The F&B sector’s digital transformation

As manpower problems persist, F&B businesses are stepping up their digital efforts

Faced with a tight labour market, food and beverage (F&B) operators have in recent years looked to technology to ramp up productivity and reduce their reliance on manpower. The need for digital transformation has gained greater urgency following the Budget 2019 announcement earlier this year to tighten the supply of foreign workers for the services sector; adding further pressure to an industry already struggling to hire employees.

Some have already taken the leap towards adopting digital technologies to help streamline their operations. Coffee shop chain Hai Zhong Bao implemented a mobile ordering and payment solution two years ago to manage its online pick-up and delivery orders, while Kopi Roti – which serves local favourites at its outlet at Clarke Quay Central – rolled out a self-ordering system last year that allows diners to place their orders and make payment directly from their mobile devices or devices provided in-store.

“With our limited resources, we were struggling with manpower and productivity issues. The self-ordering system showed us a way that technology can be used to resolve our challenges. It also gave us the confidence to embark on digital transformation,” said Mr Steven Manimaran, Director at Kopi Roti Holdings.

Big companies going digital too

It is not just small F&B businesses that are going big on digital. Leading catering company Neo Group plans to consolidate its operations in a new high-tech hub in Jurong to improve productivity and reduce its manpower requirements through the use of automation. The group’s 300,000sqft integrated facility — which will be up and running by the fourth quarter of 2020 — will comprise central kitchens, offices, warehouses, logistics and storage facilities, and other operations.

Multinationals are also getting in on the act. Food delivery giant Deliveroo recently unveiled its largest dine-in space at one-north, housing 11 food concepts from seven restaurant operators that utilises a fully automated ordering system. Customers first place their orders at the self-serve kiosks onsite. Once the food is ready, customers will receive a notification on a digital status board to pick up their food from the designated cubby and choose to dine in or take away the food. According to Deliveroo, the technology will boost the seven restaurants’ operations as a routing system will enable the facility’s 10 kitchens to be more efficient with orders.

Assistance for SMEs

F&B players who have yet to go digital can get help by tapping various initiatives such as the enhanced Productivity Solutions Grant (PSG), which helps companies adopt pre-approved IT solutions that raise productivity, announced at this year’s Budget. Following the enhancement, the PSG now includes a training subsidy that covers 70% of the costs for out-of-pocket training expenses.

In its Year-in-Review report released in March, Enterprise Singapore (ESG) said that it would focus on helping SMEs embrace digitalisation at an earlier life stage. ESG will also foster market-led innovation to ensure that digital solutions are developed based on industry needs rather than be driven by technology companies.

Beyond government schemes, private sector support is also available. DBS Bank’s TechMatch programme, for instance, matches SMEs from different industries with technology companies to design solutions around their most pressing challenges. These solutions can range from low-cost enterprise resource planning systems to customised online sales platforms.

“The tightening (of foreign worker quotas) was a bit of a disappointment as labour issues are still a concern for SMEs in the services sector, but DBS and its partners will continue with efforts to help SMEs cope with the challenges ahead, from technological disruption to productivity issues,” said Ms Joyce Tee, group head of SME banking at DBS Bank.

Meanwhile, Neo Group’s upcoming hub, besides consolidating company operations, will also provide co-working kitchen and office spaces for lease to SMEs. “Many small-scale businesses with interesting concepts often find themselves between a rock and a hard place as they try to grow their business. This is mainly because the cost of setting up a licensed and fully equipped commercial-scale kitchen and office may not be a viable option,” said Mr Neo.

Businesses can also turn to their industry associations for assistance, said Mr Kurt Wee, President of ASME (Association of Small & Medium Enterprises) and Chairman of the SBF SME Committee. He noted that trade associations and chambers here will continue “to work with the F&B industry as a cluster to see how we can help them overcome this challenge.”

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