Category Archives: Food service providers

Bar-code scanning: bringing order to random weights

Foodservice distribution industry members are realizing the benefits that can be obtained from adopting bar-code scanning into their operations. Bar-code scanning can significantly increase the production process of distributors. Prominent companies such as Gordon Food Service and Atlantic Food Service are already using scanning technology in their operations. For distributors to get acquainted with bar-code scanning, they are advised to use the devices first on random-weight item handling.

Bar-code scanning will no doubt become widespread in the food-service distribution industry someday. The only question remaining is when.

While distributors and manufacturers continue wrangling over who is to blame for slow progress, a few distributors are quietly moving ahead and doing something about it. One is Atlantic Food Services, Manassas, Va., recipient of an ID Innovator Merit Award for its new automated warehouse system.

Another is Gordon Food Service, Grand Rapids, Mich., which pioneered bar-code scanning in the industry when it installed its first conveyorized pick system 15 years ago.

With the opening of its new Grand Rapids distribution center which began trial shipments in February, GFS is initiating a comprehensive bar-code-scanning program. The company is taking a gradual approach, but eventually scanning will expedite every phase of its warehouse operations from receiving and put-away to replenishment, order picking, and returns.

The first step in its new warehouse project focuses strictly on random-weight products. This strategy, operations/special projects manager Kirk Mortenson believes, could make sense for other distributors, too. If a company is looking for a pilot project to get its feet wet in scanning, random weights are a good place to start for several reasons, he says.

“Random-weight items represent a limited amount of product, compared with all of the other product categories, making them a manageable place to start.” At Gordon, for example, catch-weights account for fewer than 300 items and about 5 percent of the company’s total case volume.

POTENTIAL FOR BIG BENEFITS

Despite their small numbers, however, Mortenson points out, “They are an area where a distributor is likely to see immediate results.”

That is because selecting random weights is typically one of the most labor-intensive, time-consuming activities in the warehouse, and replete with opportunities for error.

Gordon’s present system for handling catchweights probably resembles the way most distributors work. The selector writes the weight of the item on a piece of paper or duplicate pick label which must be collected and given to a clerk. The clerk then keys in the information at a computer terminal so it can be incorporated for invoicing. This series of steps disrupts the selector and requires work to transfer bits of paper around, plus labor to enter data. Each time the selector writes a weight and the clerk then reads and keys it is also an opportunity for error.

Bar-code scanning with radio-frequency-based scanners eliminates the whole procedure. It requires placing a bar-coded weight symbol on each product. The selector then uses a portable laser-equipped terminal to scan the bar-coded weight. This immediately sends the information to the computer, enabling it to produce a correct, extended invoice without further labor.

An alternative for handling random weights is to place a unique, bar-coded ID number on each catchweight and create a computer record for that item that includes the weight. Later, when the selector scans the ID, the computer identifies the item and matches its correct weight for invoicing. This is how Atlantic’s system will probably work.

UCC-128

Rather than take a piecemeal approach to the problem, Mortenson notes, Gordon extensively researched the current state of bar coding by foodservice manufacturers and evaluated alternatives before settling on an approach. Finally, it decided to utilize and require vendors to use the UCC-128 Shipping Container Code with Application Identifiers. It is the newest, most complete format developed by the Uniform Code Council, Dayton, Ohio, for handling information beyond that contained in the UPC Shipping Container Code. It was endorsed by a multi-industry Distribution Efficiency Task Force including the National-American Wholesale Grocers Association, Falls Church, Va., in 1990.

Gordon chose it not only because it would supply all the information it needed, Mortenson stresses, but also because it provides numerous internal benefits to manufacturers.

The company found few vendors already using alternatives and the few in place were internal systems that varied from one company to another. Therefore, Gordon came to the conclusion that initiating the implementation of this most comprehensive system would help foster adoption of a workable standard throughout the industry.

