Post on 03-Jan-2016
Presented by: Glen Combe
Date: 20th January 2009
‘Beating Food Inflation without compromising quality or brand’Insight into the role e-procurement can play in keeping costs down without sacrificing brand standards or quality.
Who are iTradeNetwork?
2002 Launched in the UK as mymarket.come-Procurement portal for Foodservice in the UK
2006 Rebranded as Makella
2007 Acquired by Amphire Inc.Global provider of SaaS solutions to the foodservice industry
2008 Acquired barbox.comUK’s leading e-procurement portal for the licensed trade
2008 Merged with ITN$229bn of orders handled every yearWorlds largest procurement management systems company within hospitality
•e-Sourcing•e-Procurement•Rebate Management•Spend Intelligence
•Reduction of supply chain costs•Increased revenue•Improved compliance•Improved trading partner relationships
Category Management Approach to Cost Reduction
Range Management
Menu Reviews
Aggregation
Collaboration
Dynamic Procurement
GP ManagementGoods receivingInvoice validationStorage & handlingStock & wastage managementMeal preparation
Performance visibility
Situation Analysis - Where are we today?
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Bread andcereals
Meat Fish Milk, cheeseand eggs
Oils and fats Fruit Vegetablesincluding
potatoes andtubers
Sugar, jam,syrups,
chocolate andconfectionery
Food productsnec2
Coffee, teaand cocoa
Mineralwaters, softdrinks and
juices
Yo
Y %
ag
e C
ha
ng
e
Situation Analysis - Where are we today and in the future?
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
Jan
06, 2
006
Mar
03,
200
6
May
05,
200
6
Jul 0
7, 2
006
Sep
01,
200
6
Nov
03,
200
6
Jan
05, 2
007
Mar
02,
200
7
May
04,
200
7
Jul 0
6, 2
007
Sep
07,
200
7
Nov
02,
200
7
Jan
04, 2
008
Mar
07,
200
8
May
02,
200
8
Jul 0
4, 2
008
Sep
05,
200
8
Nov
07,
200
8
Jan
02, 2
009
Mar
06,
200
9
May
01,
200
9
Jul 0
3, 2
009
Sep
04,
200
9
Nov
06,
200
9
Jan
01, 2
010
Mar
05,
201
0
May
07,
201
0
Jul 0
2, 2
010
Sep
03,
201
0
Nov
05,
201
0
Jan
07, 2
011
Mar
04,
201
1
May
06,
201
1
Jul 0
1, 2
011
Sep
02,
201
1
Nov
04,
201
1
Jan
06, 2
012
Mar
02,
201
2
May
04,
201
2
Jul 0
6, 2
012
Sep
07,
201
2
Nov
02,
201
2
Weekly All Countries Spot Price FOB Weighted by Estimated Export Volume (Dollars per Barrel)
ICE Brent Crude Futures (Dollars Per Barrel)
NYMEX Sweet Light Crude Oil Futures (Dollars per Barrel)
1. Staff must take 25 percent less wages
2. We must have no guests
3. No casual entertaining, theatres or outings for pleasure; No taxis; Only third class travelling
4. No wines, spirits or cigars
5. Not one single new article of clothing for at least a year
6. No newspapers except The Times and one feminine weekly
7. If any golf, no caddies
8. No Christmas, birthday or wedding presents
9. Rigid economy in food; no soups, entrees, sweets (crystallized fruits, &c.), or fruit, beyond what is thought necessary for health, except from our own garden; only joints, plain puddings, and simplest food
10.Strict economy in coal, gas and electric light.
The Times, February 3rd 1916
Supplier Cost Base
Re-tender
Margin
Variable Costs
Fixed Costs
Incurred by your suppliers when you place a purchase order, e.g. raw materials
Does not vary in relation to volume sold, e.g. overheads
Case Study
Who?•Multi brand client with annual food spend of £6m•Mixed skill levels across the operating units
Why?•Reduce food costs and the cost of purchasing service provision• Improve visibility•Straightforward ROI model• Improve consistency of brand standard implementation
What?•Change in purchasing service provider•Acceptance of change•Mitigation of 11.36% inflation
•GP Improvement of 0.97% on food purchases, total saving of £568k per annum
•Service fee saving over £150k per annum
• Improved communication, training and operational support to units and more consistent delivery of brand standards
How is the £718k pa made up?
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Service Cost Saving
Range Management
Aggregation
Collaboration
GP Management
By taking positive action one operator has managed to avoid the impact of rising food costs being felt so widely across the industry.
What is stopping you from doing the same?
Absolutely nothing!