Last year I got up on my soap box and wrote an article entitled "A Climate of Denial." The article discussed how the foodservice equipment industry's business model changed to one where everyone buys direct thus destroying or eliminating entire channels of distribution. For years I have written articles for publications and never received a response like this: 254 emails or phone calls. And these calls and letters weren't to touch base but to share opinions.
Some wrote to defend their approach as being highly calculated and appropriate given the conditions of the day. Others called to say they felt they had no choice but to go to market a certain way. Each opinion varied slightly from the next in some way but everyone agreed they were overwhelmed by how much the industry has changed in such a short period of time. Many felt the future would bring about a decreasing number of manufacturers, which seems logical, and fewer distribution channels.
Recently, one large multi-concept operator finally agreed to allow us to price a market basket of 20 items it buys direct. But staff of the individual concepts negatively reacted to even reviewing the prices because they bought direct and did not see a need for a dealer. In fact, they had created their own internal dealership to make working with manufacturers directly even more efficient. For their part, the factories would not work on this project with us — an existing customer — without written consent from the operators.
As illustrated by the above example, the customer is now in charge of the supply chain business. This may be the new "logistical" way of the industry but does it work for our kind of distributors? More importantly, do we realize we let this happen? Is this what we want? Unfortunately, when working with struggling foodservice companies the first thing I tend to notice is that the organization's infrastructure has semi-collapsed and that the inmates run the asylum, so to speak.
Developing a clear scope of work is critical to any successful business relationship. We all try to do this but probably spend 40 percent or more of our productive time putting out fires. Assuming a reactive position so often compromises our ability to be proactive, thus limiting our opportunities to provide the dynamic solutions so many companies want from their supply chain partners.
So the burning questions facing the supply chain are: Who is in charge? Who is the customer? What role do the non–food distributors now truly play?
The foodservice trade associations, such as FEDA and NAFEM, should lead us in these discussions with the hope of moving the industry forward. They have the infrastructure and ability to provide a forum for an important all-industry discussion like this.
Are these conversations taking place under the industry big top these organizations set up? I am not sure. I do know, however, these associations have offered some wonderful ideas and leadership in the past and I hope they do so again soon. The future of our industry depends on it.
Failure to engage in these difficult discussions opens the door for new generations to enter the industry and channel the antiquated thinkers out of the marketplace.