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National Restaurant Association - CEOs address importance of supply-chain management

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CEOs address importance of supply-chain management

Attending to increased food costs, sourcing of ingredients and traceability of products and providing quality assurance are paramount to a foodservice operation's success, CEO panelists at the National Restaurant Association's recent Supply Chain Management Executive Study Group Meeting said.

More than 145 restaurant operators and 70 foodservice brands attended the meeting, which was held in May at Chicago's InterContinental hotel.

David Parsley, senior vice president of supply chain management for Dallas-based casual-dining company Brinker International, kicked off the meeting by telling attendees how integral supply chain is to the entire foodservice industry, especially during tough economic times.

"When you are in a deep economic challenge, you had better manage your costs and make sure you change everything in the right place at the right time," he said. "That," he told attendees, "is critical to success."

The supply-chain veteran introduced the CEO panel, which featured renowned restaurant industry leaders Don Fox of 502-unit Jacksonville, Fla.-based Firehouse Subs, Carin Stutz of Deerfield, Mich.-based Cosi Inc., and Andrew Cherng, founder of Rosemead, Calif.-based Panda Restaurant Group, parent of the Panda Express gourmet Chinese chain, as well as George Hoffman, CEO of Restaurant Services Inc., supply chain manager for the Miami-based Burger King quick service chain.

Hoffman, a longtime member of the industry, recounted how the business has evolved over time saying, "The [supply chain] used to be a bunch of purchasing guys, but in the last several years it has grown a lot and become a full-fledged business. Today, you must have exactly all of the right products delivered to the right place at the restaurant establishment. Everyone recognizes that the supply chain management is imperative to the success of any brand."

Fox, who joined Firehouse Subs as director of franchising in 2003 and became CEO in 2009, told the group his criteria for restaurant/supply-chain success:
• the ability to maintain value position within the market place
• establishment of a commitment to supply chain uniformity in product, price and service
• having internal purchasing management capability, versus outsourcing; and
• selecting the right distribution partners

"The key for us was arriving at the decision that we had to blend our distribution costs, have good, transparent dialogue and that everyone would live up to what they said they were going to do," Fox said.

Cosi's Stutz explained to attendees that having a "world-class supply chain team [in place] is so important - especially in a global role."

Stutz, who joined the 134-unit Cosi last Jan. 1, added that she focuses on "continuity of supply" to ensure "food is always there when we need it," as well as food safety and security, and pricing and quality, which she asserted, "is, of course, very important to us."

With 1,453 units worldwide, Panda's Cherng said, "Our approach to business is to be fair and have the highest integrity with our suppliers. We are who we are inside and out."

He added that as his company expands globally it would explore deals with suppliers who trade there to avoid difficulties in shipping products through customs.

Because of that, he noted the company, which owns 98 percent of its stores, would begin exploring "the possibility of licensing and joint ventures" in order to "achieve quality and maintain its operational standards."

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