UCC-128 is a further development of the Universal Product Code (UPC) system, that incorporates, in addition to item and shipping container codes, methods for bar-coding additional information such as weight, production date, expiration date, lot number, and serialized unit IDs. The ability to easily track these kinds of data through scanning in their own operations holds significant benefits for manufacturers, Mortenson points out. This was a key to its strategy for gaining compliance by vendors in supplying the codes.

Gordon worked closely with vendors through a painstaking process that included distributing its own Bar-Code Requirements handbook spelling out its labeling requirements. It also has strategies in place for dealing with non-compliant product, Mortenson adds, but its first strategy is making clear to vendors that labeling is their responsibility and a normal part of doing business with Gordon.

Other distributors with less clout than the $825-million-a-year leader stand to gain by taking advantage of Gordon’s work by installing systems that use the same standard.

There are alternatives, such as the unit ID approach Atlantic plans, or applying one’s own bar-coded weight labels in-house as product is received. In fact, the former Holleb & Co., Bensenville, Ill. (now Kraft Foodservice, Chicago), installed such a system roughly five years ago. Then vice president, distribution, Neil Holleb said at the time that the system provided huge benefits in speed and accuracy in handling random-weight products.

Joey Pierce of North American Systems, Richmond, Va., which designed Atlantic’s system, notes its approach can also use UCC-128 when vendor codes are in place.

GETTING STARTED NOW

Scanning was still novel when Holleb launched its program. There have since been tremendous improvements in the availability, range, and pricing of equipment needed, which puts scanning truly within reach of many distributors.

A basic starter system might require a few hand-held scanner terminals and a radio-frequency base station for communications between the scanners and host computer. If vendors do not supply bar codes and in-house weight labeling is required, another needed component would be a scale with bar-code capability.

One can also use means other than RF to transfer data from scanners to the host computer, such as wired links. This could reduce start-up costs but eliminates the advantage of instantaneous communications.

One key point, Mortenson notes, is that scanning does not have to be an all-or-nothing type of project. Random weights may be a good place to begin implementing and experimenting with such a project since present methods leave so much room for improvement in accuracy and efficiency.

Many manufacturers still seem unaware or unconvinced of the benefits scanning offers distributors as well as their own operations, and say they are still waiting for indications it really is something distributors will use. A few well-placed pilot projects might convince them.

Sheltered income: the battle continues

Foodservice distributors and manufacturers recognize the role played by sheltered income. Sheltered income contributes 100 to 300% of a distributor’s tax profit, therefore spelling the difference between a distributor’s survival and shutdown. Manufacturers have come to accept the necessity of shelter and view it as the cost of getting involved in the distribution game. Although many believe that sheltered income is here to stay, methods can still be employed to make them more manageable.

Only three statements can be made with certainty about sheltered income. First, it is the single most abrasive component in the food-service distributor-manufacturer relationship. Second, it is a topic of such exquisite sensitivity that, however passionate the commentator, whether distributor or manufacturer, all observations are off the record. Finally, all agree that sheltered income has become a tiger so big that, as one distributor notes, “it is impossible to put a rope around it.”

Even definitions vary. Some manufacturers consider promotional funds allocated to distributors a component of shelter. Others have separate promotional funds. Cash discounts can be considered a form of shelter. So can manufacturer growth programs with distributor customers.

But, there are a seemingly infinite number of other forms of shelter for which distributors reach out to their vendors. They include fees for access to their sales forces, charges for participating in sales meetings, trade shows, and slotting allowances, to name but a few.

Whatever its form, though, shelter has become an all but indispensable component of distributor margins. In many, if not most cases, it is the lifeline to survival. If it were not for the existence of shelter, foodservice distribution would be decimated.

Knowledgeable observers of the scene estimate that sheltered income contributes from 100 to 300 percent of a typical distributor’s pretax profit, with the average contribution falling in the middle of this range.

No distributor questioned on this estimate disagrees. Translated into the simplest language, this means that if it weren’t for the availability of shelter, the average distributor would, at best, break even. Many would sink.

