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Driving Cost from the Equation

Joseph M. Carbonara, Editor in Chief -- Foodservice Equipment and Supplies, 7/1/2008

Joseph M. Carbonara, Editor in Chief

One of my favorite T-shirts to wear around the house on weekends was a gift from a friend who visited the University of Maryland. It’s a simple red garment that features the university’s mascot, a terrapin, on the front flanked by the phrase “Fear the Turtle.” While folding laundry the other day, it dawned on me that if I were to make up a similar T-shirt for the foodservice industry, it would still prominently feature the turtle but the language would change slightly to read: “Fear Efficiency.”

I say this not to be controversial but as a challenge to the individual members of the foodservice industry, specifically the equipment and supplies segment. In researching this month’s feature article about the state of technology among trading partners, the consensus among the people I talked with was that the industry lags behind most others in terms of a willingness to adopt efficiencies it could realize by automating some practices to better streamline the flow of information.

“I think there’s a continuum. There have always been people who have shared information with their end-users but there are probably more in foodservice that don’t when compared to other industries I’ve been exposed to,” says Larry Moon, CEO of Lakeside Manufacturing in Milwaukee.

A primary reason for this lag centers on individual companies’ reluctance to change the way they go to market. “We’ve always been successful this way, so why change what we do now?” seems to be the rationale that rules the day when it comes to technology.

While that line of thought has served companies well for a period of time, it still fundamentally limits a business’s ability to grow and increase its profitability. And when you are dealing with a mature market where the products are known entities to all the trading partners like foodservice equipment and supplies, this applies all the more as pricing pressures continue to build.


“Traveling the road to becoming more efficient begins with embracing your reality.”
One of the easiest ways to help relieve the constant tension over price is to drive some efficiency into the system by auto-mating some of the steps. This allows for a better flow of information between trading partners and reduces the number of people on all sides of the equation that have to touch an order to process it. This notion may lack the sex appeal of introducing a shiny new product but it’s a concept that will help by increasing productivity among current employees and reducing the opportunity for error, which can be costly for all parties to address. “Automation and accuracy of information allow fewer touches,” Moon says. “It does not mean someone will be able to ship a product faster but you know where it is and that would help.”

Traveling the road to becoming more efficient begins with embracing your reality. “I think there’s a realization that dealers are going to have to come to at some point,” adds Brad Wasserstrom, vice president, The Wasserstrom Co., Columbus, Ohio. “Customers are always going to ask for a better price. Vendors are always going to have to try to push through a price increase. So, dealers will always be between the two.”

In driving this type of change business leaders must look beyond the economic climate of the day to examine the innerworkings of your organization. “I wouldlook at it as being independent of the cur-rent environment because a successful business is looking to drive efficiency in everything it does,” Moon adds. “If you don’t have a predisposition for continuous improvement, you may not see the opportunity. And that goes for both manufacturers and dealers. If you don’t see a way for that to be accomplished you don’t see a way.”

joseph.carbonara@reedbusiness.com

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