By Mani Kulasooriya, Co-Founder and CEO, Cut+Dry - 9.5.2024
Restaurants run on tight margins, leaving very little room to be wasting financial resources on inefficient processes. One of the most time-consuming back-of-the-house tasks is ordering supplies, especially when a restaurant relies on multiple suppliers for the items it needs. When done manually, this process can quickly become a significant drain on time and resources.
Depending on the number of suppliers and the frequency of orders, our estimates show that restaurants can spend anywhere from 10 to 18 labor hours a week managing orders. This manual process often involves writing down lists of what has to be ordered, contacting suppliers through calls, texts, emails, or (god forbid) faxes, following up for confirmation, and then looking out the window until the truck arrives. It’s outdated and inefficient, to say the least.
While technology in a restaurant’s front-of-the-house has evolved steadily with online ordering apps, point-of-sale (POS) systems, self-ordering kiosks, contactless payments, etc.; the back-of-the-house has lagged behind. Restaurants are not at fault, though. The slow adoption of technology by suppliers and foodservice distributors has been the primary barrier to modernization.
While setting up a custom e-commerce platform was traditionally cost-prohibitive for distributors, requiring a sizable capital investment and recurrent maintenance costs, the landscape is shifting. Today, third-party e-commerce providers (like Cut+Dry) offer distributors white-label e-commerce solutions that are feature-rich with strong user appeal. Distributors no longer have to invest an arm and a leg to get themselves an e-commerce solution.
Save time and money
Ordering online saves time – there’s no debate on that. For example, Coupa Cafe has nine locations and previously managed their orders via phone calls, faxes, emails and even during site visits by distributor sales reps. Not only was this an extremely challenging task to manage, but since everything was done manually, it was impossible to track who was ordering what, from where, how much was ordered, and what was delivered. It was an operational nightmare that stressed out their staff – and they were spending four to six staff hours per week on this manual ordering process.
By transitioning to an online ordering system that allowed them to place all orders digitally and keep records instantly accessible, they were able to streamline their operations. The result? A dramatic reduction in time spent on ordering – down to just one to two hours per week, representing a 70% decrease in labor time.
For restaurants, this time savings can lead to significant financial benefits. In California, with a minimum wage of $16 an hour, reducing labor hours for tasks like ordering could save restaurants thousands of dollars a year. This freed-up time will also enable staff to focus on meaningful activities that could drive sales – from customer service to upselling and cross-selling – driving revenue.
Features like order guides can further increase efficiency. Restaurants usually order the same things at the same frequency, in the same quantities. With order guides, this process can be partially automated, so staff simply review and approve recurring orders instead of manually inputting them each time.
Operational efficiency
While saving staff time is a big plus, e-commerce platforms offer much more than that. These systems reduce order errors, speed up dispute resolution, and make the entire ordering process more intuitive. With clear images and detailed product information, decision-making becomes faster—restaurants know exactly what they’re ordering. Real-time delivery tracking also reduces the time spent worrying about when shipments will arrive.
Another advantage is digital payment integration. With most e-commerce platforms, restaurants can pay distributors online, eliminating the need for accounting teams to manually cut checks and enter invoices – a time-consuming process, especially for larger operations with multiple locations. By streamlining these financial workflows, restaurants can significantly reduce administrative stress.
With an e-commerce solution, all purchase orders are generated automatically and are available at the click of a button. Accounts teams can easily reconcile orders and payments, select and batch together invoices based on dates or suppliers, and pay the distributor with another click of a button. Easy as pie.
E-commerce platforms are not just about ordering, it’s about covering every step of the procurement process from start to finish that goes on in a restaurant. Browsing items, placing orders, tracking delivery, dispute resolution, and paying for the goods. Restaurants save time every step of the way – and while exact savings may vary from business to business, the overall financial impact is significant, especially in an industry where every dollar counts.
Mani Kulasooriya is Co-Founder and CEO of Cut+Dry, a single, powerful, easy-to-use platform to make food commerce a more enjoyable, profitable, and less wasteful experience. A serial entrepreneur, Mani has spent the past decade at the intersection of food, restaurants, and technology. He started his career in Fintech building payment systems at Citibank and Yahoo. This training laid the groundwork for Mani to conceive and design complex, scalable, transaction-based businesses with a payments element. Mani went on to co-found CAKE, a restaurant POS startup, which was acquired by Sysco (SYY). While at Sysco, Mani helped create a brand new technology organization, Sysco Labs, which he helped grow to a 400+ team.
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