One real-life example points up the reality. Although, for obvious reasons, dollars-and-cents figures cannot be revealed, the story can be told in terms of percentages. At the beginning of his most recent fiscal, a Top-50 distributor projected his company’s pretax profits for the year. Shelter comprised approximately 120 percent of this bottom-line projection.

Year-end came. The bottom line ended up 50 percent under plan, this despite the fact that shelter dollars ended up 125 percent over those that had been projected.

Thus, contrary to what many vendors contend, what may seem like increasingly strident demands for sheltered income are stimulated by much more than an attempt to fatten bottom lines. Like it or not, it has become fact that for the average independent distributor, shelter is the bottom line. It spells survival.

THE WELLSPRINGS RUN DEEP

At this point, when so much emotion is connected with the issue, it is difficult to pinpoint exactly when the distributor battle for shelter first began to roil the waters in relationships with vendors. In retrospect, it was probably the early to mid-1980s, when the giant corporate distributors began to exert their purchasing clout and fearful independents sought avenues to match it.

However, this is, at best, a simplification, for there are other factors as well. While the whole subject of shelter is customarily thought of as a manufacturer-distributor issue, it is at least as much a distributor-operator issue.

Put most simply, operators–particularly those in the multiunit sector–have their own margin pressures. With their eyes focused on price and in their quest for the lowest conceivable cost-plus deals, they have put the squeeze on distributors. Distributors, in turn, have inevitably moved this margin pressure one rung further up the ladder to the manufacturer.

In the 1970s, when cost-plus business first began to loom high in the broadline-distributor customer mix, cost plus 12 was a generally accepted standard. True, even then, there were some who were quoting cost plus 10, but this was considered dangerously low unless there were alleviating factors. Today, cost plus eight is common and even cost-plus-seven deals abound.

Such arrangements can be profitable to systems distributors whose total operations have been geared to service operator chains. Customarily, they deliver to a limited number of customers through carefully controlled programs, are not burdened with an excessive number of line items, and can achieve high inventory and money turnover rates. Low cost-plus arrangements make sense for them. For a typical broadliner, they do not.

How, then, does the latter manage to ring up a bottom line with cost-plus-eight or even cost-plus seven programs? The answer is simple. He rarely does. Not really.

As one distributor puts it, “We are not using numbers reflecting our actual margins. Any distributor knows that he needs a 17-percent margin to realize any sort of bottom line. The only conceivable way a distributor could execute cost-plus-seven chain programs and achieve this essential 17 percent would be to realize 27 percent with street customers. We know this isn’t the case.”

What is happening too often takes on the appearance of a game played with smoke and mirrors. It is shelter, which is not generally included as part of “cost,” that makes up the missing margin component. In short, “cost” has lost any meaning it might once have had.

However, while there is undoubtedly much legerdemain involved in defining cost, this largely results from the fact that any distributor who reveals his true costs will find himself wedged between the proverbial rock and hard place. Imagine, for example, this far-from-hypothetical situation.

Distributor A goes to a prospective chain, reveals his true costs, and offers a cost-plus-12 program. His competitor, distributor B, is less candid and says that he can do the job as cost plus seven or eight. Almost inevitably, the contract will go to distributor B, although actual dollar costs to the chain could be less on the plus-12 program where costs are accurately defined.

Nonetheless, operator pressure on margins is far from the only stimulus for the onward march of the shelter concept. It is noteworthy that many of the vendors whose cries about sheltered income are the loudest are frequently the very ones who offer ever-broader financial incentives in their eagerness to obtain additional distribution for their lines.

As one astute observer of the distributor scene notes, “The majority of the responsibility lies on manufacturer shoulders. They look for ways to endear themselves to foodservice distributors. They have aligned themselves with distributors through shelter rather than through systems and marketing goals.

“On new products, for example, they will offer so many dollars off per case even before a price point has been established. Naturally, as they come to the door with such new-product introductory offers, the distributors build them into their profit margins.

“Shelter is the easiest road for a manufacturer to take to capture a distributor’s share of mind.”

