The pandemic showed us that a lot of things can change in the blink of an eye. As restaurants across the country—and beyond—were closed down due to shelter-in-place orders, many restaurant owners and managers were left with inventory they couldn’t move, resulting in a significant loss of revenue across the board. Now that things are getting back to normal, it’s time to assess how internal process are working. Is there something that can be changed to improve things going forward? Can greater supply chain visibility help restaurants manage price fluctuations? The answer is, absolutely! Let’s take a look.
Why Supply Chain Visibility is Key
Visibility into the inner working of food and beverage supply chains is imperative. When you gain insight into shipment status, for example, you’ll be better able to plan your menu to ensure you don’t have food waste or run out of popular items. Of course, that’s just one feature of genuine supply chain visibility.
Complex supply chains often combine costs, though, which can muddy the waters when you’re trying to understand the changes that have occurred to pricing structures and adjust your rates accordingly. If you use a best-in-class technology solution, however, you’ll be able to distinguish all cost components, including transportation and logistics facilities. This separation of costs will give you a transparent view of changes while also facilitating an easy alignment of payments based on established contracts. When you know precisely where a shipment is and how its fees break down, you can more exactly track supplier and distributor execution over time. This, in the end, can lead to greater efficiency and cost savings.
The F&B Industry Needs Connected Supply Chains
It’s no longer enough to simply manage the supply chain; it’s critical to view the supply chain as a roadmap so you can plan various routes and stopping points, ensuring optimal flexibility along the way.
Digital technology connects F&B manufacturers and other segments of the industry to their trading partners, giving greater visibility into the extended supply chain. These capabilities provide critical real-time customer demand, inventory management, and logistics data that give front-line managers the tools they need to effectively respond to changes in market conditions.
Like any industry, greater insight into the food-and-beverage supply chain, when paired with a quality digital management solution, allows operators to quickly identify issues and risks within the supply chain. These solutions seamlessly connect various aspects of the supply chain and:
- Analyze all suppliers’ quality-management processes
- Examine test results, ingredient specifications, and certificate of analysis (COA) data
- Simplify the handling of non-conformances and supplier corrective action requests
- Connect all activities with audit management
- Help enterprises quickly adapt to new compliance regulations
Harnessing the Power of End-to-end Supply Chain Visibility in the F&B Industry
It’s no secret that price fluctuations are a major discomfort in the food and beverage industry. Prices change for any number of reasons, from basic consumer supply and demand to bottlenecks within the production or food inspection processes. When you harness the power of supply chain control towers and well-built ERP systems, you’ll have time to communicate product shortages to your customers so they can take appropriate actions.
In terms of managing price fluctuations, supply chain control towers can perform complex analyses using real-time data in a variety of ways that simply aren’t possible for humans to compute. As time goes on, you’ll collect even more data, allowing you to more accurately make annual, seasonal, monthly, or even weekly predictions. You’ll be able to detect certain anomalies that can impact your prices.
It’s important to monitor what’s going on in the supply chain, both upstream and downstream. You obviously need to have a pulse on what’s going on downstream (in other words, what customers are buying in grocery stores and eateries), but you also need to know what’s happening upstream—what is the supply situation? How is the labor market looking? If there’s a labor shortage on farms or in factories, you might soon see product shortages or spikes in prices.
What Do You Do When You Recognize a Change Coming?
Being aware of possible problems is only part of the equation. You also need to know what you do when you spot these potential issues. If you think a surplus of product is coming as a result of anticipated low demand, you can offer promos or discounts to avoid the obsolescence of inventory. On the other hand, if you think your product is still going to fall short after ramping up production, you still have some options. You could balance the supply-and-demand logistics by altering your price levers, or you could explore substitutability.
When suppliers are transparent and communicative about shortages and overstocks, their customers can explore alternatives. No matter where your business falls in this process, visibility is a vital component to success.
Is Your Legacy ERP Holding Your Food and Beverage Business Back?
If you can’t immediately answer, “No!”, it’s highly likely that the answer is yes. You see, outdated legacy ERP systems aren’t robust enough to handle today’s customers’ needs. Ultimately, you could be spending a lot of money that isn’t making you any money in the long run. To learn more about the signs that your legacy ERP may be holding your F&B business back, download our whitepaper today!