Managing Your Vendor Network: The Key to Economically Sustainable Operations in the COVID Era

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During the COVID-19 outbreak and subsequent quarantine, most restaurants are just working to keep their doors open. One thing that is not typically top-of-mind during the quarantine is sustainability, even though sustainability could mean the difference between success and failure. Keep in mind, sustainability has three elements: social, environmental, and economic. The economic aspect of sustainability often takes a back seat to the other two elements, but right now, it’s the key to surviving and thriving in the time of COVID-19.

One thing that many restaurants are not doing right now is taking the time to evaluate the core services that keep their businesses operating. In light of everything else, it doesn’t seem like a priority. The truth is: waste management, recycling, hood cleaning and grease trap services are more often than not a source of overspending and inefficiency. Taking the time to assess, centralize and consolidate your network of service providers ensures the best pricing, and keeps already-thin margins from getting thinner.

Consolidation: Increase your Buying Power

Every restaurant location you manage has a collection of services that are critical to operation. From waste removal, recycling, and facilities management to hood cleaning and grease trap services, every different location has a list of potentially different vendors. All of these different vendors have pricing based on the number of locations, service frequency, and geographic location.

By finding a single vendor that can handle multiple services, you’re more likely to get better pricing. Just like bundling your cable and internet service saves you money at home, bundling your restaurant services can dramatically lower your operating costs. Applying these savings across multiple locations will further increase your savings.

Centralization: Protection from Overspending

In a lot of restaurant operations, the services are purchased and performed on a location-by-location basis. You may have five locations within a geographic area that are all set up differently. Not only is this method highly inefficient, it exposes you to the likelihood of overspending. If you’ve got a huge collection of moving parts to keep your operations running, you might miss things like a trash hauler charging a higher rate at one location than another.

By centralizing all of your locations under one vendor, you get complete, uncomplicated visibility into exactly what you’re paying for each service at each location. This not only declutters your accounts payable processes, but it ensures that you’re paying for the right services at the right locations at the right price.

Additional Benefits: Compliance, Ease of Use, Reduction in Overhead

Having a single vendor manage all services across all locations means that those services will get the full attention they require, rather than added to the already-full plate of someone with other primary responsibilities. A bloated, inefficient collection of vendors makes it harder to keep your locations running smoothly and on-budget. Even if you have a team of people in your operation whose only job is to oversee the services that your locations need to function, it’s still more effective to outsource that responsibility to a service provider that specializes in waste, recycling, and restaurant-specific services.

Right now may seem like a crazy time to re-evaluate your core service providers, given the current climate of the restaurant industry. In reality, there has never been a better time. The savings you can experience are only going to grow as business picks back up. Any padding you can add to the bottom line in the toughest of times only gets magnified as your business operations begin to return to normal. Taking the time to focus on sustainable business practices like consolidating and centralizing your service providers across all of your locations is a practice that will continue to pay off.

This article originally appeared at Modern Restaurant Management

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