Company: Dairy Queen Canada
Industry: QSR, Food and Beverage
Contact: Tom Marranca, Equipment Manager
I had an open discussion with Tom Marranca, Equipment Manager, for CDQ, a co-op owned by franchisees to support franchisees under the Dairy Queen umbrella. Tom has worked with DQ for over 30 years in positions in construction, installation, training, operations, field support and more and been witness to some enormous changes in operations due to technology and social media. Here are just a few examples.
Looking at the famous DQ soft serve ice cream for example. Through a National Dairy Program, this product literally comes from Canadian Dairy farmers into a production facility such as Saputo or Agropur, is prepared for DQ in liquid form and shipped direct to franchise locations. The system allows DQ group of companies to monitor orders and supply in real time and manage the supplier relationship on behalf of the franchisees. Dairy Queen is a truly iconic brand with more than 75 years of successful operations. It has long standing, established relationships with these suppliers based on history and expectation and together they have grown the supply chain to what it is today. There have been bumps in the road, but the significance of this relationship to all parties remains paramount. Technology and social media have changed the way the relationship is seen by creating connectivity between the parties and an open forum to discuss challenges and provide support in a way that was not so easily gained in the past.
When there is a promotion coming down the line from marketing, the information is shared with franchisees through marketing communications channels. The information is also shared with suppliers through supply chain channels to let them know that there could be an increased demand for certain products due to the promotion. A system called Instill is used for the promotional supply chain. While a second system titled ITrade is used for, the monitoring and movement of inventory. It is an intelligent system that connects suppliers with franchisees and corporate DQ offices. It can facilitate communications between franchisees, suppliers and HO and allows franchisees to track orders, delivery status etc. Franchisees can dial in directly from their smart phones or at their location to see what’s happening in real time.
Non-Perishables and equipment are handled differently. In the past warehouses were managed and inventory stored in locations all over so they could serve franchisees quickly. Then later as trucking and warehousing industries evolved, the abundant smaller warehouses were abandoned in favour of much larger more strategically placed warehouses. Now with the adoption of technology and social media, the vast monetary and human expense once experienced have all been reduced, replaced with a social network. Cash registers, connected with inventory, connected to suppliers, keeps the need for warehousing to a minimum. Sales are downloaded from stores at 15 minute intervals and because inventory is connected to sales, inventory levels can be managed more cost effectively. If a store is experiencing a higher than normal demand for a product and results in low inventory on an item, this can easily be addressed. The franchisee can sign in on their smart phone or through the system on location and make adjustments in orders on the fly. Originally, sales were downloaded once per day, one store at a time and then reviewed and evaluated a month or two later. Although, at the time it was the best available option, a delay of such length could truly diminish the effectiveness of any promotional or marketing campaign in addition to the amount of time consumed by manually tracking inventory.
Social media has changed how orders are placed, monitored and tracked. Whereas years ago, inventory was manually counted and calculated with orders placed through phone or fax, now, the latest generation of soft serve machines is connected into the supply chain network and reports inventory usage, which is then linked with inventory holdings and orders to the supplier. I can also report on functionality. If a machine is malfunctioning in some way, the system can notify the franchisee that something is wrong.
Social Media for emergency response. DQ has adopted social media into its supply chain for emergency procedures as well. Todays connectivity between suppliers, franchisees and head office means that if there is a need for an emergency recall on a product, the supplier can immediately notify franchisees and HO. A series of messages sent out through the inventory system, internet, email and mass phone calls ensures that franchisees get the message one way or another. The system tracks responses as well, as each franchisee is expected to acknowledge the message. If that doesn’t happen then that location is flagged at HO and a personal call occurs to ensure the franchisee is notified and the recalled product taken out of inventory. The system also dispatches a new order to replace inventory of what was recalled. The system is so sophisticated that it would know exactly how many recalled products each store has, how many have been used, the UPC codes of each unit, when it was received and from where. Mock emergency recall tests are performed regularly to make sure there are no broken links.
So where is all this going? What’s next on the horizon for supply chain management? When asked, Tom replied
“I believe that the time of dramatic changes in business operations and inventory control have likely passed. What I would expect now is more subtle growth to smarter more detailed information systems. Where detailed cash register data is linked to a monitoring system of some kind. Parameters on inventory levels could be set so if sales of a particular item caused inventory to fluctuate above or below the set parameters, then the franchisee would be notified. Sales would be recorded up to the minute and an app linking sales, inventory, COGS, even manpower could be used to manage easily and remotely.”
Social media has revolutionized the way businesses manage and even structure their supply chains. The adaptation of social networking has all but eliminated the need for warehousing huge amounts of inventory and gives decision makers and their partners real time information with which react and formulate solutions. Advances in technology have also fostered a strong sense of connectivity and communication between supply chain partners thus strengthening those relationships. And lastly it has offered cost and time savings all the way down the line. A more effective and efficient supply chain means more time to well, eat more blizzards of course! My personal favourite…Crispy Crunch! Yum!
Learnings for Others:
In this audio clip, Tom shares his thoughts on key learnings for modernizing your supply chain.
Facts and Figures
At the end of its fiscal year 2014, Dairy Queen reported:
- over 6,400 stores in more than 25 countries;
- appprox 4,500 of its stores (approximately 70%) were located in the US
Submitted By: Lisa Taylor, student, SMPB, University of Waterloo
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