Independent restaurant owners don’t have the purchasing power of larger operations, unless they pool together in group purchasing organizations (GPOs). As a member of a GPO, restaurant owners boost their buying power and take advantage of savings programs.
An entrepreneur with insider restaurant industry knowledge saw the creation of a GPO as a viable business opportunity and turned to Bright Software to help bring it to fruition. Technology would be a critical necessity to sort and combine millions of various format invoices into one standard format.
A new system to support the business was built from the ground up. The premise was that members would give permission for the GPO to obtain their invoice records from the largest food distributors, like Sysco and US Foods. With permission secured, the food distributors would be free to send invoice files electronically to the GPO. The GPO needs to know what their restaurant members ordered, how much, and how often.
One of the major challenges was integrating food distributor invoices that arrived in different formats via different technical means into one coherent database. No matter how distributors delivered information, all had to be automatically pulled into the system. Some files were Excel, EDI, or comma, tab or pipe delimited format. Some files were delivered to a monitored email inbox or ftp server. The software checks for file updates and pulls data into the database. A small percentage of files from some distributors would have to be manually imported via a user interface.
In the new system, every line item is a past order of a specific item at a restaurant. There are tens of millions of records. Reports can be run with various criteria. So, by mining the data, the GPO is able to approach food distributors to secure group pricing rates based on the collective buying power of the GPO members. The GPO approaches food distributors for negotiations and purchasing contracts, knowing their members will have a need for certain number of units of meat, seafood, produce, bread, dairy, or specialty items in the coming weeks. Members save more money than if they purchased independently.
If Bright Software can help you with your new business idea, we’re happy to help.