Hospitality omnichannel revolution requires supply chain improvements

Omnichannel. It’s a term that we use a lot these days. And though it’s a more mature concept in retail, it’s becoming much more relevant in Hospitality.

At its heart, omnichannel is about the true continuity of the customer or guest experience. Physical, mobile, social. Not just a multichannel of routes to interact, book or purchase, but a fluid, unified experience that ensures brand understanding, satisfaction, happiness and loyalty. For some, maybe even advocacy!

The changing face of Foodservice and Hospitality

Suffice to say that we’re living in the midst of a constant technological revolution. Artificial Intelligence, machine learning, smart data mining, the menu-connected supply chain etc. But don’t let technology companies eat your lunch. Use them in the omnichannel experience where applicable by all means, but continue to own your relationship with the customer or guest wherever possible and retain your hard-earned and vital margin. Amazon, Uber, Airbnb, Just Eat, Deliveroo started as strong technology-led companies, spreading quickly — through use of innovative technology and customer ownership — into wider and perhaps even competing services. Consider grocery, bookselling, music, wine, hotels as some examples of this.

Consumption of food and drink is not optional. But over the centuries it has evolved to much more than something we simply do to survive, it’s now integral in the social and emotional “wellness” of the population. We now place emphasis on the experience of eating; we look for a significant amount of enhancements to this experience — whether food related… where the food is sourced, what it’s made of, how it’s presented — or how distinct and immersive the experience may be.

Supply chain improvements needed and how to get them

As ever in Hospitality, we thrive on change and meeting new challenges. Availability of produce, changing tastes, food and technology innovation, travel, population changes and financial strength or constraints also occupy our thoughts.

It’s clear that businesses must adapt very quickly to the seismic shift that is happening in the industry. Many businesses are grappling with the first and second phase of this, many (too many) are still discussing what may be coming. What doesn’t change is the customer or guest wanting satisfaction and in most situations, an experience.

With so many “customer-facing” innovations and changes, it’s not surprising that investment levels have risen sharply to meet them. In a top ten of what a business could or should invest in, customer-facing or legislative requirements would naturally occupy the top slots. It’s also natural that speed is of the essence, not always but mostly so some may be achieved by using third-party aggregators, outsourcing or at a high initial cost.

Then comes the time for the adjustment, change the mix to regain (or retain) customer ownership, increase retained margin, decrease the cost of doing business.

These things can all be achieved by investment in technology. For supply chain, this is vital to achieving all the top goals of the business – guest experience and satisfaction, brand recognition and loyalty, employee retention and engagement and reducing cost threats on the business. It is surprising how often adjustment and improvement and efficiency of the supply chain is neglected in the initial investments. The points below deal with supply chain improvements that need to be delivered to meet the omnichannel objectives.

Supply chain specifics

Master data and menu/recipe control

If omnichannel is about continuity of experience across all channels then ingredient and product data must be at the heart of that. In how many places do you hold data on ingredients, products, and suppliers? Does it aid continuity or is it siloed and with differing information? Review your current solution against what else has entered the market and what is designed with omnichannel in mind. With product inflation having returned and on the increase, this really should be a priority.

Mobile solutions

Mobile has grown to be a huge part of our personal lives. As digital infiltrates all types of business, mobile must be introduced wherever possible to speed up manual tasks. As an example, a Foodservice business enters the business or event delivery market “channel” to create an additional revenue stream. Processing of the morning delivery to store or restaurant must now be quicker! Identifying shortages or damages related to promises for order fulfillment that day as quickly as possible is critical as product shortages could mean loss of sale, or that the customer orders an alternative. For a special event, it’s a relationship breaker, brand damaging and certainly not a continuity of experience with what came before.

Production

Re-evaluate the benefits of running a production report. This is valuable when a product is produced on-site or centrally for delivery to a customer or your own sites, but now critically, shows commitments made versus availability. For instance, if you have order cut off times that then require preparing dishes, fulfillment from inventory or order from supplier and fulfil, then use production to keep control and visibility on these “promises.”

Inventory and procurement

As ever, this should be as automated as possible, with as much of an aid to any desired management knowledge as possible and increasingly, being more consistent and accurate than management intervention ever could be. It should be an integrated supply chain – predicted demand, actual demand, inventory levels, financial budgets, lead times, supplier collaboration and integration. Having demand come from many channels could lead to overstocking or shortages due to lack of planning. Running an inventory and procurement process that mainly uses historical usage as the guide to future orders isn’t enough, as the different routes to the customer place differing demands, affected by different conditions.

The industry has done much to create happy customers, but my point here is that this is about a review of supply chain against the new opportunities and the higher-than-usual challenges from cost increases in labor, legislation, premises and products and margin reduction due to use of third parties.

Analytics and Reporting

Check that you are reporting on key performance indicators (KPIs) for the new situations. Many KPIs remain unchanged and need to be checked. Above all for supply chain, inventory investment, at the right place, right time and right level needs to be ensured. Measure efficiency of predicting demand, meeting that demand and at optimum inventory investment. Reduce wastage, shortages, increase reaction time to inflation and improve information to the customer for traceability, provenance, quality, allergens and health.

Prepare for the digital world

Implement a best-of-breed platform, but one that allows entry point at module level. Prioritize by area of need, ensure an approach that allows integration to other solutions. It’s important to automate wherever possible, increasing costs can only be met by increasing revenues or increases in efficiency. Get both.

Find out about how you can address these challenges by learning and inquiring about Symphony RetailAI Supply Chain solutions.

Read my previous blogs in this series:

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