Radical overhaul needed for foodservice supply chain

By Elaine Watson

- Last updated on GMT

Related tags: Cost, Retailing

The British Frozen Food Federation (BFFF) has commissioned new research to explore ways of reducing costs in the distribution leg between frozen food...

The British Frozen Food Federation (BFFF) has commissioned new research to explore ways of reducing costs in the distribution leg between frozen food suppliers and wholesalers in the foodservice sector.

The BFFF set up two working groups in the spring to look at the efficiency of the frozen food supply chain in foodservice and retail.

After initial meetings, it rapidly became clear that a radical restructuring of the primary distribution leg in the frozen foodservice supply chain was needed, says Alf Carr, BFFF director general.

He adds: “There are several initiatives already in place to tackle issues of data standards in communication and labelling in foodservice, for example the OFSCI project (optimum foodservice supply chain initiative) and the introduction of guidelines for outer case labelling. However, transport is still a problem because of the sheer diversity of the sector. There are so many small loads, which makes distribution grossly expensive and inefficient.

“On the plus side, this means that there are huge potential opportunities for cost saving.”

brainstorming

The BFFF foodservice supply chain working group first met in late May for a brainstorming session, he says.

“The upshot of that was that we are commissioning some research into how to tackle these efficiency problems. This should be completed within three months.”

While large foodservice companies such as Brakes and 3663 have sophisticated consolidation networks, many wholesalers’ depots are still clogged up with scores of trucks making deliveries of less than one pallet at a time, says Carr.

Leading retailers have tried to address this problem through developing a series of primary consolidation centres so that their depots do not get clogged up with vehicles making tiny deliveries.

The supermarkets have also spearheaded initiatives such as factory gate pricing and backhauling in a bid to better utilise vehicles and secure better terms from suppliers.

a different model

However, simply dropping the retail model on to the foodservice sector would not necessarily work, he claims. “There aren’t that many factory gate collections in the frozen foodservice trade for example. The quantities are so small that even the big wholesalers have steered clear.

“The research will give us a clearer picture of how primary distribution currently works in frozen foodservice and how inefficiencies might be tackled.”

Meanwhile, the BFFF’s retail supply chain group is facing slightly different challenges, he says: “One of the problems has been that some of the more modern vehicles are struggling to make deliveries to some retailers’ regional distribution centres because the entrances are not high enough.”

Related topics: Supply Chain, IT, Services

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