Digitizing restaurant supply chain operations

Creating more agile, efficient, and resilient foundations

Deloitte’s Future of the Consumer Industry program has identified the implications of a transformed consumer industry, including a seismic shift in supply chain operations and logistics over the next decade. Going forward, organizations may no longer have just a linear flow of goods but a series of interconnected components that create sourcing, production, and delivery networks. And this is especially true for the restaurant industry.

Restaurants that prioritize supply chain digitization today may be better able to withstand inevitable supply market shocks in the future. Leading organizations have already started moving toward the ultimate goal of “self-driving” supply chains. In this report, we explore the shifting restaurant supply chain and operations landscape and highlight opportunities businesses can capitalize on now.

For additional industry insights and trends, check out our companion report on the future of restaurants.

Shifting to a ‘self-driving’ supply chain

To avoid being left behind, restaurants should start building their foundational capabilities today. We envision companies’ digital maturity to progress through three stages: illuminate, optimize, and orchestrate. Organizations often begin by investing in the ability to aggregate and present data to help make business decisions, thereby illuminating the value chain. Many restaurants use a franchise and supply chain outsourcing model, which means they may not own or be able to easily access the data they need. This outside party involvement can make the initial step more complicated, but we’ve typically seen positive returns for companies that invest in data visibility.

Once data is available in a usable format, organizations can continuously monitor performance and optimize the value chain, from supplier selection to building placement. Over time, we predict businesses will be able to transition from a human-driven operation to a “self-driving” restaurant supply chain that operates autonomously to identify and act on opportunities.

The benefits of digitization

What follows are some of the specific ways we expect leading organizations will use restaurant automation and digitization to enhance their operations.

Synchronized planning: For more effective digital supply chain planning, restaurants can move away from reliance on historic data toward dynamic planning that draws from third-party data to predict demand. They could also leverage cloud-based artificial intelligence (AI) digital twins to help drive decision-making on a range of topics, like how their spaces are designed to maximize efficiency and customer experience, all with limited capital investment.

Dynamic fulfillment: Restaurants can keep close tabs on their goods in transit thanks to increasingly sophisticated radio frequency identification (RFID) and Internet of Things (IoT) tracking technologies. And real-time route optimization allows organizations to establish visibility into demand and routing data for logistics purposes and provides the capability to dynamically update routes for higher efficiency.

Digital product development: Restaurants can use analytics to plan and implement smart limited-time offers (LTOs) on menu items, which take advantage of supply and demand shifts identified by internal and third-party data sources. Improved demand analyses can identify customer preference trends and indicate opportunities to use LTOs, as well as the specific geographic regions where they may be most effective.

Intelligent supply: Through supply network visibility and sensing, restaurants can track information about their suppliers—and their suppliers’ suppliers. With many organizations exploring delivery model shifts, increased visibility into cost analysis can be key to understanding whether the margin, throughput, allocation, and overhead of an organizational change is advantageous. And as IoT technology becomes more affordable, restaurants are digitizing their value chains to predict inventory shortages and monitor shelf life, cold chain compliance, and other food safety concerns that require near real-time visibility.

Smart operations: Restaurants that can track information on their in-house hardware and online systems gain real-time health monitoring and operational insights. This allows them to proactively address issues and identify systemic trends in areas that affect their customers’ experiences.

Connected consumer: With increased use of drive-thrus and delivery, restaurants are rethinking their in-restaurant operations automation. To focus more on customer-facing interactions, they may reconsider kitchen layout, flow, and drive-thru practices. Robotics and automation technologies can also help save labor, drive overall efficiency, and allow staff to focus more on customer-facing, value-added roles.