Data the key ingredient for restaurant chain success
How to use data analytics to improve outcomes of project
March 20, 2017
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March 21, 2017Data the key ingredient for restaurant chain success
Businesses have more data than ever about their operations, supply chains and customers. The problem is often they can’t see it, don’t know where it is, and don’t have an easy way to pull it all together and analyze it. So, they are unable to make smart decisions and can lose thousands of dollars a year.
It’s a challenge restaurant franchisers such as CraftWorks Restaurants and Breweries Inc. face. CraftWorks has found a solution, though—OnDemand software from ArrowStream.
OnDemand does the “dirty work” of collecting data from food distributors, cleaning the data, analyzing it and putting the information front and center for supply chain restaurant managers, said Jeff Dorr, chief customer officer of ArrowStream.
“OnDemand provides near real-time processing and analysis,” he said. “Without a system, you are spot checking. Humans can’t get through the data quickly. We’re providing predictive and actionable insight—a full supply chain view of the data.”
The software is provided as a service, with the data stored in two off-site data centers. Using a dashboard, companies can monitor distributors’ inventory, food prices and purchasing compliance. They can track price discrepancies—if the price charged is the price agreed upon—automate the examination of contract price updates, and streamline communication between restaurant companies and their suppliers. Companies can also set up triggers—for low inventory, for example—so they are alerted and can contact the distributor.
OnDemand watches 100 percent of a company’s spend and alerts managers of “opportunities to increase contracted spend and reduce instances of off-contract purchasing,” Dorr said.
“OnDemand ties all data indicators together so corporations can focus on the right vendors and providers. We’re getting the information for them so they don’t have to go looking for it manually,” he said.
OnDemand helps CraftWorks reduces food costs
CraftWorks, which operates 10 brands in 177 locations, wanted more visibility into its diverse supply chain of 25 distribution centers, 49 local produce distribution centers, six small wares distribution centers, and nine redistribution centers.
Tracking and managing the supply chain for its restaurants, which include Gordon Biersch Brewery Restaurants, Rock Bottom Restaurants & Breweries, and Old Chicago Pizza & Taproom, is a challenge.
CraftWorks used to have spreadsheets and programs, but it would take a long time to analyze the information and find differences, said Scott Adams, vice president of strategic supply and initiatives at CraftWorks.
Plus, managers couldn’t see everything, causing them to scramble to resolve low-inventory problems or to lose money because of price changes.
The company chose OnDemand primarily because of the software’s contract management feature, Adams said.
“With it, we can make sure distributors charge the right cost, that distributors adhere to the specifications outlined in their contracts, and that our restaurants are buying to contract,” he said.
CraftWorks can now do post-contract audits and keep track of non-contract spending. The post-audit tells them how much restaurants are purchasing compared with what the contracts say, as well as if the prices change. For example, the price for fry oil and ketchup fell off, and they discovered within 10 days that it happened.
The company can also see if orders for its larger brands are on spec—that the specified products and ingredients received match the contracts. Smaller brands can order things off spec, and the software monitors those purchases, too.
“We can see what’s happening to get things corrected and back to contract,” Adams said. “The visibility is tremendous. We had it before, but it was in spreadsheets and PDFs and spread out all over the place. Now everything is together in one place, and we can take control of distribution.”
OnDemand also lets managers look into each distribution center for pricing, and if it sees a lower price, it alerts them—tells them they might want to buy from that center than the one they currently buy from.
“We’re having conversations with distribution centers that we couldn’t have before. It used to be what I call strategic stumbling—we would just happen upon things,” Adams said.
OnDemand monitors distributors’ inventory
CraftWorks also finds the inventory module hugely beneficial. Now the company can be proactive about managing inventory.
“Usually I was behind the eight ball [with inventory]. A restaurant would call when they were out of something, and we’d scramble to find a solution,” Adams said. “Now we can see what is at risk of running out and be two to three days ahead of it. Inventory management is now seamless for restaurants.”
The biggest benefit, though: OnDemand saves CraftWorks money. Adams expects the software will save CraftWorks .5 percent on food costs.
“We will be able to correct a lot of substitutions, which increase costs, and we will see savings,” he said.
This story, “Data the key ingredient for restaurant chain success” was originally published by Network World.