Supply chain management: Food service shippers partner like never before
Patrick Burnson, Executive Editor -- Logistics Management, 2/26/2008
PHOENIX—An economic free fall is ushering in a new era of collaboration between manufacturers and distributors, said leading business leaders at the Intlernational Foodservice Manufacturers Association’s annual Chain Operator's Exchange (COEX) meeting this week.
“We have dealt with a slump in consumer spending before,” said Tad Wampfler, senior vice president of supply chain management for Wendy’s International, Inc. “But couple that with the rise of petroleum and grain, and you reach a real crisis.”
For Wampfler and other Fortune 500 executives attending the meeting, that means finding new ways of doing business.
“Transparency and efficiency will be key components of any new supply chain models we put together for ’08,” he said. “That means sharing our database and freight contracts with our distributors in an effort to save costs for both parties.”
The COEX show, which draws more than 600 industry professionals, is recognized as a premier educational forum for chain restaurant operators. According to Wampfler, food inflation had been pegged at two percent per annum for the past several years. The current depressed economic cycle, however, has moved that number up to seven percent, where it may remain for some time to come.
“The only way to soften that blow is to make sure every truckload is full and to minimize their turns,” he said. “We are also working to determine if inbound freight costs can be mitigated by offloading at more deconsolidation centers.”
Wampfler also observed that migrating from motor carrier to rail might be an option explored by Wendy’s.
“It’s all about having the manufacturers talk to the distributors and the operators,” he said. “The best and brightest minds in the industry are trying to find solutions that can be implemented in a long-term sustainable strategy.”
To that end, he said, Wendy’s is among several major players outsourcing the logistics function to Chicago-based Arrowstream, a supply chain applications and services vendor utilizing “Limited Time Offer” (LTO) strategies.
Spokesmen for Arrowstream said that LTO is being embraced by several other industry giants, including SYGMA, Nice-Pak Products, Ben E. Keith Foods, Applebee's, and Arby's.
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