “Know what items you can easily substitute while you wait for your main supply to return.”

Managing expectations is important, adds Sylvain Charlebois, director, Agri-food Analytics Lab at Dalhousie University. “We are already seeing menus shrinking as well, which is not a bad strategy. Less could and will likely be better in the future, from a supply chain perspective.”

Carrying extra inventories can help get through the current challenges, Voisey says. “But equally, distributors have to monitor their carrying costs and cash flow closely.”

Supply chain restaurant industry

Assess your risk and plan ahead

  • Update your emergency plan to include the learning from this pandemic and supply disruptions. 

Audits and stress tests will become more critical for companies, Charlebois says. And more supplier options will also be critical if the company experiences a breach of some sort across the supply chain.

“Most companies have an emergency plan, but most did not include a strategy for dealing with a pandemic. Cybersecurity is another issue most companies will need a plan for, and that plan needs to be linked to the supply chain.”

Technology can help 

  • Online ordering systems, sales trackers and target marketers can mitigate restaurant supply chain impacts. 

Using technology by tracking sales helps the foodservice operator make more informed decisions when it comes deciding if an option should be kept on the menu, Voisey says. “Focusing on the most popular items and working with the supplier to ensure these items are available allows the operator to focus on what they can sell and not what is unavailable.” 

Data and technology are more important now than ever, and we generally have great access to it, De Bruyn says. “Most of us have point-of-sale systems; as well, we may have the data from our third-party delivery companies. This data can help us understand not only what products consumers are buying specifically, but what trends exist with purchasing behaviour. In times of supply shortages especially, there is no benefit to investing extra labour sourcing ingredients for a low-selling menu item.”

The use of more predictive analytics and forecasting are great tools to understand what lies ahead for foodservice businesses, Charlebois says. “We are expecting more companies in the sector to use promising technologies offered by machine learning, for example.” 

Ingredient tips

  • Develop or modify menus with ingredients that are common among several suppliers. 
  • Use reliable ingredients in several menu items wherever possible. 
  • Source local ingredients from trusted suppliers or even directly from farmers.  

Great idea 💡

If a popular menu item is unavailable for a time, advertise it on social media when it does return – even for just a limited time offer – to build diner excitement.

More information: 

Food Supply Chains and COVID-19: Impacts and Policy Lessons

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