Big Fast Food Chains, as McDonalds – have its business circle completed. McDonald’s replaces most of its suppliers through backward vertical integration (Buying Suppliers Companies) in order to reduce cost and ensure that its products are of top quality. They also have their own fleet of transportation, warehouses to manage stock and distribution to its restaurants (Franchisees). Financial muscle and well-structured distribution network, will allow this type of companies to overcome and easily keep on during quarantine.
However, small restaurants (entrepreneurs) are facing difficult times and even have a potential risk to go bankrupt, the situation will affect its distributors (That are losing fresh products) on their warehouses (Stock Keeping Unit) as the producers – who are also losing, as no many could purchase – have harvested or produced in advance products to keep food market running and stocked. At some point, if the quarantine gets expanded, we will face shortage of some products, as the producers are not able to keep producing as they used to.
Said so, after quarantine, both; big and small restaurants will face adversities on running their business as they were doing it, product variety will be quite hard to overcome, as distributors will principally focus on supplying large chains of restaurants, that will affect customer experience and probably return ability of its clients.
It is advisable to proper tele work and start planning ahead with partners (Suppliers, Producers, clients, etc.) in order to have everything ready to go after the crisis is overcome, as many will go out and fill restaurants. As per the News, many entrepreneurs have fired its employees as strategy to survive, nevertheless, after quarantine, and having in mind that they could not properly train staff, losses in terms of bad service will be notified.
Companies shall take this period in order to re-establish strategies, check new systems for inventory control, developing new communications channels, offer mew marketing campaigns and properly study where to reduce cost.
The blog of Logistics at MGEPS at UPV 