Increasing Supply Chain Effectiveness with Org Design
The client is a popular franchised fast-food restaurant with locations across the country and around the world. They are known for their focus on high-quality, ethically sourced ingredients.
At their inception, the company had developed a supply chain company that provided purchasing, pricing, inventory management, and distribution activities. As our client expanded internationally, the supply chain company was not able to expand to support new markets. As market competition increased and the economy weakened, franchise owners struggled. To drive sales, the company increased promotions and added menu items that lacked a market-driven business strategy. Franchise owners grew frustrated, consumer sales continued to slide, and store closures accelerated. Suppliers and distributors struggled to partner due to the financial impacts of these business changes. The franchisor and supply chain executive team transitioned, and a food co-op was asked to provide staff augmentation services during the transition.
We worked in close partnership with the client to analyze the risk/cost management strategy, determine supply chain effectiveness, and evaluate whether a partnership between the co-op and the supply chain entity would be viable. This evaluation included a comprehensive review of all its supply chain activities, internal processes, standard operating procedures, infrastructure costs, organizational structure, KPI structure, and current staffing models to determined if they were sufficient to support the organization long-term.
We provided two organizational redesign options, each offering strong opportunity for savings. The selected re-design had a projected first-year savings of $644,562 with an additional $157,000 savings available during the year as positions were phased out. The client realized those savings in full in the first year of implementation.