AI is now a standard in restaurant supply chain management, as it helps restaurant operators and owners streamline their operations, save money, and become more efficient.
Fast food chains like Wendy’s have been using AI technologies within their supply chain and operations as a part of the larger change process.
In a purchaser’s market like foodservice, we believe it’s important for business owners and operators to dissect just how the integration of AI can foster resilience.
The Impact of AI on Supply Chain Management
Most importantly, AI now has the ability to transform every facet of supply chain operations with features like automation and real-time data analytics, in addition to improving decision-making capabilities. Traditional supply chain management often involves manual tasks that are prone to inefficiencies and errors, but AI offers solutions that allow companies to manage these processes with greater speed and accuracy.
One of the greatest benefits that AI brings to logistics is its capacity for more accurate demand forecasting.
AI can predict future demand trends using historical data with a greater probability (around 95–98%).This is particularly useful in the foodservice industry, as perishable products and variable customer demand have more weight on inventory management.
Put simply, with the help of AI, companies can find a sweet spot where they maintain enough stock to reduce waste and continue offering products customers want.
But more than inventory management, AI plays a great role in logistics as well.
These systems are programmed to consider external factors, such as traffic patterns, weather or supplier constraints in finding the most optimal paths for relocating products and merchandise. They shorten delivery times, reduce transportation costs, and minimize disruptions.
AI is also making strides in sustainability.
By helping businesses optimize their operations, AI can reduce energy consumption and waste. In the agri-food sector, there’s a growing emphasis on creating supply chains that are both efficient and environmentally responsible.
Food Cost Management Technology
Managing food costs is a very cumbersome, ongoing task.
Prices of raw materials continue to fluctuate, the supply chain often gets disrupted, and demand can frequently be unpredictable. It is here that AI steps in, using insights that facilitate a business in making much better purchasing decisions by reducing waste and optimizing pricing strategy.
For instance, AI-driven inventory management systems can automatically track inventories in real time, reorder supplies, and notify them when the demand for a certain item is forecasted to rise. This could help restaurants avoid overstocking and spoilage, both of which directly affect the bottom line.
AI can also analyze price trends and customer purchasing habits for restaurants to adjust their menus and prices to maximize profitability.
Wendy’s has been at the forefront of this AI food cost management revolution via its QSCC. The fast food giant partnered with Palantir Technologies, using AI throughout its supply chain to integrate information from a network of suppliers, distributors, and restaurants for a unified view of operations.
Using a data-driven approach, Wendy’s puts itself in a position to manage its inventory more effectively and improve its forecasting of demand and order filling.
Better Efficiency with AI
Efficiency is a key focus in any industry, and with AI in supply chain management, businesses can achieve higher levels of productivity than ever before. AI helps by automating repetitive tasks, optimizing logistics, and enabling real-time supply chain adjustments.
The agri-food supply chain has always posed special efficiency challenges, as the sector is made up of a well-interlinked network of farmers, manufacturers, distributors, and retailers. Add to this a number of complex variables, such as perishability, seasonality of raw materials, quality variability, and a set of regulatory compliances, and things get messy.
AI addresses several of these challenges by improving speed and accuracy of supply chain operations.
This is evident in the ability of AI systems to analyze historical and real-time data in order to forecast a surge in demand during peak seasons, whereby it is ensures business owners have enough inventory to meet their customers’ needs. AI also helps follow the needed compliance with food safety regulations by ensuring that products are stored, handled, and transported within required standards.
Of course, what is an efficient supply chain if it isn’t resilient?
Thankfully, AI has also proven to help out in this area, especially since the major disruptions of the COVID-19 pandemic underlined so many areas of our supply chain vulnerabilities. AI does a particularly fine job of identifying potential risks, predicting disruptions, and providing strategies to mitigate their impact.
With this technology, businesses can recover more quickly from disruptions and maintain operational continuity.
Wendy’s Approach to Supply Chain Innovation
As mentioned earlier, with the help of Palantir Technologies, Wendy’s made giant leaps toward integrating AI in its supply chain. With its AI platform and data aggregation capabilities, Palantir helps Wendy’s achieve a more comprehensive view of the operation of its supply chain.
In turn, this initiative helps automate key processes like inventory management, demand forecasting, and order fulfillment.
By leveraging AI to optimize these functions, Wendy’s aims to improve operational efficiency, reduce costs, and free up staff to focus on more strategic tasks.
Beyond supply chain management, however, Wendy’s is also starting to explore AI in other areas of its business.
For example, the company is piloting an AI-powered drive-thru system called Wendy’s FreshAI, developed in collaboration with Google Cloud. This system is designed to automate the ordering process, potentially improving order accuracy and reducing wait times.
In 2023, Wendy’s unveiled that it’s also in the process of testing an underground autonomous robot system for delivering digital orders.
While these advancements are promising, they come with challenges.
Integrating AI into existing systems requires significant investment in both technology and training. There have also been plenty of concerns about data security and privacy, especially when dealing with sensitive customer information.
While Wendy’s has made efforts to mitigate these risks, successfully implementing AI will depend on the company’s ability to continuously monitor and adapt.
The Future of Supply Chain Management
As the restaurant sector continues to evolve, we’ll see the role of AI in supply chain management grow too. Companies that invest in AI-driven solutions now will be better positioned to improve their operational efficiency and become more resilient in an increasingly complex global marketplace.
If you’re a business looking to capitalize on these opportunities, partnering with industry leaders like EMERGING can provide the resources and expertise you to successfully integrate AI into your operations.
EMERGING offers a plethora of strategic growth resources, mentorship, and connections with key players in the food and beverage industry, helping companies implement innovative solutions and scale their businesses.
As AI continues to reshape supply chain management, now is the time to embrace these technologies and position yourself for long-term success in an increasingly competitive environment.
