Cost Reduction

5 Common Issues During a Supply Chain Assessment

Many restaurant owners get in to the business because of their ability to create culinary masterpieces. Others open a restaurant because of the social interactions, challenges, and potential monetary gain. Still others take the leap because of a segment on kitchen nightmares. Whatever the reason, many find themselves learning as they go when it comes to the mundane, but vitally important, everyday aspects of the business. One of these is the often under scrutinized supply chain.

What is a supply chain? It is the many intricate and complex pieces, people, activities and resources that are involved in obtaining and moving your product from your supplier to your customer. A well thought out supply chain is one of the keys to a successful restaurant, while lack of forethought can lead to wasted product, lost revenue, and putting your guests at risk of a foodborne illness. Fortunately, there are individuals and companies that can fill in the information gap and help you create a solid supply chain. This one area of restaurant management affects your food safety and security, pricing and quality.

In order to help you understand what may (and may not) be working for your particular supply chain, we spoke with Wade Winters, former Vice President of Supply Chain at Au Bon Pain and current Vice President of Supply Chain at Massachusetts-based Consolidated Concepts. His expertise lies in helping restaurants assess their supply chain, ridding it of processes that can eat up both profit and quality. He shared the five most common issues he sees during a supply chain assessment.

Accepting Deliveries

Important critical control points occur when your food is delivered. This includes checking the quality of the product, the temperature of both the product and the truck or vehicle it was transported in, and the specifications which include weight or case count.

Product Storage

Common issues with storage include bad organization in the cooler which leads to produce that is not stored in the correct location. Storing produce by the door, the warmest area of the refrigeration unit, is not a good choice for perishable items such as eggs, butter or milk. Another issue Winters sees on a regular basis is lack of product rotation which can lead to minimized shelf life and product waste.

Check your Trash Cans

Product waste led Winters to the third issue he encounters at restaurants and one of the first tasks he gives those responsible for the supply chain: “Check your trash can.” Take a good look in your trash bins and determine how much is actual waste and how much is usable product that wasn’t processed correctly by the kitchen due to lack of culinary skills, laziness, or poor management of product inventory.

Over-Specification

Specifications may include your grade of meat, produce size and quality, type of packaging, special trim as well as brand names. If you are over-specifying, you may be increasing your food cost with no actual value. For instance, you only want the highest quality, grade 1 avocados—a good choice if you are serving your guests the whole avocado, skin and all, on their dinner plate or offering table-side guacamole preparations. If, however, you are using the avocado in your customer’s sandwiches or salads, a grade 2 avocado would be a better choice. Why?  A grade 2 avocado may have some scarring or minor blemishes on the skin, but the delectable fruit on the inside is just the same. By making this one change that does not alter the quality of the product your guests receive, you’ve saved yourself $3 to $5 per case.

Processed Items

And last, but not least, is what Winters refers to as “One of the costliest mistakes restaurants make. Not considering further processed items overlooks labor cost, consistency, food safety, and, in many situations, actual cost.”

It makes perfect sense. If you can purchase product at a reduced cost and let your prep chefs do the trimming, it’s a no-brainer. But is it? An example of this often-misconstrued cost-saving theory is untrimmed chicken. Restaurants will opt for this type of poultry because it is often cheaper per pound than processed chicken. However, when you factor in the actual labor costs and the unusable product that you trim off, you’re often paying more than had you purchased the pre-processed product! Winter believes that with the steadily increasing wage hikes, the tradeoff between buying pre-processed and processing in-house needs to be re-evaluated often.

Other examples of cost-saving pre-processed food includes pre-cut vegetables, pre-trimmed and tenderized flap meat, and pre-portioned salmon. Salmon requires a high-level of skill to trim and prep well. In addition, if you don’t use the skin, there can be a lot of waste.

Leaving this aspect of the supply chain to suppliers that have advanced equipment and technology that makes processing quick and efficient should be a strong consideration. When you consider that many of these establishments are also required to undergo rigorous inspections that lead to third-party safe food certifications, you come to understand that you are not only improving profit, you’re also offering a safer product.

Keep in mind that the pre-processed option does not have to be an all-or-nothing choice. Many restaurants combine both to create the best and most profitable supply chain. Taking the time to assess and evaluate your restaurant’s current supply chain against best practices provides opportunity for improvement in both your customer experience and your bottom line.

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