MANUFACTURER VIEWPOINT

It is safe to say that most manufacturers, like it or not, have come to accept the necessity for shelter as a fact of life in working with distributors. It is the relentless pressure for more as well as how the funds are used that concerns them.

As one major manufacturer puts it, “We consider sheltered income as green fees, the cost of getting in and playing the game. What bothers us is the magnitude of the fee we have to pay. If a competitor offers $1.00, do we have to pay $1.50 to play?

“Cash discounts are fine with us,” he continues. “They speed our cash flow, and, not incidentally, also serve as credit checks on customers. We will give rebates on a pay-as-you-go basis, but won’t pay up front. And we will participate in growth programs.”

However, another vendor, who looks at shelters as “insurance programs,” contends that “the industry is in a self-destruct mode. Manufacturers are expected to make up lacking margins resulting from operators putting the squeeze on distributors. Too often, manufacturer-distributor partnerships are relationships where we end up bleeding together.”

Whatever the degree of acceptance of the distributor need for shelter, manufacturer animosity centers on what they see as strong-arming and the mounting demand for what the distributors term unique programs, but the vendors consider run-of-the-mill approaches that fail to expand the market.

“Pounding at the manufacturer doesn’t build volume,” one vendor notes. “A DSR goes to an operator and finds that a competitor is selling a product at $2 a case less. He goes back to his management and gets them to meet the price. This doesn’t build volume. Too many operators are working the distributor. Distributors have to take a stand. We do.”

Many manufacturers recognize the mutual benefits of growth programs. But, they say, distributors in increasing number are demanding guarantees. “They don’t recognize that I have growth objectives, too,” one says.

Still another manufacturer complains that “now instead of talking growth programs, distributors are asking for shelters that begin with case No. 1. During the recession, many of us restructured our growth programs so that the increments which formerly began at 100 percent of goal began to come in at 95 percent. Now it’s forget the 95 percent.”

And as manufacturers, particularly those with strong brands, point out, they have their margin pressures, too. They are locked in on prices. If they raise them, they will no longer be competitive with distributor private labels.

THE DISTRIBUTOR CASE

While at least a considerable number of distributors acknowledge that the crying need for shelter is hardly a symptom of industry health, it would be difficult to find any distributors who find the principle itself either illogical or unjustifiable.

One leading independent puts it this way: “As an industry, distributors market and channel the manufacturer’s product to operators. If we weren’t here to perform this function, the manufacturer would have to take on our distribution costs.

“Basically, the manufacturer pays us to market his goods. He does this through promotions, by participating in our food shows and, in cases where our volume is sufficient on his line, by keeping one of his people on our staff to work with our sales force. Basically, he is paying us to perform a marketing function for him.

“These are all forms of shelter which help us bolster our margins. In return, the vendor benefits by getting more business.”

Another distributor, one of the pioneers in developing shelter programs with vendors, says, “All our deals are based on growth programs. We put all our eggs in one basket, consolidating as much as possible with selected suppliers. If we grow, they will.”

“Shelter is not extortion,” says one distributor. “Manufacturers have been playing with the concept for 15 years or more. They have adjusted their prices. The margins of public companies haven’t shrunk.”

Such distributors, of course, endeavor to give vendors a bang for the bucks they provide in the way of shelter. There are others, though, who just take. But, it is pointed out, manufacturers bear at least some of the responsibility for this.

“Manufacturers no longer ask how many of the requests they get for shelter return value to them. They don’t ask themselves how the value they receive can be translated into dollars or who they can afford not to give shelter to,” one distributor observes.

Meanwhile, as they buttress their position, distributors point to the practice by at least some manufacturers of setting up contract pricing directly with operator chains. Such deviated prices put distributors in a squeeze position.

As a major distributor told manufacturers at an industry forum not long ago, “There are two kinds of customers, our customers and your customers, and for your customers, you set special pricing at less than we can buy for.”

Manufacturers are also accused of sharing distributor price lists with multiunit-operator customers. If that is the case, a question of ethics arises, distributors contend. After all, they maintain, they pay for the products and they own them.

