Leading restaurant chain navigates changing QSR industry challenges
Each day, consumers worldwide place an order at this leading quick-service restaurant. The company proudly serves millions of people a multitude of products across thousands of global retail locations, offering dozens of different specialty beverages, merchandise, fresh food and more.
Through an enormously complex supply chain, the organization strives to serve great products to its customers quickly and efficiently. That’s why it partnered with NTT DATA to refine its well-established supply chain distribution network and meet future demand to plan for growth.
Business Needs
As a quick-service restaurant chain (QSR), the company experienced several challenges affecting the industry and creating a dramatic change in operational focus for QSRs and their supply chains. Opportunities for improvement included tapping regional and local suppliers for fresh, farm-to-table ingredients. And to maintain effective and efficient growth, they could employ core analytics capabilities to adjust as needed, adapting to new consumer requirements and demands.
The ideal solution was a multi-channel approach to optimize retail operations.
Maintaining an operation of this magnitude required a strong operational network. Constant re-evaluation and restructuring must be conducted to meet capacity demands. In order to facilitate a robust distribution and network strategy, the company partnered with NTT DATA’s supply chain experts and proprietary methodology to determine the best plan of action.
Outcomes
- Improves fulfillment responsiveness
- Optimizes territory assignments
- Enables volume growth
- Supports expanded product offerings
- Mitigates rising costs and risks
This massive and highly complex transformation will allow the company to become best in class for service and fulfillment while significantly lowering costs so millions of customers can continue to receive the products they love at affordable prices.
Solution
Redesigning the supply chain
To support its dramatic growth, the QSR giant needed to design a supply chain network that enabled its continued journey toward a vastly broader market proposition, which includes fast and fresh food offerings and fortified establishment in grocery and CPG channels. Its distribution breadth, projected volume growth and anticipated levels of operation scale introduce new complex challenges that require a proactive business plan.
An assessment of the technology needed to support the supply chain initiatives was a crucial element to designing an optimal network. Teaming with the company’s seasoned group of supply chain professionals, NTT DATA assisted with the development of a network design strategy, a go-forward plan, 3PL utilization strategies, technology implementation initiatives and an overall transformation roadmap.
The foundation of such a supply chain transformation was a network analysis of the organization’s existing infrastructure. To meet the needs of continued growth, the teams created a “fit for purpose” network design that sought to improve fulfillment responsiveness while avoiding added costs, optimizing territory assignments and increasing the number of regional and local distribution centres.
The redesigned network plan enabled volume growth, supported expanded product offerings, and mitigated rising costs and risks. Once implemented, retail responsiveness would improve by enabling increased delivery frequency while alleviating capacity pressure that would negatively impact service levels and cost-to-serve. By first optimizing for prior growth, the company could invest into transformation strategy that can enable additional growth for years to come.
Rebalancing a strategy
To ensure the network remains highly efficient, a review and re-balance strategy was incorporated to revisit the model periodically and support new growth and service objectives of the dynamic business. To position the organization for a successful transformation, the team provided a strategic roadmap that included executive meetings to develop organizational alignment. NTT DATA also used a unique scoring of critical business metrics to determine which project elements should receive higher priority in the implementation sequence.
Finally, teams presented the leadership committee with the strategic roadmap as well as a governance program to assist with the development of a transformation office that would be 100% focused on the project. The roadmap required an experienced, full-time, committed leader to maintain continuity in the delivery of the multi-year program. They recommended structured team approach with a charter, project plan, work-stream schedules and a communication plan to ensure all aspects of the transformation were transparent and fluid.
A new vision
NTT DATA recommended success metrics and established a progress dashboard for advanced project measurement and status updates. Finally, teams expressed the importance of executive sponsorship across the business units as well as total commitment from the organization’s top leadership and the willingness to be coached on change management. This massive and highly complex transformation will allow the company to achieve best-in-class service and fulfillment while significantly lowering costs so millions of customers can continue to receive the products they love at affordable prices.
About This Case Study
A popular quick-service restaurant chain transforms its supply chain network to meet changing demands and support growth.