Business / Tech

How delivery services are impacting the supply chain

This ability to order food and have it delivered quickly has caused the delivery market to grow to a 10 billion dollar business, a number that is likely to continue growing as new technologies and strategies emerge.

With the integration of delivery services into our daily operations, individuals can receive items directly to their doorstep at convenient speeds. Although this trend has brought businesses such as Grubhub, Instacart, DoorDash, and Uber Eats to the forefront of the industry, their services have brought about side effects in the supply chain.

In current times, many individuals rely on these services for convenient and contactless ways to receive meals from their favorite restaurants and essential grocery items now more than ever. With regulations placed on which establishments can remain open and which must stay closed for the foreseeable future, food delivery is becoming more essential to the way we operate as a population.

This ability to order food and have it delivered quickly has caused the delivery market to grow to a 10 billion dollar business, a number that is likely to continue growing as new technologies and strategies emerge. But, how has this shift caused the supply chain to change?

Quality vs. Speed

With the ability to order on-the-go from a mobile device, many consumers find they are able to make more comfortable transactions with their favorite restaurants and stores. When ordering a meal from a third-party service provider, consumers can customize their orders and select the exact time they wish to pick up or have their food delivered to their house.

However, when too many orders of this type arrive at a restaurant at the same time, it can cause a back-up in the kitchen. This may force some businesses to risk high-quality presentation of their food in order to satisfy the customer demand.

Finding creative solutions to reduce the risk of decreased quality may require new technologies and re-organized workflows. National chains such as Chick-fil-a and Starbucks have begun adopting the emerging concept of “dark kitchens.”

These kitchens reduce the front-end processes of a restaurant to create a distraction-free, streamlined back-end kitchen that is used solely to prepare mobile orders. It has also helped provide opportunities for smaller businesses and startups to break into the restaurant industry without breaking the bank with the overhead costs of in-house dining experiences.

Because of the high output dark kitchens produce, they must find a trusted third-party logistics vendor that can help them maintain their supply and demand. Additionally, new equipment and process management may be needed for this reorganization. It’s important to utilize a trusted vendor that knows how to handle a restructuring of this nature.

supply chain delivery services
Chick-Fil-A mobile ordering

Emerging Technology

As this industry continues rapidly growing, we are beginning to see an influx of new technologies emerging that will help restaurants deliver the best experiences.

The impact that mobile applications have had on the industry has been a driving factor in its growth, as consumers are no longer limited to having just pizza or Chinese food delivered to their doorstep. They can now choose from many of their favorite local and chain restaurants as well. This is beneficial as more restaurants are relying on these services during the current pandemic to serve their customers better. Furthermore, the industry could soon be seeing even more technologies that will reshape the way we order food.

Everything from delivery bots to social media, virtual assistants, and IoT devices is beginning to shine as innovative new methods for ordering food on the go. The limitations of what could be developed next seem to be virtually nonexistent, but each one will be vital to the industry’s future.

Implementation of these technologies and testing of their effectiveness is an important tool to their success. Beta testing is a traditional methodology that restaurants utilize when discussing new technologies, often piloting products in a few select restaurants to start. But do these services have enough time to spend testing?

If businesses do not adapt to emerging technologies quickly enough, they could risk falling behind other competitors or the industry as a paradigm shift to highly tech-based operations. Yet, implementing too quickly could have negative impacts as well. This is because businesses need time to properly prepare their operations, train their staff and drivers, and educate consumers.

Companies must rely on the basis of their pre-existing technologies and the experience of others in the industry to trust which processes could work best for them. It could also prove valuable to rely on the success of other companies and their testing of various technologies throughout their restaurants.

Fleet Management

Delivery needs to be quick, but it also needs to be strategically optimized for the best delivery experience possible. With this shift, many suppliers are thinking more creatively about maximizing the capabilities of their fleet management processes.

For example, restaurant suppliers will need to rely on more frequent and shorter delivery trips to get essential products to the restaurants they serve. To adequately supply a plan, businesses can lean on supply chain management solutions to build a strategic vision from production to consumption.

Placing a stronger focus on sustainability through streamlined fleets with smaller vehicles making deliveries to restaurants and grocery stores is important for suppliers. This has helped companies focus on reducing gas consumption, fuel emissions, and labor costs.

Businesses are also focusing on route optimization to reduce the mileage on vehicles and the hours drivers spend on the road. Considerations should also be made for using in-house fleets through their delivery services, or to partner with third-party services that offer their own platform and fleets.

With in-house fleets, businesses are able to maintain control over their supply chain and all costs associated with delivering the food from restaurants to a consumer’s front door. There are also advantages in reducing overhead costs of owning and maintaining delivery vehicles and drivers when using an external partner. Companies should consider the pros and cons of both before coming to a decision. As the industry continues to shift towards on-demand delivery services, businesses must prepare their organizations for their impact on the supply chain. Adopting new technologies, maintaining both quality and speed, and creating a sustainable fleet management system could help your business thrive.

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