Fools Gold For The Frozen Food Industry: Why Procurement Initiatives Aren't Suitable When Choosing A Logistics Partner
There is a growing trend from food sector companies in choosing a logistics partner, which involves suppliers being asked to provide prices and information on services via simplistic online spreadsheets. Recently, ACS&T Logistics MD, Malcolm Johnstone, has called this method of choosing logistics providers into question, arguing that it can often lead to an unsuitable and costly service for companies. He explains the benefits of selecting a logistics supplier based on its services, working practices and additional services:
"The rise in procurement initiatives by frozen food companies has been driven by businesses attempting to cut costs. Whereas once, managers who had experience in the workings of logistics programmes were involved in choosing suppliers and services, now, the process is often made by a procurement department. Matching the rise of these procurement initiatives has been the growth of online platforms designed to help with the tendering process.
Every company wants to reduce the cost of their supply chain, and this has never been more important than in the current economic climate. However, procurement specialists, with no hands-on experience in logistics, often make the mistake of assuming that they can get the most cost-effective supplier by providing a simple set of requirements and asking for prices. In reality, logistics requirements vary tremendously from business to business, and whilst the process might generate cheap headline rates, these can be very expensive once the practical requirements of a business are taken into account!
Procurement initiatives are seen by logistics suppliers as an attempt to reduce complex service offerings down to point of how cheap you can go. However, these tendering processes do not include enough specialist information on the many variables involved in a logistics programme, such as product storage temperatures, blast freezing and tempering requirements, which result in a price which has no correlation on reality. Any price given by a provider on these online spreadsheets will be guesswork, with the likely outcome being that both customer and supplier feel let down when the logistics service begins.
Why does the use of online spreadsheets and procurement initiatives produce such poor results? It is easy to see that the whole process is unsuitable, as often, those who make the decision have no hands-on involvement with the logistics programme itself. Procurement teams are trained to reduce costs, but without proper knowledge of the complexity involved, they may not understand the benefits of value-added services or customer service against the prize of a cheaper rate. For logistics and operation managers on the front line, a supplier chosen by procurement initiative can leave them with a huge amount of work, as they rebuild the service quality and repair relationships with dissatisfied customers. By this time, procurement teams will be working on their next project, in the belief that they have improved the cost-effectiveness of the supply chain.
ACS&T can offer a solution to this problem. With an adaptive, stable and individually tailored service, ACS&T foster value-added relationships with all its clients, adapting to changing trading conditions and short term demands. Whereas a storage rate that is a few pence cheaper may seem like an attractive prospect, in the long term, this is false economy. The ACS&T customer saves thousands of pounds through the assured, consolidated supply of ingredients to the production line and the use of an industry leading, real time stock management system, which enables them to reduce operational failures and minimise stock holdings.
Over the next year, frozen food businesses face a difficult time in the selection of logistics partners. Many providers have been badly affected by the recession, and face the costly prospect of replacing R22 refrigeration units in the near future. With fuel and power costs set to rise, procurement prices can only be sustained as long as suppliers stay in business. Perhaps procurement initiatives should start incorporating the cost of recovering goods from administrators!
The newest revelation in the food service and hospitality industries are digital menus. These menus are powered by thin tablet computers and enable the display of an interactive and digitized menu variant. The following points will serve to highlight how such innovative approaches to dining truly revolutionize the experience for patrons.
Static Menus Are Boring
Paper menus have no flare. They use static text descriptions to entice patrons. With a digital menu app, however, now your menus come to life. Previously boring paper menus are gone, and are replaced with high resolution and interactive digital versions. Now patrons can explore an exciting menu that is technologically advanced and far more enticing.
According to numerous recent studies, pictures of food actually sell more food because they make patrons hungry. Imagine this power translated over to the digital menu app. With high definition pictures of food, customers see what they want to eat before they order it. This method has been shown to exponentially increase sales.
There are some other desirable amenities that such profound apps have to offer. For starters, they are more attractive than paper. Digital menus also can feature functions such as a request wait staff button for table service, instant digital food and drink ordering functions and even a payment at table or request bill functions.
Easy to Use Interface
The interface for the digital menu app is designed to be user friendly. Everything does what it says. Customers slide or tap their fingers across the touch screen to access various parts of the menu, view menu items and so forth. Everything is clearly labeled, easy and fun to use for customers.
Word of Mouth
Word of mouth is the best form of advertising that money is simply unable to procure. The more methods that a business has of spreading word of mouth advertising, the more patrons that they can hope to attract. With a digital menu app, it's easy to enjoy free, viral advertising such as this. When people become excited about a new experience, they want to tell everyone they know. Imagine who they would tell about your fancy new digital menus?
Social Media Sharing
Don't forget about social media sharing. The average Facebook user has more than 100 friends. So this can put into perspective the power of sharing features that can be imbedded in these software applications. When customers are able to share their dining experience by pressing a button on the menu, imagine how many people are suddenly informed about a restaurant. What would that do for word of mouth and social media advertising?
One final note on how a digital menu app can help you drive more business is that it presents an invaluable means of gathering pivotal customer feedback about their engagement. This is feedback that customers can submit via the "feedback" feature on the tablets and in the software. Such priceless customer response allows restaurants to make pivotal changes before they lose their customers for good. Many guests will be inclined to use this digital method to apprise you of their satisfaction levels, easily making it a very desirable feature of digitized dining.
Starting a restaurant is not just an exciting and rewarding experience, but also a time consuming and demanding task. Opening a restaurant involves having a unique vision and working within your financial means.
The following is a list of helpful tips on how to start a restaurant:
Create a Unique Restaurant Concept: The restaurant business is highly competitive so make sure your restaurant is different from the other restaurants in the area. For instance, it may not be a good idea to open a Chinese restaurant in an area that is populated by other Chinese restaurants. It is important to do your research about what type of people frequent the area. For instance, a family orientated area may not be a good area for a high price restaurant.
Enlist Consultants: Get some feedback from other restaurant owners. They will be able to offer advice and have support contacts. Professional consultants will help with any management and financial issues that may arise. Hire an architect to design the layout of your restaurant. Have a fairly accurate idea of how you want the restaurant to appear and operate. Hire a licensed contractor to do the remodeling and renovation.
Business Plan: It is important to have a professional business plan that is detailed and shows how you will become profitable. You can enlist the services of a small business assistance organization. They will help you with budgeting and how to acquire funding.
You have to consider such as expenses as: insurance, equipment, lease payments, utilities, payroll, permits, renovation, supplies-etc.
Type of Restaurant: Consider such restaurant features as the size, number of seating, size of kitchen, bathrooms-etc. You also have to consider whether you will offer counter service or even a drive-thru service. Remember you will have to secure zoning permits, health permits, and other building permits before you open. Health regulations and requirements are determined by provincial governments, municipalities and regional health authorities. You will also have to submit a number of forms for approval from various governmental agencies. An established restaurant zoned area will significantly reduce time and stress.
Assess Restaurant Features: Before you purchase or lease the restaurant, do a walk- through with a building inspector to asses such features as wiring, plumbing, and whether the restaurant meets disability access guidelines. You should find out what renovations and upgrades will be needed. This should be included in your budget. Restaurants need to have a good roadside view and an abundance of parking space.
Alcohol Beverages: Determine if you will serve any alcohol and what type such as wine, hard liquor, and beer. You will have to secure a liquor license.
Menu: Design and create a menu that customers will love. This will encourage repeat customers.
Starting a restaurant is a rewarding experience when you have a plan. Having a step-by-step plan will make the experience much easier. Remember, your restaurant will have a greater chance of success if you love the concept and are happy with all of your decisions.