The speed of data in 2018
More of the world becomes digital every day. With that, as more of us become technologically literate there is an accelerated transfer of information. Former Google CEO, Eric Schmidt, mentioned an amazing statistic in 2010, which was – ‘every two days we create as much information as we did from the dawn of civilisation up until 2003’. Given the exponential rate of progress in technology and automation, it is alarming to think how that statistic differs 8 years later. Granted, the vast majority of this information will include user-generated content, such as tweeting, Facebooking, memes and pictures of cats amongst other things… The development of technology has undoubtedly increased the speed of B2B transactions. This in turn has allowed for a higher frequency of transactions to scale to the ever-increasing demand in global commerce.
Traditional Practice vs Supply Chain Automation
Focusing on the impact of this on the supply chain for a hospitality operation – traditionally, there were a number of steps in the purchasing process that involved a manual transfer of information. This was through different mediums, ranging from a purchase order form to the back of a cigarette packet! The traditional methods of scribbling down orders and budgets increased the risk of potential miscommunication, causing a divergence between what was expected, and the reality of what is received at multiple steps in the chain. Through our experience, a conventional example of a traditional workflow is; generating a purchase order over the phone > delivery > the purchasing department/chef checking the produce to ensure it matches > the physical receipt and purchase order going to the finance department for reconciliation and the produce going to the kitchen. Whilst this is over the course of a few days, whether or not the chef is sticking to the forecasted budget is only confirmed at the end of the month.
The modern method is for the entire ordering and reporting to be through a digital portal, which involves instant forecasting against the budget and faster reconciliation. The faster transfer of information through a centralised system allows for greater transparency, more flexibility, more control, effective communication and it frees up time. It is proven that people who have embraced technological systems are able to spend more time on strategic procurement and supplier management, which would usually have been spent on operational functions and administrative practices. This has enabled adopters of hospitality eprocurement software to optimise their performance and spend more time focusing on operating the business.