Part II: Bridging the Gap between Procurement and Finance. A New Vision for AmrestFinancial Services
Amrest, a restaurant operations leader in Europe, has shown growth and resiliency despite economic downturns. By bridging their finance gaps, their business as seen significant growth and expansion.
Amrest runs more than 2300 locations, including KFC, Pizza Hut, Burger King and Starbucks franchises, along with its own brands of restaurants. They are a leader in 25 countries, with over 30 million customers every month, over 45,000 employees, and almost 2 billion in sales in 2021.
When it comes to estimation-based forecasting, Amrest has been able to capture some data, but they need to have the right tools in place to effectively utilize their data sets. Overall, their strategy must move toward data-driven decision-making to provide real-time information visibility. Additionally, historical data can provide a more accurate breakdown of initial startup costs. Although Amrest utilizes a sourcing process, the liquidity gap blocks past analyses and data.
Amrest onboards new vendors at competitively-positioned pricing on a regular and consistent basis. However, they could probably leverage their great buyers in a better way by having proper data delivered to them upfront and allowing them to identify the most strategic new projects. By bridging the gaps, Amrest could even start the tendering process earlier with a wider range of suppliers
Part of the Solution. Suppliers can support company growth as part of the Amrest procurement journey.
The level of supplier involvement depends on the category of spend. In some of Amrest’s categories they are very experienced or have specialists looking at innovation. In this case, then suppliers are part of the process and part of R&D. Nevertheless, it’s not unified within Amrest because they don’t have the perfect strategic payment circle, just yet.
Engaging strategic suppliers in the process can help mitigate risks.
Creating fuller visibility into supplier risks, Amrest has the power and intel to switch localizations or deliver from different warehouses, creating a stronger supply chain.
Auto-monetization is one of Amrest’s main points of focus today; having catalogs properly created, available, and up to date is fundamental to their success.
To eliminate unnecessary steps and control deliveries, Amrest needed an automation tool to connect their operations with the finance department. To streamline activity, all regular services and shipments could be entered into the system annually, rather than weekly. The automation functionality created tremendous time and cost savings across multiple departments in the payment cycle.
Amrest has a multi-layered business model, and internal departments need to be part of the strategic payment cycle.
For example, when Amrest is opening a new restaurant, there are multiple steps and decisions that need to happen concurrently. With an optimistic opening schedule (150 new locations per year), the team must accurately assess current market challenges, price increases, and delivery lead times. Creating customizable and consistent processes can reduce the overall risk for Amrest.
This process can also carry over into the supply chain where Amrest needs visibility and the full strategic payments process to identify key suppliers. Although Amrest has strategic categories of spend, without the full picture across all the countries and all the markets there are duplications and gaps.
The supply level view is critical when creating one, unified team to support Amrest’s internal operational needs. By folding the suppliers into this perfect strategic payments circle, the power of the single process goes even further.
For Amrest, liquidity is not just about paying suppliers on time, but it can also address challenges in the supply chain. Part of procurement, driven by finance–payment is a key part of the supply chain partnership.
Automation creates a seamless and consistent experience for both the employee and customer. The restaurant business is dependent on the overall experience so “back of the house” details, such as employee uniforms, staffing, training, deliveries, POS systems–are all part of the customer experience. In addition, quality is the cornerstone of the food and beverage industry and effective sourcing and forecasting is crucial to their operational success. Amrest requires efficient supply chain schedules to operate effectively to deliver high standards of customer service on a daily basis.
ESG and the sustainable supply chain is also important within the procurement process.
For Amrest, sustainability is central to their mission and vision. On the customer side, replacing plastic with eco packaging is one step, but the supply chain must also adhere to the new standards and processes. By having conversations with our suppliers upfront, Amrest can filter sustainable and ethical suppliers during the onboarding process to meet their needs..
Energy costs are a huge part of Amrest’s spend, so any solutions that enable energy savings are incredibly impactful for the business and our environment. To put this into perspective, restaurants have fridges and fryers in use all the time, 24 hours per day. Therefore, if a supplier can provide energy-efficient appliances that garner long-term savings, then the upfront costs are justifiable and warranted.
Bridging the visibility and liquidity gaps.
Once all the requirements and expectations from the company, from the management, from main users are captured, then Amrest can start drawing the strategic payments circle and seeing how it should work, within the Ivalua tool and other system components.
Due to all the complexity of brands and processes, Amrest cannot just remove older systems. They also must fulfill contractual obligations with some suppliers. Given the varying degrees of flexibility and negotiation involved, contract management must be part of their global strategic payment journey.
Long-term, Amrest aims to have one global process for their procurement across nine different brands. Clearly, there are varying business expectations and the need to address transformational change management. Overall user adoption, training, multi-currency, multi-languages, and multi-brands will require continuous process improvement and real platform agility.
How can Amrest start this journey? A strong procurement and finance relationship adopting the strategic payment cycle
Finance should be an active partner in your procurement journey and can directly benefit from automated processes. One business journey, one inclusive team, with one mission, to grow year-over-year, creating more efficient processes and better strategies to propel forward.
After strengthening their operational foundation with the Ivalua Platform, the next steps for Amrest include mapping out their expansion journey and data model. The modular approach of the Ivalua solution allows Amrest to take an evolutionary and step-by-step expansion of the value. Their businesses can onboard new capabilities, such as direct supplier payments and/or the powerful contracting elements to bridge even more financial gaps. With these enhancements, Amrest is ready to both continuously improve their user experience and control business spend. In today’s volatile market, Amrest can rely on the agility and adaptability of Ivalua’s tools to ensure both operational stability and long-term growth goals.
As showcased in Amrest’s story, the Way you Pay Matters! Turn your Account Payables team into a strategic payments function!
Download our Checklist and watch our on-demand video to see your own AP potential in action!