After nearly two years of global efforts to contain the spread of Covid-19, the transition into an endemic future is imminent. In Singapore, we have seen recurring waves of restrictions that seek to control the current situation; but there is much to be discussed as to how we—specifically the F&B industry—can continue to thrive in an endemic future.
For an industry that has historically been slow to digitalize, we’ve done well in catching up over the last year, embracing digitalisation and innovation for ordering, selling and delivering our food despite restrictions. We’ve also banded together on government and community initiatives like #savefnbsg – a coalition of more than 500 restaurant groups dedicated to supporting one another.
However, with an endemic future in sight, F&B operators also need to find ways to reduce operational costs and increase efficiency for the long-term. Through our daily interactions with customers in the industry, we found that the three key challenges they faced most often were cost control, order management, and paper trails. Here’s our take on how they can be addressed with simple, technology-based solutions.
Controlling Costs with Approval Workflows
One of the most important aspects of running a successful business is striking the perfect balance between delegation and control. It is crucial for business owners to have trust in their employees to do their job while they focus on scaling the business. For F&B in particular, owners are usually extremely careful when it comes to shelling out money for supply orders, mainly to avoid risk of wastage because of overordering, or missing out on sales because of insufficient stock.
In the past, ordering stock supply was often a tedious manual process, involving multiple email threads and spreadsheets. But today, technology has allowed for F&B operators to manage cost control more efficiently by means of a simple approval workflow in ordering systems. On the OrderEZ platform for example, owners can empower their staff by creating dollar thresholds for them to place orders on their behalf. Staff can also easily track past orders to determine an average amount to order, based on the number of sales they have made. Most importantly, owners receive notifications on ordering activities and always have an overview of them, should there be any orders exceeding the set limits.
Managing Orders with Feedback Loops
Managing orders is anything but easy, particularly in the F&B industry where owners usually order a wide range of ingredients from faceless suppliers through emails or WhatsApp. Without a proper feedback system in place, owners often rely on faith that their supplier has received the order and the goods will appear the next day.
The solution to this is as simple as having an ordering technology that provides feedback loops. With OrderEZ for example, what we’ve done is to ensure that owners not only receive confirmation from their suppliers, but that they’re also able to easily verify the goods ordered, delivered and invoiced in real time. This feedback loop has been well received, with our customers saying they see a 20% increase in productivity through centralised ordering and consolidation. In fact, most F&B operators are now following this as an industry standard.
Eradicating the Paper Trail
For many business owners, paperwork is an exhaustive process that is often coupled with archaic processes like stamping and signing invoices before manually scanning them onto an accounting system. As a result, owners are often kept in the dark about their expenses and profits in real time — a major disadvantage when it comes to planning ahead.
Being able to forecast and identify areas that need change are key ingredients to thriving in an endemic world. This is especially the case in a volatile industry like F&B, where owners often have tight cash flows that are tied to commitments such as supplies, wages, rent, utilities and taxes. Strategic technology integrations can make a significant difference in speeding up processes while improving their efficiency and accuracy. Our Xero accounting integration, for example, automatically creates a record for each transaction that then tracks the delivery of the goods for both parties, delivering both real time and cumulative insights. Not only does this save time, but trees too!
How are Suppliers and Producers doing?
While much focus has been placed on the fate of restaurants in the last year, less has been said about F&B suppliers and producers. The neverending rollercoaster of restrictions that impact restaurants also impacts these vital but often overlooked stakeholders who suffer from the same revenue swings as their customers.
The upstream impact of struggling restaurants manifests itself in supplier’s accounts receivable growing and becoming more uncertain. Most suppliers extend 30 day credit terms to their buying customers and as the market becomes less predictable so does the likelihood of repayment. The impact of this could have long lasting effects as finance teams take harder stands on whether or not to extend credit, how much credit to extend, as well as leading more suppliers to request cash on delivery especially from new accounts.
Suppliers and producers are also dealing with the increasingly unpredictable international freight markets. Prices have skyrocketed over the past 12 months as well becoming harder than ever to accurately forecast. What used to take 3 weeks and cost $1,500 could now take 8-10 weeks and cost $9,000. In the short term suppliers and producers may not have had this built into their price, therefore eroding their profit margin, but they will course correct and that will lead to high prices for the everyone
Technology aside, the future of F&B will always rely on the patronage of its customers. If you’re a supporter of the F&B industry, this is your reminder to pay a visit to your favourite restaurant or order-in, if you have the means to. If you’re a business owner, this is your reminder that a little bit can go a long way if you choose the right solution for your business.
If you’re interested in learning more about how these solutions can be tailored to your business, drop us a note at hey@OrderEZ.co