Foodservice companies and Mobile Ordering Software
Ok, I’d like to order a case of paper towels, 3 pounds of butter, 10 pounds of pork butts, 10 pounds of chicken wings, 2 gallons of mayonnaise, 3 dozen new forks and throw in a case of Lysol wipes.
Huh? Who orders this and who has this assortment of products on hand to meet demand? Well this is a typical exchange between a foodservice company representative and a food service operator such as a restauranteur.
Welcome to the complexities of the massive Foodservice industry.
First let’s get the basics:
- A foodservice distributor provides food and non-food products to restaurants, cafeterias, caterers, schools, hospitals and other facilities that prepare food.
- Their main function is to purchase large quantities of products from manufactures and suppliers and break them down for sale to smaller foodservice operators such as chefs, food service directors, food and beverage managers, and independent food preparation businesses.
- The foodservice distributor purchases, warehouses, sells (for this blog post we will focus in the Selling aspect of food service companies) , and delivers the products, providing food service operators with access to thousands of items from a single source.
- As of 2014 there were over 16,500 US companies engaged in the distribution of food products
- Foodservice is approximately a US $260 billion per year market
- The largest US foodservice company, Sysco, serves over 500,000 US based customers
The foodservice supply chain is complex with may parts. But today’s blog post will focus in on the selling and ordering aspect of foodservice companies.
A primary objective of foodservice companies is to ensure maximum freshness and minimize waste. This is difficult when food distribution companies are unable to accurately predict how much inventory is required to meet customer demand. Adding to the complexity is that demand can and does fluctuate from week to week. Demand is also subject to trends such as the recent popularity of organic foods or an emphasis on healthier eating.
Some supply chain management systems have made significant improvements in the data available to manage inventory levels needed to manage large inbound shipments of food. However there is still a gap in food distribution companies’ ability to accurately understand demand for their small and midsize customers.
Large customers such as grocery store chains have been placing their orders using EDI or wireless handheld devices for years, but that hasn’t been the method used by smaller grocery stores, convenience stores, and many restaurants. With smaller customers, paper processes or manual online order entry are still more common.
Food Distribution Challenges & Mobile Ordering
Mobile ordering software is one-way foodservice companies are rising to meet these challenges in food distribution.
- Improve Data Quality
- Eliminate Delays In the Fulfillment process
- Reduce Wasted Time and Inefficiency in the reordering process
Improve Data Quality
It wasn’t long ago that most ordering was done using paper catalogs and order forms. In fact many smaller independently operated grocery and convenience stores and restaurants still order this way.
For food distribution companies, this directly translates into poor data quality due to the inefficiency of having to manually re-key paper orders into an order management system. Even with a small error rate as low as 1% for manually entered orders, the problem is massive when a large quantity of small orders are taken in aggregate. Inaccuracy results in waste when too much or the wrong items are ordered. Inaccuracy also results in stock outs that negatively impact customer satisfaction when not enough is ordered.
Mobile order entry software offers a more streamlined alternative. Mobile ordering allows everyone including store employees, or food distribution sales reps, to enter orders directly into a mobile device, with no need to manually transfer information from a paper form in order to place the order. Data quality is dramatically improved makes it possible to respond much more quickly to unexpected fluctuations in demand – the information is available much more quickly.
Many food distribution customers reorder products on a scheduled basis. The schedules can vary but are usually daily, weekly or monthly depending on the needs of the customer and the ability of the distributor to schedule time with a sales rep.
This pre scheduled process means that when unexpected fluctuations in stock levels occur, the customer must wait to reorder, or must place a special order to restock the needed items. This negatively impacts customer satisfaction, and also can have a negative impact on the food distributor’s ability to predict inventory.
When mobile order entry software is integrated directly to the foodservice company’s distribution system many of the bottlenecks can be alleviated. Foodservice customers can enter orders on their own schedules, rather than the schedules of their distributors, and distributors can provide reorders more quickly. Foodservice customers can also see promotions and stock positions in near-real time allowing food distributors to more accurately predict and meet customer demand.
Wasted Time and Inefficiency
Another challenge for food distributors, especially those that rely on paper processes, is the time it takes for sales reps to manually enter orders from paper, or to spend valuable rep time on the phone for orders that require human intervention.
Food distributors that use mobile order technology report that they are see upto a 75% increase in order writing speed. This allows them to serve more customers in less time. When mobile order writing is combined with a direct integration into the foodservice companies’ back end system it reduces the amount of time that food distributors must spend in order to enter each order. Orders can be entered primarily by the customer themselves, which means food distribution companies can dedicate less time to entering orders, and more time on strategically partnering with customers to grow top line revenue.
Food supply chains are extremely complex. With mobile ordering software distribution companies are able to eliminate much of the waste that currently results from inaccurate demand forecasting, and serve customers more profitably.
So how does your foodservice company stack up to meet these challenges? Are you reaping the benefits of mobile order entry software?