• Matt Harlos

Should we standardize orders from vendors?

Updated: Jun 7, 2019

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Across the food services industry, every operator has to deal with one constant: ordering product from a supplier or vendor. We know that a single operator can work with dozens of different suppliers for their snacks, drinks, coffee, and everything else they need to run an efficient and profitable business.

The process of ordering product varies tremendously from one supplier to the next, however. Some require a simple email with product types and quantities needed, while others accept phone calls or even faxes. Others require users to fill out lengthy online forms in a product database to get what they need.

After experiencing all of this first-hand working with our customers, we started to wonder if there should be standardization in the way operators order from vendors and suppliers. And if this is something that would benefit the operator, then why hasn’t it been done?

Should there be standardization?

First, what’s the cost to the operator of having no standardization? Is it simply time and no small amount of frustration, or is there a monetary cost as well? Is the system broken, or does it simply need to be improved?

When we talk with businesses in the industry today, many of them have one or more individuals dedicated to managing product ordering from their myriad of vendors. Their goal is of course to get the right product to the right place at the right time, and to make sure that the warehouse stocks out as little as possible.

In most cases, ordering is a reactive process. As soon as a product is noticed to be low (usually found out by literally seeing the diminishing amounts of it on warehouse shelves), an order is placed. What if this process was more proactive?

The only way they can get that most perfect count is the most time-consuming way.”

Evan Jarecki, Chief Customer Officer

How would an operation know when they’re running low on something without seeing it? Digital tracking is a great first step. If every single product that comes into the warehouse is logged in type and quantity, and is logged again when it leaves to a point of sale, then inventory levels should always be known. Right?

Not quite. In the world of convenience services, bringing product to a point of sales is very predictive. There are some great technology options out there (like Lightspeed) that allow operators to have a better idea of what they need to stock at each point of sales. But it’s not always perfect. Sometimes, when a truck leaves the warehouse with fifty bags of chips, a few of those bags make their way back at the end of the day. Logging a pallet of chips with a known quantity is easy, but tracking five extra bags that return after a day out? A little more difficult.

The first major step towards greater efficiency is automated ordering.”

Cecil Ledesma, VP Strategic Partnerships

So, any modern inventory and ordering system would need to account for variances in product down to the individual item level. The only feasible way to do this is through automation. Let’s say those bags of chips make their way back home, but they aren’t properly logged. Should the system track a few floating bags of chips, or is it safe for them to be ignored in the re-ordering process? Is it better to have a slightly inflated inventory, or one that is lower than expected?

With automation comes risks.

Dealing with this challenge is something that each operator will have to handle, setting accepted tolerances for product levels to handle automatic reordering.

In this new system, operators would still need to eliminate the frustration brought about by a dozen suppliers with a dozen ways to order. Any modern ordering system would have to be comfortable, convenient, and extremely easy to use. It would need to eliminate the bottlenecks that hinder the current process, like unnecessary paperwork.

What are some of those bottlenecks that keep operators from getting what they need when they need it?

When your operation orders new product, where does it happen? Is it anchored to a desk because the only way to order is through a desktop web portal? Or is it in the warehouse while looking at depleted stock and using a phone or tablet?

Which way works better?

Sometimes you can simply make a call to your vendor from within the warehouse to place your order. But when you’re working with larger operations like Vistar or Sodexo, there’s a more in-depth ordering process that a quick call or email won’t cut. For those larger organizations, your ordering specialist may be tied to their desk, typing away until the order is finally complete.

There’s nothing tracking this for them in the background.”

Evan Jarecki, Chief Customer Officer

A hybrid mobile & desktop system that allows automated reorders for product unless an operator changes their mind on quantity/timing would immediately eliminate some of the time burned on manually making the same order every time it’s needed.

Let’s look at another issue that plagues operations: variance.

How does an operator deal with variances throughout the year like seasonal variances in consumer desires, or in physical availability of consumers, like when schools are out for summer?

Right now, the onus of handling this is on the operator, but how can the supplier help operators with this task of managing variances throughout the year when those variances are consistent? These variances are often predictable, but can still put a strain on the ordering process throughout the year.

From the bottom up.

Furthest from the supplier, but possibly just as intimate with inventory levels, is the route driver. This is the individual who sees the product at its final destination more than anyone else in an operation. Attentive drivers are aware of what sells and what doesn’t, and can often provide insight into how to boost sales at their accounts.

So why not let the driver prompt product orders? It may be a radical step, but a driver in the field being able to push a notification directly to the ordering specialist may help to eliminate the middle-man approach that often happens today. Standard process looks more like the driver tells the warehouse supervisor, the supervisor tells the ordering specialist, and they tell the supplier. Why can’t the driver push notifications of low product directly to the ordering specialist, or, if the operator wants something even more streamlined, directly to the supplier?

This approach lets all parties be fully aware when things are needed. The first goal is making sure that the entire operation’s team is aware of what is needed. The next step is to make sure that suppliers get that same information so they’re prepared for an order.

Standardization leads to better communication to ensure that an operator is always stocked with the product they need. What steps can be eliminated by consolidating the steps to know about product shortages?

The bottom line is that having standards means that the operator wins.

When the operator wins, they can order what they need and the consumer gets what they want.”

Cecil Ledesma, VP Strategic Partnerships

These ideas are of course simplified, but that doesn’t mean it can’t be done.

How long to standardize?

The big question is: let’s say that there’s a path to getting all suppliers and vendors on the same page for integrations. If it were possible, how long would that take? Is this a 10 year project? The technology to make it happen is there, but what would go into making a single database or marketplace for multiple suppliers to serve multiple operators.

They put up with it because there’s no better way.”

Cecil Ledesma, VP Strategic Partnerships

It’s an ugly topic to discuss because there are so many possibilities with vendors that there’s no easy way to fix it. Could a third party be brought in to act as middle ground? One platform that suppliers sell on and that operators buy from, that is managed by neither side. Eliminate the faxing, calling, and emailing. Something faster, simpler, and more accurate.

A platform that allows for preemptive prompts for operators to order as things are estimated to get low. A single location to send in orders and for suppliers to collect orders from. There is opportunity for technology to handle all the orders between the dozens of suppliers an operator may deal with.

If you have all those suppliers on one platform for one operator, you’ve solved it for all operators.”

Evan Jarecki, Chief Customer Officer

What are your thoughts? What would be an ideal solution for you and your operation? How have you handled this situation in your business?

As a supplier, what would you like to see in terms of a simplified marketplace for your customers to purchase product?

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