SUPPLY CHAIN
A trading landscape like no other Changes to buying behaviour, being experienced in many areas right now, but particularly in hospitality, can seriously impact a catering operation’s chances of survival when faced with supply chain challenges as well, warn food procurement and supply chain management company, allmanhall, who have some advice to offer. GOING AGAINST GROWTH With the food supply chain facing unprecedented challenges such as delays in delivery and availability of ingredients, as well as energy and staffing issues, suppliers have had to change the way they operate, in some cases actively looking to downsize - an unthinkable strategy in normal times, in a sector where scale is often key to survival, acknowledge allmanhall. Oliver Hall, the firm’s MD, has identified the key factors driving these changes, as well as what actions he feels catering operations can take to mitigate the impacts on their own businesses. “In the 15 years since founding allmanhall, liaising with both suppliers and clients on a daily basis, I have never seen a landscape like the one we are currently facing,” says Oliver Hall. “In fact, it is fair to say that the current pressures on the supply chain in the food sector are unprecedented in a working lifetime. Times have changed in the food and beverage sector. The relationship dynamic between the client and the supplier that we have been used to for years is currently undergoing a significant remoulding. “The turmoil facing suppliers has forced many to do an about-turn on the normal mantra of expansion and growth. Some are not only having to actively decline new customers, but also in some cases trying to reduce their existing customer base. They are
being forced to go against one of the universal ambitions of businesses in any sector, growth.” LABOUR SHORTAGES The significant reason for this is the current labour shortages across the whole UK. As well as around a 100,000 deficit in HGV drivers, it is estimated that the food and hospitality sector (including production and the supply chain) is devoid of over 500,000 employees, allmanhall point out. This ranges from produce pickers and butchers to chefs and waiters, and everything in-between. The result is that each step of the supply chain is impacted by labour shortages, which in turn translates to food product shortages, and that’s without even mentioning fertiliser, CO2, fuel availability or gas prices yet! The effects of the driver shortage have already had an impact not only on service levels, but also the availability of product that foodservice suppliers receive from processors and manufacturers. “At allmanhall, we are aware that the current in-bound delivery levels to foodservice suppliers is ranging between 70-80%, where they normally sit at 98-100%. This therefore means that up to 30% of stock is not even making it to the wholesalers for delivery out to customers,” reports Oliver Hall. “This is having a knock-on effect upon all catering and foodservice
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operations. But buying behaviour changes can help ensure a catering operation remains a valued customer of foodservice suppliers, at a time when they are looking to reduce in size. “It is essential to remain, or become, an attractive business customer. Suppliers need customers with buying behaviours that will enable them to operate as efficiently as possible, therefore reducing the costs and time associated with making deliveries. This is known as the ‘cost to serve’, and by reducing the cost to serve, a business becomes a more attractive customer to suppliers.”
POSSIBLE SOLUTIONS 1. Increase average delivery value – where possible consolidate and have higher value orders. 2. Reduce average delivery frequency – minimise the number of deliveries received each week. 3. Increase the delivery timeframes in which suppliers can make deliveries. 4. Order full cases and reduce splits – where possible, order full cases, as splits increase the picking time and cost of the order to the supplier.
