Pizza from a chain restaurant

What the restaurant industry can leverage from the retail revolution

By Erick Rowe, VP Industry Strategy, Infor Retail

Retail’s digital disruption has reached far and wide – yet, the industry has still found a way to bounce back with some of the most exciting, entertaining, and personalized shopping experiences we have ever seen. Now that consumers have seen and experienced what is possible, they expect the same level of service across every transaction they encounter, and that includes support they receive in the foodservice industry.

Much like the retail world is fighting for balance between “free shipping” and long-term profitability, the restaurant industry faces the challenge of reconciling sales with the rising cost and consumer expectations for delivery. It is exactly this weakness that is hurting big chain restaurants today – and what will likely lead to their ultimate demise if they do not strike the right balance soon. Further, the rise of food delivery apps like Seamless and Uber Eats have contributed to food and beverage spending—and when you consider that Millennials spend 44% of their food dollars on eating out five times a week instead of cooking at home, the race to win their business (and their parents’ business) is on.

So, how can food and beverage chains expect to win all those dining dollars from the savviest, most plugged-in consumer market that has ever existed, without breaking the bank on marketing and expensive delivery options? If the retail revolution has taught us anything, Distributed Order Management (DOM) on a globally networked supply chain is a great place to start. With the next generation of science-based solution for DOM in place, called “Networked Order Management (NOM)”, the restaurant industry will be able to predict, prioritize, place, and promote products when and where they are needed the most. Overall, this will make customers happy from the first bite to the last. Here is how:

Predict: Let science do the heavy lifting

A next-gen NOM will use machine learning and the power of predictive analytics to optimize fulfillment, taking the guesswork out of decision-making that could result in missed opportunities, excess waste, or stock-outs when demand is high. You may know that Guinness sales at your restaurant skyrocket every St. Patrick’s Day and plan accordingly, but this algorithm can take other factors into account too, like the day of the week and even weather forecasts to better estimate daily demand throughout March. Further, with a truly networked approach, your distributors will automatically be informed of what you expect to be delivered.

Prioritize: Choose the path of least resistance

NOM will provide the flexibility to choose what is important to your business and your customers, and build a fulfillment plan based on those nuances. Only want to serve non-GMO, hormone- and preservative-free foods that are ethically farmed and shipped? With a networked supply chain that is quick, agile, and fully transparent, sustainability has never been simpler. Plus, once decisions about your assortment have already been made, NOM gives you the freedom to make changes on the fly in the event of a recall, unforeseen product shortage, or supply chain mishap. Additionally, you can customize your options to always choose the most environmentally-friendly or cost-efficient path for delivery.

Place: What you need, when and where you need it

When DOM solutions are plugged into a global supply chain network, the system could automatically detect the best fulfilment path for a particular consumer or location, regardless of whether you own a regional restaurant chain or have a national location network. By weighing data like customer lifetime value, proximity to product, shipping cost, labor cost, or product velocity, NOM can automatically decide whether to ship the inventory you need from another store, a central kitchen, or potentially from some other participant on the network. Scallops 86-ed at your downtown location with National Seafood Bisque Day on the horizon? Replenish your crustacean catalogue with inventory you already have on route to another, lower-demand location, or find, buy, and ship surplus at the top of the supply chain on the fly, even if it is from another restaurant group.

Promote: Keep your customers informed every step of the way

When you achieve consistency in pricing, promotions, and delivery times, your customers will notice, and they will keep coming back. Networked DOMs real-time visibility across the supply chain will give you and your customers total transparency about where orders are every step of the way. Lunch order ready for pickup? Next-gen NOM will automatically send your customer a notification that their soup’s ready to go, follow up with them for a review of your restaurant, and keep them informed of sales and promotions based on their unique preferences.

The food and beverage industry’s increasing emphasis on omni-channel systems is creating a massive challenge to balance high customer expectations with a highly efficient supply chain. With a single view of inventory across every touch point of the retail supply chain, Networked Order Management can empower food service enterprises to intelligently manage the entire lifecycle of omni-channel orders, quickly identify available-to-promise inventory, and determine the optimal fulfillment path to balance customer delivery requirements and order profitability.

Erick Rowe is the VP Industry Strategy at Infor Retail.