How SaaS supply management solutions help cut food costs


For most foodservice operations, one of the hallmarks of the business is razor thin profit margins. Most businesses in this space barely do better than break even. There are two ways to remedy this: Cut your costs or raise your prices.

For many restaurants and other foodservice vendors, the latter is the "panic button" - the last resort that can eventually end up driving customers away. That leaves one option: Finding a way to lower key expenses to widen the profit margins.

One of the major expenses any restaurant faces is food costs, but you may be hesitant to look here when cutting back since opting for cheaper ingredients could greatly reduce the quality of your offerings. But there are ways to ease the burden of your food costs without buying lesser-quality ingredients. Smarter inventory management - facilitated by a SaaS supply management solution - could very well be the key to reducing your food costs without sacrificing quality. Here are three ways how:

Accurate ordering and inventory management is crucial for vendors handling fresh product.Accurate ordering and inventory management is crucial for vendors handling fresh product.

Better waste management
One of the main contributors to high food costs is poor waste management. Now, waste is inevitable in any foodservice operation, but with smart supply management, you can keep that waste to a minimum.

The key is in pinpoint accurate order forecasting. Outdated supply management software, or even spreadsheets, makes it difficult to accurately project exactly how much product you'll need during a given shift. This can lead to over-ordering, which means food and ingredients end up spoiling on the shelf. A SaaS solution automates the sales forecasting process and ties it into the ordering functions to make sure all decision-making is data driven, and thus, accurate.

Cross-utilization of different ingredients
You might be in the habit of separately ordering ingredients for each dish on your menu, but this may not be the most efficient way to place orders. A SaaS inventory management system will give you the most visibility into what you order, and this high-level look will help you spot opportunities for the cross-utilization of ingredients in dishes that share common components. This will streamline your orders and ensure you have only what you need.

Easy integration with POS systems
Older supply solutions often can't integrate easily with a business's existing point-of-sale system, which means managers have to gather data from their POS systems and enter it manually into the supply management software.

SaaS solutions have a modular design and can easily connect with most POS systems, ensuring that what sales get recorded make their way into the database. Accurate sales data is essential for order forecasting, so having these systems work together is key for making sure you have the data you need to drive smart inventory management.