Paula Frank

In difficult economic times such as these, the best solution for managing one's supply chain might be to follow a model of collaboration. Although collaboration with fellow manufacturers might seem a bit extreme, its origin of thought can be traced back to one of the most famous foodservice chain founders: McDonald's Ray Kroc, who once said, “None of us is as good as all of us.” Many foodservice suppliers follow Kroc's well-known motto to this day, including McDonald's own bun manufacturers.

Why all the concern about managing the supply chain? Chicago-based ArrowStream, a provider of supply chain management and logistics solutions for the foodservice industry, announced the findings of its Market Outlook Survey, revealing the top economic concerns of chain restaurant operators for the second half of 2008. Survey responses were gathered from 12 senior-level managers of leading chain restaurants.

Though the survey was small, the results are significant. When asked to name the three greatest margin pressures they will face in the last half of 2008, the majority agreed on rising commodity prices, energy costs and the ability to maintain revenue and traffic growth. The top strategy cited by chain operators for easing pressure on margins to improve profitability was improving procurement processes and inventory control, according to ArrowStream. Tremendous savings reportedly can be achieved when members of the supply chain work together.

At the International Foodservice Manufacturers Association and the International Foodservice Distributors Association (IFMA/IFDA) President's Conference, a panel of leading manufacturers, distributors and operators addressed the challenges of supply chain collaboration. Chief among the challenges discussed was having trust in fellow manufacturers who might participate in the collaboration, as well as having the technology and support network to pursue the effort.

While disclosing confidentialities about one's business can be risky, mutual benefits can be gained by capitalizing on warehouse and distribution efficiencies. Only time will tell if supply chain collaboration becomes more mainstream, as bakers search for ways to reduce costs during tough economic times.