Digital transformation through the adoption of new technology has a big role to play in increasing the revenue, cashflow and profitability of a business. This fact extends to B2B businesses in various industries as well. Let’s take a look at how technology adoption goes a long way in improving a central kitchen’s ordering system.
#1 What is a Central Kitchen?
A central kitchen refers to a common kitchen which prepares, stores and delivers food for different restaurant franchises – all owned by a restaurant organization. This means that the restaurant’s branches are not in charge of sourcing ingredients for their food – they only need to take care of serving meals at their respective locations.
#2 Why do Some F&B Businesses Opt for a Central Kitchen?
There are some good reasons why some F&B businesses will opt for central kitchens, but the main reasons are:
Preserving a consistent brand image and quality
When the food served has consistent amount and quality across each branch, the restaurant chain solidifies its reputation. This brand image allows their customers to expect the same menu, quality of food, and serving size regardless of which branch they visit.
Save labor costs
Instead of having to train new cooks at each branch, an F&B brand with a central kitchen only needs to train cooks within their kitchen itself. This lowers the headcount required for meal prep across their branches as well.
Improve operation efficiency
Preparing a meal from scratch takes time. Customers are expecting speedy service and serving time, which means that restaurants do not have the luxury of preparing, let’s say, chicken rendang, from scratch anymore. Central kitchens will prepare, pack and freeze these meals for quick reheating, making these meals as good as fresh again in a short time!
#3 What are the Challenges that Central Kitchens Face?
Of course, these benefits do not come without a cost. Central kitchens require a high set-up cost, considering all the space and equipment needed to prepare and store meals before they can be delivered to other branches.
Set-up costs aside, central kitchens can also expect to face challenges such as the ones below.
Missed Revenue Opportunities
Without proper insights, many F&B brands would mistake the wrong products as their best sellers, while the real revenue-boosters were placed in lower priority. Different outlets would have different best-sellers as well, which the central kitchen would not know due to the lack of insights.
As a result, the central kitchen could be missing out on better revenue opportunities by not sending out the right products to the respective outlets.
High Admin Headcount & Operating Cost
The bigger an F&B franchise is, the higher the admin costs they will likely need. The central kitchen will require more than one person to take orders from branches, dispatch them, and procure ingredients for their own meal prep as well.
This is all aside from having to reconciliate payments in the accounting side – managing different payment terms and credit limits for each franchisee, which invoices are due, etc.
High Probability of Order Duplication and Errors
Without a properly digitalized environment, an F&B brand or company running on a central kitchen could be utilizing emails or WhatsApp texts to communicate meal shipments, low-on-stock products, and more. The central kitchen would find it difficult to track which orders are getting missed out on. Franchisees would also have a hard time viewing their outlets’ past orders or current order status quickly either.
On-time Payment by Franchisee
Cashflow is important for every business. For most F&B businesses, it is imperative that they receive on-time payment to maintain a healthy cashflow. However, this does not always happen, resulting in the business not having sufficient capital to move their business towards the next steps.
#4 Digitally Transform Your Central Kitchen with these Features
When you adopt an end-to-end solution for your central kitchen, you could be solving all the challenges above and so much more. Some of the features that you should look for in any digital solution that you’re looking to adopt should include the following:
Allow your F&B franchisees to place orders in a highly customizable portal with the least possible effort. This also includes online payment, full catalogue browsing, real time product availability updates, and more. One-click reorders and order shipment tracking would be essential as well.
You should be able to monitor ingredient purchase and distribute to outlets with strict quality control. The central kitchen should also be able to set their minimum stock holding quantity to ensure that your outlets never run out of certain products.
View your outlet’s performance at one glance. Ideally, you should be able to see how much food each franchise orders each time, their due invoices, past payments, most-ordered food and more. Better yet, you can also reduce food wastage and increase food usage efficiency through full visibility on the amount of ingredients being used, as well as the amount of food being produced by every franchisee.
#5 Kickstart Your Digital Transformation with Boostorder
Boostorder provides an end-to-end digital transformation solution geared to help B2B businesses operating on central kitchens and many other industries, bringing them to the next level. Visit our products or solutions page to learn more about how our services can help you, and contact us to get a free demo session here!