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operations 2014-11-13

How is supply chain helpful in expansion of a brand?

The restaurateurs sign a deal with the vendors where they maintain certain preferences for quality fruits and vegetables that they use in their outlets.

By Deputy Features Editor
How is supply chain helpful in expansion of a brand?

Supply chain is the most important part of a restaurant business. Sourcing the right produce to make the best quality ingredient is a major challenge for restaurant industry. To reduce all these problems and effectively expand the business, restaurant and food majors in the country are betting high on the local suppliers as well as on the importers to expand their business successfully.

A robust process

Restaurant and the food brands have tied ups with local vendors and suppliers in their respective space, to effectively run their business. Major brands like Subway, Domino’s and Mainland China are amongst those who have signed a contract with the local and the international suppliers, to get the freshly sourced products and ingredients on time.

Not only this, the growth of the food services market has led to a centralised procurement system by national as well as international brands. Backed by a strong supply chain network, these major brands are running the process smoothly. Pabrai’s, which claims to offer 100 per cent natural ice creams, has tied up with both local as well as international suppliers to get the quality ingredients from diverse locations.

“We source the ingredients from all corners of the world. We are sourcing fruits from all corners of India. We import vanilla from Madagascar, wasabi and macha green from Japan, chocolates from signature houses across the globe. We also make naturally processed cocoa, which is the richest form of cocoa. So, the entire world is open for us, in terms of sourcing of the ingredients,” says Kunal Pabrai, Partner, Pabrai’s Fresh & Naturelle.

On the other hand, many restaurateurs believe that tying up with a same vendor for few years also helps in an effective supply chain process. The restaurateurs sign a deal with the vendors where they maintain certain preferences for quality fruits and vegetables that they use in their outlets.

“We are dealing with one reliable vendor from past five years. During the initial phase, we faced certain challenges, but we experimented with our business model and now we have the same vendor who supplies fresh fruits to all our outlets in Mumbai,” shares Hemaang Bhhatt, Director, Has Juice Bar.

Major players

Domino’s has been ranked as one of the largest pizza manufacturers in India for maintaining its product quality, freshness, taste and efficient supply chain network. The pizza chain follows an efficient outsourcing model, which helps the brand to ensure quality while maintaining the food cost low.

Domino’s Pizza follows an operational model and has outsourced most of its operations from procurement to logistics and distribution to its local India partners. It has a vertically integrated supply chain system with automatic delivery of raw materials. The centralised procurement system, which procures raw materials from Punjab and distributes it to four commissaries, helps Domino’s maintain increased focus on customers. This entire distribution is managed through refrigerated trucks.

Likewise, Subway and Krispy Kreme have tied up with local vendors with the help of its logistics and distribution partner, to use fresh ingredients in their regular menu.

Akhil Puri, the man behind the effective supply chain process, is introducing the Sbarro Pizza in north Indian market and is planning to leverage the networks of the suppliers for the existing brands.

“We are in the supply chain space for eight years now and we distribute products across 130 cities rightnow. So, we have a network where we can source the product locally to maintain freshness of handmade pizzas of Sbarro,” notes Puri.

Hence, supply chain which is never known to the masses in general and is managed on the backend, is the most powerful vehicle in expansion of a brand. To bring out the best flavours in the food, the focus on sourcing the best ingredients available, is the right mantra for running a successful business. Besides this, restaurateurs use best practices implemented internationally in establishments around the world in terms of food production, preparation and storage.  

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