Industry News | January 12, 2012

Arby’s Employs E-Sourcing to Control Costs in 2012

After three years of stagnant growth, franchised restaurants show signs for recovery in 2012. According to the International Franchise Association (IFA), quick-service restaurant sales are expected to increase 4.4 percent.

Although growth is anticipated, restaurants are still feeling the pinch. The commodity outlook for 2012 is estimated to rise in the low-to-mid single digits following last year's price increases.

According to the National Restaurant Association, wholesale food inflation ran at 7.8 percent in 2011.

As operating costs rise due to surging prices for basic ingredients such as sugar, flour, cheese, and beef, foodservice operators are forced to find ways to reduce costs internally or, unfavorable as it may sound, raise menu prices. With consumers still weary of spending, restaurants are evolving their supply chain to create greater efficiencies and help control expenses.

ARCOP, a leading supply chain cooperative for Arby's restaurants, recently partnered with e-sourcing experts Intesource to take their sourcing and procurement initiatives to the next level.

"We achieved immediate results with Intesource,” says Les Karel, senior vice president, indirect sourcing of ARCOP. “Their competitively priced and flexible offering coupled with a full service, highly supportive approach was very important. We have a lean team, and e-sourcing should allow us to decrease the amount of time it takes to execute an RFx from start to finish."

Over the next year, ARCOP plans to incorporate e-sourcing by working in conjunction with Intesource's dedicated team of experts to drive efficiencies and improve bottom line earnings for Arby's corporate and franchise operators.

"Integrating an e-sourcing technology and service for our sourcing process and project management will help us drive standardization and consistency across our entire team," Karel says. "By using one central platform we will be able to capture the data from our bids and projects for quick reference and review as needed."

E-sourcing, otherwise known as a reverse auction or electronic RFP process, has become a popular means of sourcing goods and services for foodservice organizations within the last decade.

Keith Anderkin, senior vice president, procurement of ARCOP, says reverse auctions, when used appropriately, are a fair and balanced way to determine true market price.

"As a result, we will be evaluating all categories to determine where an electronic RFP process may be beneficial while still maintaining the supplier relationships that are a critical part of our success," he says.

Other organizations that have partnered with Intesource include Anna's Linens, Meijer, and Wegmans. Distributors such as Nash Finch Company and Spartan Stores also use the company's full-service sourcing solution and services.