QSR Ensures Supply for a Limited-Time-Offer Featuring a Fresh Produce Item with Help from HAVIA quick service restaurant (QSR) chain responded to consumer demand for healthy food options by offering a popular branded fresh produce item. HAVI conducted comprehensive demand, logistics, contingency, fulfillment planning and oversaw promotions and supply chain management of the unique limited time offer (LTO).

CASE STUDY FOCUS: ADVANCED PLANNING

Challenge

A leading QSR planned a national LTO featuring a fresh produce item from a well-known brand that resonated with the QSR’s target audience. Procuring the produce and ensuring supply in restaurants would be a challenge for several reasons: The produce was only available from a single-sourced supplier location. The produce was picked, packed and shipped whole (no peeling or cutting) with minimal processing (no preservatives) and had a short shelf life from time of harvest. The LTO took place during the winter, presenting additional risk in the form of potential weather impacts on harvest, transportation and supply. As a result, it was imperative that the QSR chain have contingency plans in place to respond to the different scenarios that might affect supply.

Solution

The QSR sought help from HAVI experts who conducted an in-depth logistics analysis and considered the routes and distance from the supplier to each of the QSR’s regional hubs, distribution centers (DC) and restaurants to ensure fresh product would continually be moving throughout the network and to maximize the shelf life for replenishment of product. By leveraging multi-stop DC-direct deliveries, HAVI was able to help the QSR reduce the number of weekly truck loads by more than 25 percent.

Supply chain and promotions management experts also considered different demand scenarios and ways to respond to assure supply and reduce obsolescence. They considered how long a product would last if demand was high and if the QSR could sell extra product to a third party if demand was low.

Additionally, HAVI developed responses to potential disruptions in supply resulting from production issues (lack of harvest, damaged produce), shelf life and weather impacts that could impede on-time delivery of product to restaurants.

During a shipping test, HAVI determined that higher count case packs were prone to shifting and could tip over in transit, which would result in damaged product. By reducing the case pack by 50 percent, HAVI eliminated this risk and also helped mitigate the potential for obsolescence due to the product’s short shelf life (smaller case packs meant quicker consumption of produce and less time for it to sit in restaurants).

Because HAVI experts immersed themselves in the QSR’s supply network, they understood the intricacies of the system and could determine how long it would take to stop and start the system in the event of a disruption in supply. HAVI also established a process to quickly communicate the disruption across the supply chain to supplier, hubs, DCs and restaurants that could easily and effectively be replicated by all parties. In addition, HAVI identified and planned for a replacement product, to ensure the consumers always had an alternate product available in the case where there may have been a disruption in supply.

The QSR’s position has always been no breaks in supply so becoming comfortable with the potential for disruption in supply was a challenge, but necessary given the inherent risks of the product as a single-source branded fresh item subject to weather and environmental impacts beyond anyone’s control. HAVI’s understanding of the QSR chain’s system, comprehensive testing and contingency planning, collaborative relationship with the supplier and ongoing communication helped reassure the QSR and enable successful order fulfillment throughout the duration of the LTO.

ADVANCED PLANNING

QSR Ensures Supply for a Limited-Time-Offer Featuring a Fresh Produce Item with Help from HAVI

Benefits

• Successfulorderfulfillment– Despite the high risk for disruptions in supply due to the limitations of the produce item (e.g. a specific brand, only one supplier, subject to weather impacts, etc.), HAVI’s comprehensive demand, fulfillment and logistics planning and ongoing communication with partners along the supply chain safeguarded against breaks in supply and enabled 100 percent order fulfillment.

• First-of-its-kindoffering– HAVI reduced freight costs by leveraging multi-stop deliveries to DCs and reducing weekly truckloads by more than 25 percent. HAVI also established alternative lines of supply to reduce delivery time for expedited shipping.

• Costsavings– HAVI enabled the QSR to deliver against its promotional calendar, maintain its reputation for assured supply across thousands of U.S. restaurant locations and deliver on its promise to provide premium giveaways to its customers.

• Solidsalesresults– The popular branded item resonated with the QSR’s target audience and sales tracked above the most-likely forecast for the majority of the promotional period; sales volatility did not affect the overall average sales of the product.

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©Copyright 2016 HAVI. Produced in the United States of America July 2016. All rights reserved.

HAVI is a global, privately owned company focused on innovating, optimizing and managing the supply chains of leading brands. Offering services in supply chain management, packaging, logistics and recycling & waste, HAVI partners with companies to address challenges big and small across the supply chain, from commodity to customer. Founded in 1974, HAVI employs more than 9,000 people and serves customers in more than 100 countries. HAVI’s supply chain services are complemented by the customer engagement services offered by our affiliated company The Marketing Store. For more information, please visit HAVI.com.