Foodservice supply chain chases £450m opportunity

Collaboration between food manufacturers and caterers to drag the foodservice supply chain into the 21st century is starting to bear fruit after a three-year drive to improve electronic communications.

Launched in January 2002, the Optimum Foodservice Supply Chain Initiative (OFSCI) -- a trade body comprising caterers, manufacturers and distributors -- has now developed an electronic database of more than 350,000 products from 2,000 suppliers. It has also agreed standards for the electronic exchange of documents such as purchase orders and invoices.

Standards have also been developed for describing dietary and allergen information, said Paul Heathcote, managing consultant to OFSCI: "The joke going round is that now foodservice is only 15 years behind the supermarkets when it comes to b-2-b collaboration in the supply chain -- instead of a few decades.

"Basically, the problem was a lack of standards -- on everything from product dimensions and weights, to whether products contain peanuts. Shoddy data is a primary cause of out of stocks, invoice disputes, supply chain glitches and delays in getting new products to market. Sort it out and we could save £450m."

The product database and new line introduction forms -- supplied by data normalisation expert Udex, present data from manufacturers in a consistent way to customers, meaning that they only have to publish data once, rather than in a multitude of ways for different trading partners, said Heathcote.

Clean data will underpin other supply chain initiatives from collaborative planning to RFID, he added. "The next step is sharing more stock and forecasting information between trading partners. But this is complicated by the fact that in the foodservice supply chain, the end customer is not a chain of a few hundred stores supplying up-to-date electronic point of sales (EPoS) data, but thousands of catering outlets that may not supply any data at all."

Pilots are now underway with large companies such as Unilever and 3663 plus smaller players such as Olives et al, which is working with Mitchells and Butler, he said. "It started with suppliers saying, 'I can get detailed data from retailers, why can't I get it from foodservice customers?' It's early days, but we are chasing a multi-million pound opportunity."

OFSCI members include Compass, 3663, Brakes, Britvic, Coors Brewers, Masterfoods, Kraft Foods, Milk Link, The Federation of Wholesale Distributors and the British Frozen Food Federation.