These are challenging times for the food service industry, but suppliers are also facing new hurdles for a number of reasons. Much of what we’re seeing right now shows that dramatic restaurant supply chain problems are a multi-faceted and complex set of obstacles to business-as-usual.
Backlogs and Back Orders: Why Are They Happening?
As a top restaurant equipment and supplies dealer in the U.S., we are seeing significant numbers of back orders piling up for various types of products. One of the contributing factors is a shortage in raw materials, which we’ll get to in a little more detail shortly. There's also a lack of skilled workers in factories, and a variety of shipping issues. For example, a recent industry report showed wait times up to 5-6 days for shipments entering major ports in Los Angeles and Long Beach, CA. The Port of Long Beach has continued to exceed import records over the last 12 of 13 months, and in July 2021, the Port of Los Angeles recorded the 12th consecutive month of year-over-year cargo increases. All of this means customers are waiting longer for orders, and orders are backing up. That’s bad news if your restaurant needs something right away to improve daily operations!
The Food Supply Chain and Raw Materials Problems
The issue with raw materials, like stainless steel and other manufacturing supplies, is also multipronged. Due to social distancing in the industry, raw material mining has been reduced causing a lack of capacity in shipping those raw materials. There's also the impact of 2018 steel tariffs for importing products to the U.S. This combination of major trends has led American producers and providers to issue dire warnings to their customer bases about what's realistic in today's equipment market. You just can’t get most things on-demand the way you could in 2019 or 2018, and too many buyers are slow to react to the quickly changing realities and new limitations affecting their businesses.
The Pressure of Increased Demand
Part of the larger background for shortages in any industry is the pandemic, which totally transformed the business world over the past year and a half. We talked about this quite a bit on the blog and elsewhere, but the food service industry was really hit hard, and it's still clawing out of many of these pandemic-related disruptions. At the beginning, nobody wanted to eat in restaurants. In many cases, nobody was allowed to eat in a restaurant. Business actually dropped to zero, or near zero. Restaurants tried to survive on takeout, and sadly many did not last. Those that did not close their doors had to adapt in a major way. Workforce problems were just one example… Fast-forward to today and food services businesses face an opposite problem. They’re reopening – demand is increasing rapidly – more rapidly than you would expect in a natural business environment. So it stands to reason that everything from workers to equipment is suddenly in short supply!
What Items Are Affected?
The short answer is that nearly all restaurant and food service equipment and supplies in the restaurant supply chain have been made scarce by this major global change in the economy. Everything from walk-in refrigerators to glassware is suddenly scarce, potentially more expensive, and often takes more time to get to its destination.
How To Plan
All of that is the bad news. We’re also here to explain some of the good news, and some of the survival tips that we've seen businesses use to ride out these scarcities and shortages remarkably well, as we do our best to remain a consultative partner to the foodservice industry. First of all, it makes sense that in this kind of context, business buyers should order early. Don't wait until something breaks, or you're down to your last box. Be proactive and plan ahead, and you'll be ahead of the curve as you try to compete with others for order deliveries.
Here's another very important tip – to the extent that you can substitute unavailable items for other similar items, you can enhance your supply chain in a big way, and become much more agile in how you supply your restaurant. One particular item from a given manufacturer might be backlogged for months. Another one that's slightly different may be available in a couple of weeks. Some simple problem-solving and adaptation will allow you to have your desired order much faster, so that you can get on with everything else that you need to do in your busy food service business.
The third big restaurant supply chain tip has to do with communication. Our teams are working overtime to help clients get what they need as soon as possible. Give our team a heads-up about what you need, what challenges your business is facing, and how you can adapt, so they can quickly find a solution. A quick phone call early on in the process sets the stage for success. Every bit of information that you give our customer service team allows us to tailor your plan to your needs, and anticipate how to get you the equipment and supplies that will power your business.
As with so many other complex things, initial proactive planning can make things much easier. The mistake that a lot of businesses make is to just assume that the world around them is pursuing business as usual. This situation is not business as usual at all – we’re all dealing with massive disruptions, and how we do that may very well impact the health of our businesses in the years to come.
For everything that you need to manage a busy restaurant, you can continue to turn to Chefs’ Toys for all of your equipment and supply needs. We are “for chefs, by chefs,” – that means our people have actual restaurant experience, and understand first-hand how the business works. It means we can advise you from a position of experience, which is particularly important in a time when food services businesses simply have to be at the top of their games to be successful.