Now is the time to review your supply chain to:
- Ensure supplier stability and confidence in their ability to meet your deadlines today
- Deliver all of the products you need when you reopen at scale
- Review your pricing and rebate deals
Below are top five tips to help you shape your supply chain in an ever-evolving environment.
1. Streamline Your Supply Chain
When negotiating with suppliers, the larger the basket that they receive, the more competitive their pricing should be. This ratio is not just limited to the larger nationwide suppliers. If a smaller local supplier is guaranteed business, they are likely to provide better pricing and prioritize your order. Therefore, the more products that you can purchase from one supplier, the better.
Most hospitality establishments are working on reduced revenues and workforce, so reducing the number of suppliers in the supply chain will be positive and have a direct impact on both the loading bay, in terms of receiving. Finance will be pleased with fewer invoices to process!
2. Keep Stock Levels to a Minimum
As business levels continue to fluctuate since early Spring, it is important to keep stock levels to a minimum to preserve cash and minimize waste. When reviewing the requirements of your supply chain, flexibility of the supplier should be a big factor. You should to consider:
- What is their order cut off time?
- What is their schedule and will it be frequent enough to meet your demand?
- Can they guarantee a specific delivery time window?
- How much stock will they be holding and can they supply a business of your size?
3. Fix Pricing and Building Supplier Relations
However, lengthier fixed pricing may mean the supplier will offer less competitive rates, so it’s a careful balance of finding the best middle ground between you and the supplier so that everyone delivers predictability and a beneficial agreement. A general rule of thumb on the length of a price agreements is:
- Meat – Monthly
- Dairy – Monthly
- Fruit and vegetables – Monthly
- Fish and seafood – Weekly
- Dry goods – Every six months
- Chemicals and guest supplies etc – Annually
- Printing and stationary – Annually
It is a good idea to manage agreed pricing and contracts in a procurement system, where you can see clearly when a contract is up for a renewal or a price file is about to expire.
Supplier relationships are key in getting a good deal so keep in contact with your account manager to ensure they understand what your business looks like as the market constantly evolves.
4. Tidy up Your Procurement System
After a supplier’s pricing has been fixed, load the pricing into the system so that team members placing orders are confident that the price on the purchase order will be the price on the invoice, which will help the team to achieve their forecasts. Loading pricing will also enable you to effectively manage contracts and price agreements as end dates will be highlighted, giving you enough time to go to market to secure your future pricing agreements.
5. Supplier Compliance
You should ensure your suppliers are able to provide you with allergen data to load into your procurement system against your recipes so you can track the allergens in every dish.
To find out how to cut costs, not corners, to effectively manage your supply chain check out our procurement and inventory guide.
With states and local governments slowly lifting lockdown restrictions, restaurants and bars stand to improve revenues with increased occupancy and patrons more willing to eat inside.
A little over a year ago, global industries came to a standstill. It’s since been a challenging time for everyone, and our customers were some of the hardest hit by the economic fallout. We’re proud to have stood by them this entire time, and we want to celebrate this partnership on May the Fourth.
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