Tata Starbucks: Exploring challenges of a Quick Service Restaurant Supply Chain

In conversation with Dr Seema Narera, General Manager – Supply Chain at Tata Starbucks

Product sampling, contracting, ordering, receiving, storage, usage – all these are among the many facets of a Quick Service Restaurant (QSR) supply chain and each of these is a potential point where one could be throwing money down the drain.

But how does one really ascertain if a QSR supply chain is navigating in the right direction? After all, any brand’s centralised procurement team can hardly manage all these functions across locations. We approached Dr Seema Narera, General Manager – Supply Chain at Tata Starbucks, who happens to be a powerhouse of information, to have a better insight into a QSR supply chain. Here are the excerpts from the interview:

Q) What is the importance of lean supply chain management for eliminating waste and non-value added activities in a QSR supply chain?

QSR is a business of keeping your customers excited by offering them variety in food and beverages. Going trends, internet hypes and newer flavours keep customers excited. A QSR Supply chain needs to cater to its customer in that short period of time when that trend or fad is going on.

These trends change almost fortnightly with seasons, movie buzz, festivals, sports tournaments, sitcom seasons etc. Thus it is important that a QSR supply chain eliminates wastage and non-value adding activities to cut short the idea to execution timelines.

Q) India has an inadequate cold chain storage infrastructure. How important is it for QSR brands to maintain an optimum temperature to effectively maintain their supply chain?

A typical QSR SKU mix contains a considerable share of temperature controlled SKUs, be it chilled or frozen. In food items, it is difficult to maintain consistency across stores unless the products are centrally prepared and distributed in frozen forms.

Food products are very sensitive to temperature change and any variation in the temperature conditions can exponentially impact the product shelf life, taste and sensory feel. In India, there is an inadequate supply of reliable and organised cold storage and transportation infrastructure.

Traditionally, the pharma sector has been the biggest user of cold chains and thus the cold chain players tend to use pharma benchmarks in setting up processes and quality norms. Food handling, storage needs a different kind of processes and control mechanism due to the high sensitivity of the product. Indian cold chain industry has quite some distance to travel in that respect.

Q) How do you endeavour to strike the right balance between cost-effectiveness and agility while devising your supply chain?

The right balance between cost-effectiveness and responsiveness is the holy grail of supply chain. It’s a 2×2 matrix of demand volatility and business impact that one needs to play in. Depending on the SKUs or the categories, one needs to take a conscious call of improving responsiveness or cost-effectiveness.

Low Volatility – Low Impact: Should be done at lowest cost possible. Low Volatility – High Impact: Sweet Spot. Simple planning discipline is enough to keep cost under control. High Volatility – Low Impact: Should align the business to avoid taking risks in this category and let go of marginal gain at times. High Volatility – High Impact: Invest and spend on this category to improve serviceability.

Q) What are the latest trends and techniques employed in order to maintain a seamless QSR supply chain?

A QSR or for that matter any food product supply chain needs to be reliable on time, temperature and food safety. For reliability on time to connect, GPS tracking and geotagging are being used.

Through live GPS tracking, prior intimation and notification of ETA through SMS, emails are used to maintain seamless information flow through the value chain. For Temp reliability data logger and high-end, food tags are used. These devices can record and give an accurate history of the temperature condition maintained in the food container through its transit. For ensuring food safety, tamper proof packaging and sealing options are used extensively in last-mile deliveries.

Q) Recently, a BlockChain – powered marketplace was launched to maintain the traceability of Indian coffee. How do you think it will affect the Indian coffee supply chain?

The quality of a coffee cup is determined by the quality of bean, processing method, roasting profile and brewing method. To maintain a particular flavour of coffee, one needs to maintain consistency across all these legs of coffee processing.

The interesting part is that a cup of coffee that you drink might have grown at high altitudes of Indonesia, washed and processed in local villages, roasted in some part of India and ground and brewed at the store you are sitting. Having BlockChain powered marketplace with traceability will be very helpful in differentiating, verifying and showcasing high-quality coffees from other coffees.

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