Also promising to further intensify the distributor need for shelter is the fact that major multiunit operators are beginning to call for and get it themselves. When chains are beneficiaries of such deals, it is a rare instance when they allow their distributors to raise the “plus” percentage on their cost-plus programs.

CAN THE TIGER BE ROPED?

It seems unlikely at this juncture that the beast can be tamed completely. Who started the ball rolling is no longer a question. Shelter has become part of the distributor-manufacturer operating cycle.

Also no longer of particular interest is whose fault it all is. Both parties–distributor and vendor–share responsibility. Distributors have abjectly failed to educate operators in the true costs of distribution, choosing to taking the seemingly easier approach of seeing if they can sell for less. Manufacturers, too, shoulder a percentage of the responsibility by offering shelter, sometimes helter-skelter, as an avenue to expanded distribution.

However, while it is doubtful that the tiger can be completely tamed, it could be made more manageable. There are signs of light at the end of the well-known tunnel which offer a glimmer of hope that, even if distributor demands for shelter continue to echo–as they most certainly will–manufacturers will get a better return on their investments.

Consolidation of vendors by both distributor marketing groups and individual companies has become a major trend in distribution. This provides the opportunity for both manufacturer and distributor to develop joint programs to increase market awareness, to provide at least sustained volume for existing products and growth for new ones.

What seems required above all is to call an end to the smoke-and-mirrors.

Distributors should level with their customers and explain to them that the costs of distribution extend beyond that of product.

Manufacturers should stop running scared and concentrate their programs with distributors who return value that can be expressed in dollars. As a former First Lady observed, “You can always say no.”

Positioning is everything

Foodservice distribution representatives should realize the importance of product positioning. A majority of operators are now acquiring food products on the basis of its versatility. To position products effectively, reps should provide customers with more ideas for using center-of-plate items. They should also learn how to reposition items currently in stock. For menu styles, an upscale, midscale and downscale product positioning strategy will work well.

When are flour tortillas not merely Mexican menu staples? When they’re wrapped around deli sandwich fillings…topped with grilled vegetables and shaved parmesan cheese as a gourmet pizza…sliced into strips and baked for a crispy salad topping…baked with layers of cheese, grilled vegetables, tomato sauce, and steamed spinach as a new-wave lasagna.

Versatility is demanded of foodservice products today, and manufacturers go to great lengths to portray their products as chameleons able to meet a variety of menu needs.

In most cases, however, it’s up to the DSR to act as interpreter. The ability to translate a single product into a multitude of menu possibilities is a skill that transports reps from order takers to business consultants. It also guarantees increased order size and maximum account penetration.

The name of the game is positioning. DSRs who hail from culinary or restaurant-operations backgrounds have an edge. They’ve been trained to think like operators and develop creative menu items while keeping inventory and food cost in check.

But, even nonculinary sales reps can become skilled at product positioning. All it takes is a dose of creativity applied with savvy selling techniques. Once you get the hang of it, you’ll find that it works for virtually any product category and extends to a multitude of cross-sales opportunities.

KEY POSITION: COP

Effective product positioning is especially important with center-of-the-plate items. This category may also be the easiest to begin with because the range of COP is limited but the products are extremely versatile.

Typically the most expensive category of operator purchases, these items hold the most opportunity for success. Reps able to get the center-of-the-plate business often enjoy domino-effect sales in other product categories as well.

When focusing on COP positioning, it’s critical to remember that most operators today aren’t interested in solo products. That is, they’re in search of items that have multiple uses on their menus.

“There’s been a big change in how operators look at product positioning over the past four or five years,” notes Ron Garrett, corporate chef for Thoms Proestler Co., Davenport, Iowa. “They’re no longer interested in bringing on a multitude of new items to expand their menus. The costs are just too high.

“They still need menu-expanding ideas,” Garrett adds. “But, they have to get more mileage out of fewer products. DSRs need to be aware of that and gear their sales efforts accordingly.”

Garrett, who regularly works with reps and customers to develop new menu items, suggests that DSRs carefully analyze customers’ menus before introducing center-of-the-plate products. The more ideas for how to use a particular item that the rep can go in with, the better his or her chances of success.

