Supply Chain Management in the Fast Food Industry
Supply and demand management is integrated by the Supply Chain Management (SCM). Planning and management of every activity that relates to procurement and sourcing as well as logistics and conversion is incorporated in SCM. Additionally, this concept covers the coordination and collaboration with partners in the channel. These include distributors, service providers, customers and suppliers. Some of the vital components of SCM include operations, integration, distribution, and purchasing (Soonhong et al 6).
In the industry of fast food that includes companies like Wendy, distribution is the most vital component of SCM. This component comprises of the transportation management in regards to making decisions while trading off between delivery time via different means and cost. This element also entails customer relationship management (CRM) with regards to the strategies that aims at ensuring deliveries, complains resolutions, enhanced communication as well as determining the requirements of the service. In addition, distribution involves the network design in which a company establishes distribution networks on the basis of the decisions made in relation to trading off between distribution systems’ complexity and cost (Lachlan 1).
Distribution also means the business location as well as its accessibility by its target customers. Therefore, this defines the distribution component as a critical element among the stores that sell fast food. For fast food firms, distribution is very important since convenience is the basis of this business. As such, location is a very important matter for the business to realize success. Location entails the place where the facilities of the supply chain are situated geographically. Similarly, it entails the decisions that are linked to the activities that ought to be done within each facility. It is possible for an organization to opt to centralize its activities in fewer locations so that it can benefit from scale economies as well as efficiency. An organization can also decentralize activities in several locations that are near suppliers and customers in order to enhance operational responsiveness (Soonhong et al 13).
Therefore, a store that sells fast food should have a strategic location that has a huge traffic flow. Additionally, the outlets that sell fast food are never a destination for customers. It is impossible for customers to travel to a countryside location just to get fries. However, they can do this if there is a restaurant that provides a spectacular experience. Outlets that sell fast food therefore ought to be situated in shopping malls as well as along the busy commercial streets for them to realize success in their operations. When a store that sells fast food is strategically positioned, it can capture customers who are in a hurry. It can also lead to impulse buying among consumers who may have not planned to enter a restaurant (Xaxx 1).
Vendors and franchisers ought to consider where their businesses are situated before launching or opening to enhance the realization of maximum results. This business depends on the population that can access the store that sells fast food conveniently. Additionally, the location determines how many people will become the customers of the outlet (Xaxx 1). For instance, if the outlet is situated in a location that has less traffic or a place where visibility is low, it will not realize successful outcomes. Most owners of the stores that sell fast food have their outlets located along busy business streets, in the shopping centers/malls, highways or adjacent to the other stores that sell fast foods. Thus, the franchisees ought to choose strategic locations as well as key areas that include near/within universities or colleges.
When deciding on locations, the managers of franchisee ought to consider other factors that relate to location in regards to the cost of facilities, skills that are available among the workforce, infrastructural conditions, labor cost as well as proximity to suppliers and customers. Decisions that are made in relation to location are very important because they entail committing resources in large amounts and for long-term plans. The effects of such decisions on cost and performance features on the supply chain are strong. Once the location has been determined as well as the size and number of facilities, different paths through which services/products will flow until they reach the end consumers can be defined.
Decisions about locations reflect the basic strategy of an organization in establishing as well as delivering products for the market (Soonhong et al 14). Location as a factor should also be considered by franchisers while expanding to the international markets. Franchisers in the fast food industry ought to have their effective channels of distribution in the specific market where they operate since this is important for marketing strategies. Franchises should also be situated near their target markets and their operation areas planned properly. Mei-Laind (9) notes that this is a convenient approach for the staffs of the company and consumers.
On the basis of this argument, it is apparent that a strategic location is important in enhancing performance as well as the success of a store that sells fast food. In this industry, location or distribution is a vital element because it enables the store to optimize its outcome. As such, location is more important when compared to product quality, HRM strategy and marketing strategy. The discussion has indicated that visibility and convenience form the basis of a business in this industry. These factors enable the target customers to locate as well as to access services of the store with ease. Additionally, most people who consume fast food are people who need quick bites and impulse buyers (Lachlan 3).
Lachlan, James. “Location Intelligence in the Retail and Fast Food Industry.” Journal of Market Research, 1.1(2011)1-3.
Mei-Laind, Chen, Kuang-Jung Chen and Mei-Chu Liu. “Expansion Trend of Fast food Franchises in Metro Manila.” Journal of Marketing Research, 1.1 (2002):1-12.
Soonhong, Min, Mentzer John, DeWitt William and Carlo Smith. “Basic Concepts of Supply Chain Management.” Journal of Business Logistics, 22.2(2001):1-41.
Xaxx, Jagg. “Key Elements of Success in the Fast Food Industry.” Business Management Journal, 1.1(2013):1-5.