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What is Restaurant Supply Chain Management? A Basic Introduction

  • Published on : 18/10/2016

A crucial factor behind the success stories of restaurants all over the world is the efficient supply chain management. This article serves as a guide for understanding supply chain management better and the various aspects involved.  

What is Restaurant Supply chain management?

In simple terms, Supply chain management (SCM) is a chain of processes/network that starts with the procurement of the raw material to deliver the final product to the customer. A restaurant has several elements such as buying raw materials, cooking the food items, taking orders, dining, billing and several backend processes. 

An effective supply chain management improves your restaurant’s competitiveness and helps you achieve drastic cost savings. With the advent of digital Supply chain management platforms, technology plays an integral role in managing restaurant supply chains. 

5 key elements of Restaurant supply chain management

  • Demand forecasting
  • Vendor management
  • Purchase order management
  • Inventory management
  • Consumption and Variance management

Let’s delve deep into the 5 major factors involved in managing a restaurant supply chain.

Demand forecasting

The starting point of successful supply chain cycle operations in restaurants is accurate demand forecasting. Based on the customer demand, they tweak items in the menu. Digital supply chain management platforms have made it pretty easy, as it provides valuable insights on the fast-moving items in the menu. It also aids in making optimum usage of your kitchen resources, cutting down overall grocery cost and grocery requirement.

Vendor management

Choosing the right vendor is quite important as it affects the quality and efficiency of your restaurant. The poor quality of food materials supplied can cause irreparable damage to your reputation. Cost is one more crucial factor and hence you need to compare the quality and prices of materials offered by various vendors and finalise the right one that fits your requirements. With the help of India’s leading cloud based restaurant management platforms such as inresto SCM, you can easily streamline vendor management by optimising prices and quantity.

Purchase order management

If you are a restaurant owner who is managing multiple outlets, the replenishment of orders may vary according to the eating habits of customers. The raw materials required for each outlet will be different and the quantity may also differ. The major advantage of using digital SCM platforms is that purchase orders are sent to relevant vendors from the central kitchen. This eliminates the possibility of errors and discrepancies when the purchase orders are raised by different outlets.   

Inventory management

It’s quite embarrassing when you run short of food materials and are unable to meet the demands of the diners at the restaurant. Disgruntled customers can tarnish your brand image and lead to drop in sales. To avoid the shortage of inventory, restaurants should maintain sufficient quantity of all the raw materials required in food preparation. 

Inresto SCM offers the amazing feature of real-time inventory tracking from any location, anytime. Based on the orders placed, the inventory status is updated automatically and you will receive timely notifications. Alerts on minimum threshold quantities specific to various outlets and locations will help you have better grip over inventory. 

Consumption and Variance management

In managing a restaurant, it’s essential to understand the quantity of inventory required in meal preparation and the actual consumption. It is termed as variance where the physical stock (currently counted inventory) is compared with the ideal stock (level of inventory that should be present). Consumption management is vital to ascertain if the restaurant is following the set of standards prescribed in food preparation. Reports can be generated using the digital SCM platforms that provide valuable insights on the stock variance and pilferage.

Parting Words

In a scenario when restaurants are operating on wafer thin margins, an efficient supply chain management can make a drastic difference. Digital SCM platforms have made it possible to have better grip over your supply chain that leads to cost savings and improved efficiency.  

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