“We have to be able to suggest COP products that can be used as regular dinner entrees, specials, luncheon entrees, salads, and/or sandwiches. Show the operator creative ideas for extending the use of a product and you’re much more likely to make the sale,” Garrett says.

Ed LeBlanc, corporate chef at Doerle Food Services, New Iberia, La., agrees, adding, that evaluating products from a cross-market standpoint is also effective.

“For instance, we carry a low-end marinated-steak product that we sold primarily to family-style steakhouses. We decided to position the same product for nursing homes, a big segment for us, and have had great success.

“Nursing homes are, of necessity, extremely cost-conscious. We’d never expect to be able to sell a steak product there,” LeBlanc adds. “But because this is a value-priced product, and is pre-marinated to make it especially tender, we introduced it to these operators. They’re always looking for new items to feature as specials, and this fit their cost parameters. Because of effective positioning, we now sell more of this steak product to nursing homes than to steakhouses.”

Conversely, LeBlanc notes that the light-and-healthy boom generates strong opportunities to position what have traditionally been healthcare products to other industry segments.

“Dovetailing on ComSource’s Lite Source program, we’ve been able to market products like oil-free roux, water-packed fruits, and low-sodium/low-fat items outside of the healthcare segment,” he says. “Even white-tablecloth and family-style operators are demanding lighter, more healthful ingredients.”

Another example of successful cross-market product positioning at Doerle involves catfish. Although it is traditionally a low-end product–served fried in family-style restaurants throughout the south–Doerle reps position the product to white-tablecloth customers.

“Competition and general economic conditions have put a tremendous squeeze on these operators,” LeBlanc says. “More than ever, they’re looking for quality products that are low-cost and high-profit. We introduced a frozen catfish fillet and suggested ways to prepare it for upscale presentation. Many of these customers now offer it grilled or sauteed with light signature sauces. And they don’t have to worry about the tremendous fluctuations in quality and pricing on fresh seafood. It’s consistent, easy to prepare, and very profitable.”

REPOSITION ITEMS IN STOCK

New-product introductions aren’t the only time that DSRs should be applying positioning-focused sales techniques. Careful study should also be made of products currently featured on customers’ menus. If sauteed chicken breast appears as an entree option, for example, suggest more ways that the operator can use the same product to expand and enhance the menu.

Grilled and topped with greens, sliced tomato, and condiments, it becomes a lunch or light-dinner sandwich option. Sliced and fanned atop salad greens and fresh-cut vegetables, it becomes an attractive entree salad. Baked with fresh herbs and roasted vegetables, it’s yet another entree selection. Cubed and skewered with vegetables, it becomes a light-and-healthful shish kebab.

Positioning products–COP or otherwise–as such versatile players has benefits beyond menu expansion. By using fewer products in more applications, the operator is able to reduce inventory needs, ordering, receiving, and prep, and turn inventory quicker. The end result is lower labor cost and higher food quality because quicker turns means fresher product.

When considering a specific product, DSRs should make a written or mental list of a number of things that it can be used for, as well as the market segments for which these uses are appropriate.

They also should consider various preparation methods that can be used to prepare the item. Many products, for instance, can be roasted, grilled, braised, sauteed, stir-fried, or broiled. By varying the preparation style and accompanying items, the operator expands the menu while still limiting items stocked.

The dishes made with red potatoes pictured here illustrate how different preparation styles applied to the same product can yield varied results.

Boiled, cubed, and blended with salad dressing, chopped parsley, and onion, red potatoes become a side salad that jazzes up simple sandwiches. Quartered, deep fried, and served with dipping sauces such as sour cream and salsa, they’re a great casual, mid-market finger food. Roasted with garlic and herbs, red potatoes are an attractive and delicious side with meat, poultry, or seafood suitable for white-tablecloth menus.

