Foodservice Industry Embraces Supply Chain Management Software

Management software has been well established in the foodservice industry, but it does not typically include supply chain management. As restaurant operators become more cognizant of the need to manage their supply chains, many are beginning to embrace supply chain management software.

Ric Scicchitano, executive vice president of food and supply chain at Corner Bakery Café, a fast-casual chain with 195 restaurants in 28 states, began researching a better way to control spending and inventory four years ago. There were more than 120 restaurants in the chain at the time. Scicchitano did not think there was enough control over inventory and purchasing, so he began to explore supply chain software.

“The restaurant industry is low tech,” Scicchitano says. “You’d be shocked to find out how many people don’t have a robust piece of software to manage their supply chain.”

After studying its options, the company deployed ArrowStream’s OnDemand supply chain software to improve inventory visibility. “OnDemand gives us the robust ability to see up and down the supply chain in every which way, what’s coming in, what’s going out the café doors,” Scicchitano says. “What’s the distributor inventory, what’s the inbound, what’s the outbound?” The data makes demand inventory forecasting easier.

“When you manage the supply chain, you’re really trying to leverage the margin on your P&L,” Scicchitano says. “If I can take my food costs down from 25 percent to 24 percent, that’s a huge win on the P&L.”

Visibility Makes a Difference

“Having visibility gives us the ability to make decisions in a timely manner,” Scicchitano says. This is especially important in managing promotions, which is a major part of the business.

It isn’t unusual for a restaurant organization to find distributors holding excess inventory once a promotion ends. “If you were watching it, week one and week two and week three into the promotion, you can rebalance the system,” he says. “You can tell manufacturers, ‘don’t ship any more to that distributor.’ It’s really about timely information at your fingertips. You can react to the business proactively versus reactively.”

Corner Bakery Café now checks with distributors in advance of promotions to make sure they have the necessary inventory. “From the standpoint of visibility of what’s going on behind the scenes, you can actually peer into the distributor’s warehouse and make sure they’re doing what we tell them to do.”

“How do we trust and verify that the people we pay to do their jobs are actually doing their jobs?” Scicchitano asks.