Not all supply chains are created equal and that’s certainly true when it comes to the fresh food supply chain. There are a lot of unique considerations in the overall procurement-to-delivery process, everything from temperature control to ensuring food safety. So, what does it take to improve operational effectiveness and reduce total landed costs in the fresh food supply chain?
“Let’s say you go into your local quickserve restaurant and you order a fruit cup,” said Bernitt. “What you don’t think about is all of the inputs that it takes to execute on that fruit cup. In a quickserve environment where [a restaurant chain] might have maybe 2,000 locations across the country, they’re serving 20,000 to 30,000 fruit cups per day. It’s a very complex supply chain, very complex execution points just to deliver on that fruit cup because there might be 4 to 5 different items in that cup, and those items can come from all the way around the globe, and they have to get harvested and picked at just the right time, at just the right place, and then that product has to get into the supply chain to serve to you.”
As you might expect, achieving end-to-end supply chain visibility is a big challenge. Suppliers, whether they’re growers or manufacturers, are spread out all over the world, and the food items get harvested or produced at different times of the year at each location, which adds to the complexity. The items then have to get transported, which requires compliance with temperature control specifications and food safety regulations, and then the items go through various distribution channels to reach the restaurants and retailers.
“This is a very multi-layered supply chain with a lot of embedded costs,” added Berniit. “All of these complexities lead to a lack of visibility and collaboration across the supply chain.”
I asked Todd, if you had to boil down the critical factors or attributes that define a best-in-class procurement-to-delivery operation, what would those factors be?
“It’s looking and ensuring that you have the right people, processes, and technology to be able to execute on these types of supply chains and be able to manage all of the complexities around the globe that happen at both the micro and macro level,” said Bernitt.
He then expanded on each of those attributes:
People: “You need vertical experts in your industry that know your commodities…They need to execute the [strategies you define] every day.”
Processes: “With all of the layers of government regulations, food safety acts, and all of the temperature control requirements that are involved, you have to ensure you have the right processes in place [and execute them consistently and reliably].
Technology: “You need an all-encompassing purchase order management system that can aggregate orders all the way from individual store and restaurant locations, back through distribution, so that you can tender orders back to suppliers…Our customers want real-time data so they can make faster, more accurate supply chain decisions.”
I encourage you to watch the rest of my conversation with Todd for additional insights and advice on this topic, including the role and importance of visibility and data analysis. Then post a question or comment and keep the conversation going.
And the next time you order a fruit cup, before you dip your spoon in to scoop up some fresh strawberries, blueberries, and grapes, take a moment and think about all of the people, processes, and technologies it took for you to take that first delicious bite.