A Supply Chain for Today’s Foodservice Customer: Part 3
There’s nothing worse than buying a fresh sandwich at a convenience store, only to bite into wilted tomatoes and soggy lettuce. Consumers who have had this experience are hesitant to buy fresh sandwiches again—especially from the same store. In my previous blog posts, I explained that today’s consumers want fresh food options and that they are spending differently to get it. Now it’s time to answer what this means for your foodservice supply chain. Because of the demand for convenient, fresh foods and the shorter shelf life that comes with it, supply chains need to be quicker to respond and faster to replenish. We’re starting to see stores with once a week food deliveries that have been changing to five or even seven deliveries a week—some stores even have twice a day deliveries on certain items. I’m going to use a convenience store example throughout this post, but the principles are pretty similar for other areas of the foodservice industry as well. Your foodservice supply chain’s technology, logistics, and distribution are three critical aspects that all need to work in harmony if you’re going be successful with shorter shelf life and more frequent deliveries. Technology Having a high level point of sale (POS) system that ties into both your inventory and replenishment processes is ideal. When your in-store inventory of fresh sandwiches reaches the replenishment point, a delivery can be automatically triggered by the system rather than an employee count or estimate. This keeps things moving quickly and, when correctly calibrated, can prevent out of stocks. Logistics With faster replenishment and more frequent deliveries, the location of your inventory becomes significantly more important. If suppliers are two hours away, that’s probably manageable. But two days away is another story; at that distance you’re adding a lot of stress on your logistics. This does not necessarily mean you need to get new suppliers, but it may mean you want to find a great logistics provider who has solid relationships with your suppliers and experience with perishable less than truckload (LTL) shipments. Distribution Distribution models are rapidly advancing. We’re seeing more high frequency, high touch distribution models than ever before. The most successful distributors can take an order at midnight and deliver to your location by the early hours of the morning. Distributors are also taking more responsibility for other aspects beyond just making the delivery. Merchandising—the rotation of old merchandise out and placing new merchandise—is something that used to be handled by the store itself, but is now being handled by the driver who delivers the goods. This new distribution model sometimes requires a capital investment in the form of equipment (e.g., short bed trucks with liftgates), as well as the education of drivers (e.g., rotation training). It’s safe to say that over the next decade, we’re going to see a drastic change in how foodservice supply chains for fresh, convenience items are handled. We all understand that providing what the customer demands is key to a successful business, but how you get those products to your store shelves is also part of the equation—and when it comes to fresh items, it’s a big part of the equation.