Invisible micro-organisms on a produce shipment. An allegedly mistaken peanut butter sandwich order. A faulty electronic mechanism in a free kids toy.
Three cases of supply chain product problems akin to those which have actually happened at restaurants in the last year, ultimately triggering immeasurable levels of suffering and millions of dollars in damage claims from pending litigation which, in some cases, involve some of the world's biggest foodservice brands. It's the stuff that not only keeps restaurateurs up at night, but also managed to hold the rapt attention of several hundred restaurant leaders at last month's Fast Casual Executive Summit in Southern California.
In the highly interactive hour-long session, three executives from a trio of chains outlined how their companies are giving new priority to this element of their operations, which all said serves as a lynchpin to ensuring food safety, product quality, brand image, and ultimately, customer satisfaction.
Fazoli's Vice President of Supply Chain Blaine Adams joined Gloria Jean's Coffees President Brian Balconi and Focus Brands North America President Paul Damico to outline key lessons they've learned about the importance of supply chain in everything restaurants do and produce. From local sourcing, inventory management and overall chain growth, to brand and online reputation, all of these foodservice leaders agreed that successful, well integrated supply chain operations are central to every brand's long-term health.
What can be learned from the collective toil and experience of these astute entrepreneurs? Plenty. In fact, as a result of their discussion last month, we've compiled the following vital seven lessons for achieving supply chain heaven:
1. Give supply chain the operational respect its due and plan ahead: You never know when the market or other circumstances will demand quick response, according to Damico. He recalled a situation where his company recently learned of a prime opportunity for development in one Southern market. It was, he said, ideal for one of their brands. Unfortunately, the area was one where they simply couldn't figure out how to get product to the location as needed.
"The supply chain," he said, "wasn't there." Planning ahead for those types of eventualities might have made that and other "golden opportunities" possible.
2. Make operational safety Supply Chain Priority No. 1: Damico said contamination and supply chain problems like those that have waylaid brands like Chipotle over the last two years have given everyone working in foodservice a whole new urgency about food safety.
"Three years ago, we didn't have an internal compliance group," he said by way of example. "Now that's the biggest, fastest growing part of our company. … It's a No. 1 priority because now food safety is on the minds of consumers, … where it wasn't 18 months ago.
"But supply chain can't be an afterthought when you're putting together your management team. … Like I would bring on a supply chain executive before I'd bring on a social media executive because it's really the biggest part of anyone's business."
3. Strongly consider a third-party audit ahead of action: At many brands, part of keeping the supply chain within the high standards demanded by food safety regulations and other market preferences means third-party auditing has become an absolute necessity. The panelists said sometimes there is simply no other way to get an objective look at both current practices and problem spots.
For instance, Fazoli's found this integral to achieving the kind of overall food safety quality they are demanding in their operations.
"We've found (third-party auditing) is always good because it sheds light on areas that other approaches don't," said Adams. "So we use third-party auditing of supplies and parts of the supply chain."
4. Incorporate features that allow for supply chain scalability: This need and its importance in supply chain planning was highlighted when Balconi asked his fellow restaurant executives how they build all the intricacies and specifications currently necessary for supply chain management into the approach they take to their systems as a whole. He also was interested in finding out what brands are doing to meet the sometimes extremely challenging demands of international locations when it comes to supply chain.
"So how do you take that 5,000 miles away and ensure quality and consistency?" he asked.
Suggestions again reiterated the need for pre-planning and getting a good game plan going with operations inside the U.S. first, before tackling challenges like importing supplies, along with tariff costs, shelf-life issues and the specific tastes of each international location's population.
The group all agreed they had heard and even experienced plenty of "scary stories" in this realm, leading them to come to something of a consensus conclusion that foodservice chains must solve all current domestic supply chain issues before even considering locations abroad. Likewise, the restaurateurs all advised their colleagues in the audience that once international expansion is being considered, it was absolutely essential that executives actually go to the sites under consideration in person. As one of the panelists put it, "You just can't use Google for this."
5. Begin supply chain revamping with your brand's core ingredients: All agreed that ensuring the safety and quality of everything in your supply chain is an unwieldy subject with lots of moving parts to nail down. That's why the group recommended the best place to start this process is with the core ingredients of your brand. Not until every aspect of these central foods is secure and assured do they recommend their colleagues even begin to consider supply chain issues involving less central ingredients or even other facets of restaurant management, like image, design or marketing.
As Damico put it, "What are your core ingredients? What is core to your brand? Start with that and start with one store. Start there."
6. Incorporate clean labeling essentials into the process: As Adams puts it, "Consumers today demand ingredients that are local, natural, GMO-free," and a long list of other specifications. He said Fazoli's knows the importance of these consumer demands and has gotten "about 90 percent through the process … of removing artificial ingredients" from their products.
Part of that process he said is "gathering the troops and ensuring that everyone is (aligned) on maintaining the same quality of food across the system, so that when the food gets to the guest, it's as good as it can possibly be. … For us, our Alfredo sauce and desserts posed the biggest challenge here."
Adams even advocated doing a little research to determine exactly what customers define as "clean." In focus groups, Fazoli's learned that its customers defined "clean" as menu offerings with "no artificial sweeteners, no artificial flavors and no artificial colors."
7. Think outside of the standard storage box: Remember the problem Focus Brands had in the first item on this list in getting product to that one hot Southern market where they saw the opportunity for some great business? In the group's discussion around possible solutions that could have been pre-planned for that type of supply chain gap, one of the well-supported ideas involved brainstorming good alternatives for product storage that might be options in the future. For instance, would there be options for storage if they could source space with longer-term refrigeration or other specific demands of the brand's core ingredients?
The group advocated thinking about and identifying those types of possibilities and alternatives ahead of time in order to have a list of options that might make it possible to move on something that seems like the chance of a lifetime, despite challenges. The panelists all said ingredient and supply storage is one area where there are often quite an array of possibilities to meet an equal array of work-arounds. Successful brands, they said, consider those options and eventualities ahead of time to be prepared to move when opportunity knocks.
Award-winning veteran print and broadcast journalist, Shelly Whitehead, has spent most of the last 30 years reporting for TV and newspapers, including the former Kentucky and Cincinnati Post and a number of network news affiliates nationally. She brings her cumulative experience as a multimedia storyteller and video producer to the web-based pages of Pizzamarketplace.com and QSRweb.com after a lifelong “love affair” with reporting the stories behind the businesses that make our world go ‘round. Ms. Whitehead is driven to find and share news of the many professional passions people take to work with them every day in the pizza and quick-service restaurant industry. She is particularly interested in the growing role of sustainable agriculture and nutrition in food service worldwide and is always ready to move on great story ideas and news tips.