Don’t Let Food Cost Eat Up Bottom Line Profits

Even after data has been captured in an electronic format, as long as trading partners are referencing their own codes and nomenclature, the data is meaningless. While some systems facilitate the ability for operators to map their own data in technology tools, this is an incredibly time intensive and error-prone process. Best of breed systems provide for the automatic translation of key data elements such as product and location codes, removing this burden from the operator.

Aggregation of Key Data Elements

While electronically collecting and automatically translating data are steps in the right direction, that data is still potentially incomplete or untimely, hampering effective decision making. In addition, an individual data point often needs to be “assembled” with other data points in order to create an actionable piece of information. For example, it may be necessary to combine a reading from a temperature sensor, with a complaint from a franchisee, with an audit result of a particular supplier in order to determine whether a wilted case of lettuce represents a random incidence or a systemic problem. Best of breed systems allow users to easily link key data elements and identify trends across organizational silos.

Exception Based Management

Even if data has been collected, translated and assembled in a timely, complete manner, there is still a significant hurdle to using this data to make an informed decision. Time or resource strapped foodservice professionals struggle if forced to pour through voluminous reports or perform ad-hoc analysis in order to extract the information they need to make an informed decision. Best of breed systems allow users to “manage by exception,” leveraging dashboards, thresholds, alerts, and workflows to identify which issues are material and require action to be taken.

Best of breed solutions also provide the ability for operators to leverage their capabilities via a hosted or “on-demand” model. While some operators have large technology departments and prefer to manage software in-house, many are severely resource constrained when it comes to IT resources. On-demand solutions – in which the vendor hosts the technology and manages all aspects of the software implementation, upgrade, and maintenance, while providing the operator access to the system via a web browser – significantly reduce the total cost of ownership for software and allow operators with few IT resources to take advantage of the same best of breed systems used by their larger brethren.

Take, for example, spend management. Food service companies can ensure they are capturing the full value of their contracts, easily monitoring and enforcing unit compliance with order guides while identifying contract price variances, purchases eligible for rebate, opportunities for SKU rationalization, and other cost savings. There are IT platforms that automatically receive, standardize, translate and analyze product and price information reported by distributors, making the information available in intuitive applications that leverage task-based workflows, dashboards, thresholds, and alerts to ensure managers are focusing on key business issues. Such platforms can be used stand-alone or in conjunction with an integrated suite of solutions that includes procurement, promotion management, quality and compliance management, product information management, business intelligence and trade spend management.

So what’s easier? Growing sales by millions of dollars or making a small investment in technology that can drive the same bottom line impact? Advances in technology, taken in conjunction with the introduction of on-demand or hosted solutions that don’t require extensive IT resources to employ, are giving foodservice operators access to the tools and information they need to significantly improve the means by which they manage their businesses. Those who avail themselves of these tools will not only reduce costs and improve operations but also enjoy a significant competitive advantage. Those who don’t will find themselves running just to keep up.