In recent times, the fast-food and/or QSR sector has witnessed remarkable expansion and global acclaim, resulting in a fiercely competitive market focused on swiftness, effectiveness, and customer contentment. Behind the scenes, a sophisticated and intricate supply chain functions flawlessly, guaranteeing prompt delivery of fresh components, upholding product excellence, and satisfying consumer needs. Having extensive experience in overseeing supply chains with comparable characteristics, Dipit Sharma, Head of Supply Chain at Burger King India, provides us with a deeper comprehension of the complex and intricate supply chain within the fast-food sector. During an interview with Logistics Insider, he imparts valuable perspectives on the distinct challenges and tactics employed in effectively managing stock, forecasting consumer demand, cultivating supplier alliances, embracing sustainable methodologies, and navigating potential economic downturns. Edited excerpts:
Having been part of the fast-food supply chain industry, where the shelf life of items is low, keeping an eye on the inventory, both in terms of quantity and quality across outlets is a hassle in itself. How can one hit the bull’s eye when it comes to managing the inventory of a fast-food supply chain and meeting consumer demand?
Robust S&OP process is the key. The type of items we handle necessitates constant vigilance. On one hand, there’s the risk of expiration, while on the other, there’s the possibility of running out of stock. This is further aggravated by single source dependency and long lead times in some of the ingredients (IP) Achieving optimal management or hitting the target spoton can only be accomplished through agility and adaptability. Staying ahead of demand and ensuring that store-derived demand is monitored in real time is crucial.
The unique challenge we encounter, unlike any other industry, is the near-impossibility of predicting consumer demand and behaviour in the fast-food supply chain. The only viable approach is to examine historical patterns and assess past events that have or are likely to impact demand. We must incorporate events like Christmas, weekends, Diwali, Navratras, shravan, etc., and historical patterns into our planning process, remaining flexible enough to adjust demand and supply patterns as needed.
The demand for products in the fast food industry is directly proportional to the consumers’ mood. The industry is highly saturated and fiercely competitive, making the tracking of demand signals a tricky job. What methods can one deploy to not only strike the right balance between demand and supply but also evolve to stay relevant by reading the demand signals from the consumers?
As previously stated, it is crucial to remain vigilant and responsive when it comes to addressing the demand within the fastfood supply chain. Additionally, leveraging analytics tools can greatly assist in forecasting and maintaining a balanced demand-supply equation. Enterprise Resource Planning (ERP) stands as one of the widely adopted tools within the fast-food industry, facilitating process automation, comprehensive business management, and invaluable insights to effectively tackle demand. By utilizing such tools, businesses can streamline their operations, make informed decisions, and successfully navigate the complexities of the fast-food supply chain. Supply chain ‘collaboration’ and ‘partnerships’ have never been more centred than they are today. But, with whatever little knowledge I have about the fast-food industry, the two terms have been embedded in the core of any fast-food supply chain.
Can you highlight the importance of a good and strong supplier partnership in writing the success of a fast-food brand?
Supplier partnerships are crucially important, particularly for the fast-food sector. In our industry, survival depends on two factors: delivering value to customers, not just in terms of prices but also in perceived worth, and fostering innovation. Customers quickly tire of consuming the same basic products, so it is essential to constantly revamp our offerings while maintaining their value. To achieve this, we rely on strong supplier partnerships. These partners play a vital role in designing products tailored to customer needs. A good supplier enables fast-food brands to uphold product quality and value while providing insights into the global market and changing consumer consumption patterns. Additionally, a dependable supplier partnership brings value and innovation without compromising efficiency or cost.
This is an abridged version of the interview published in the July edition of the Logistics Insider Magazine. To read the complete interview, click here.