Today’s foodservice chain C.P.O. or
Vice President of Purchasing's role has changed and will continue to change as
a reaction to spend management challenges and shipment problems that were once
considered the responsibility of broadline distributors. The new buzz in supply planning A.T.D. (advanced
transportation decisions) challenges the foodservice chain buying staff to
outthink the supplier’s limited L/TL delivery strategy and find work arounds
for the distributors risk adverse philosophy of can't “go the extra
mile”.
The tactical decision to manage around or through these distribution
roadblocks means more time must be spent managing the order fulfillment and
transportation process. The immediate
benefit is fewer hurried reactions when “ new products are approved, and
purchasing finds out during the screening of the new marketing ad” Sure,
the F.O.B. price is great – the product rocks, but now purchasing is faced
getting the product produced and delivered.
In our consulting assignments, we often see the adverse effect on profits,
when menu decisions are made and procurement is not involved. This happens
quite often when purchasing reports to the culinary department or the Chief
Development Officer, instead of the CFO or President. A recent example of the problem; many fast
casual burger and wing restaurant chains are changing from frozen to fresh
products without considering the readiness of their supply-chain. Many
non-purchasing executives actually think that all products are in stock at
every broad liner warehouse! The
shelf life and handling requirements alone for fresh wings and burgers can
be a challenge, especially if the product is single sourced and ships from one
plant. The distribution system for
custom and fresh products requires faster reaction time, and better
cost-service efficiency levels; such as; smarter routes, plant (location)
selection, carrier time-temp recording, and better receiving location inventory
management, not to mention educated operations managers.
Foodservice broadline distribution is a threat to procurement success when
procurement sees logistics as the sole responsibility of the distributor. The coming 2012 transportation crisis,
partially caused by high-fuel costs and the distributor limited resources, will
impact cost and availability of food and suppliers sourced and transported more
than a few hundred miles.
You have seen (or will shortly) the symptoms of the problem. You
are encouraged to seek non-traditional solutions, such as approving multiple
suppliers, local sourcing and the planned use of re-distribution services. Planning for the future of transportation in
foodservice can start with tapping the knowledge of the distribution-logistics
team that you already have on payroll; your primary distributor, suppliers and
re-distribution company used by your distributor.
Why not schedule your own distribution-logistics forum to analyze current
and future warehouse and transportation configurations for your business. Developing the best vendor sourcing,
transportation and warehousing scenarios may not be sexy, but it can be
profitable!
Fred Favole is Founder &
President of the longest operating foodservice purchasing consulting firm in
the industry, Strategic Purchasing Services (SPS). Follow Fred’s Blog https://purchasinginsights@blogspot.com. His contact information: E-mail: SPS@Gate.net