DEVELOP ‘U.M.D.’ STRATEGY

In developing product-positioning strategies, apply “U.M.D.”–upscale, midscale, downscale–thinking. The average full-line DSR’s account base spans each of these levels, and many products can be targeted to all three.

Truly effective positioning may require breaking habits and changing assumptions about the suitability of various products for various menu styles. It also requires creative brainstorming.

Take shrimp. Often considered an upscale item, shrimp can actually be marketed to a variety of menu styles. Because prices can fluctuate significantly, reasonably priced product is often available.

The photos above illustrate how a single shrimp product (IQF 16/20) can be positioned for three menu styles–as a casual shrimp-salad sandwich, a mid-scale entree with fettuccini and vegetables in Alfredo sauce, and an upscale special with shiitake mushrooms, steamed asparagus, and rice pilaf.

By positioning a COP item such as shrimp–or catfish, steaks, chicken fillets, pork medallions, etc.–to more varied operators, DSRs can increase average order size and boost profitability.

The example of flour tortillas can also be used to illustrate creative positioning. Typically considered simply a Mexican menu item, flour tortillas have far more versatile menu applications and can be positioned to operators outside the Mexican niche.

The photos above show three varied applications suitable for a range of menu styles, from a downscale Mexican quesadilla appetizer, to a deli roll-up sandwich, to an upscale grilled vegetable pizza using the tortilla as a crust.

Each dish offers low food cost, easy preparation, and a number of cross-sales opportunities–cheese, salsa, guacamole, sour cream, black olives, black bean or other prepared side salad, jicama, deli meats, lettuce, grilling vegetables.

Coming up with ideas to present to customers based on creative positioning becomes easier with practice. Once DSRs develop a positioning mindset, product-usage possibilities begin to flow and opportunities can be recognized.

“More and more, DSRs have to make creative positioning part of their sales effort or they’ll be left behind,” notes Doerle’s LeBlanc, formerly a DSR as well as an operator. “Just going in and taking a customer’s order without offering ideas and solutions isn’t what their job is about anymore. Reps have to be able to sell services and demonstrate that they understand customers’ needs and concerns. Inventory control, food cost, and menu development are all key areas that can be impacted through skillful positioning.”

Do you believe what distributors are telling you?

Most food store operators affirm that they trust their foodservice distributors. However, they also agree that distributors are also prone to mistakes. They also know that, being in the business of making money, distributors may not give the lowest prices. Nevertheless, operators generally view distributors with trust and believe that the latter works in their best interest.

* Roger Berkowitz CEO Legal Sea Foods Allston, Mass.

Yes, we trust our foodservice distributors. But, we also assume that they can make mistakes. If you assume that, you are more detail-oriented in checking deliveries or anything else you do.

We tell our general managers at each restaurant that mistakes will be made from time to time, and they are responsible for checking things closely and finding any errors. We also distribute some items ourselves and know that mistakes can be made there, too, so managers check our deliveries as well.

We do trust our suppliers. That’s why we’re doing business with them. However, you have to assume that everyone can make mistakes.

There also may be situations where you have a good relationship and complete trust from the outset with the head of the company with which you’ve made your agreement. But, there can be situations where drivers or other people in the distributor’s organization take advantage of that trust. So you always have to go in with your eyes open completely, and assume that mistakes will be made.

* Bo Handy District Manager T-Bones Charleston, S.C.

Overall, I would say we trust our suppliers on issues such as whether they do what they say they are going to, whether they provide us with good-quality product, and whether their trucks are clean.

But, there are some issues on which we don’t trust them. For example, we don’t always know whether they are giving us their lowest price. The answer is that they are not because they are in business to make money and we know it.

However, I generally feel that our distributors look out for our best interests. I usually trust that they do. But, I think I also need to shop around.

We have five restaurants in two states and deal with some large companies, and sometimes the same company will quote different prices to different locations. They may even quote different prices to two places in the same town. So we shop around among a couple of major companies, and if someone has a better price, we may buy an item from them one week instead of from the other company.

Part of our job as managers is to make sure that we get the best product for the best price. However, that doesn’t mean that we always take the lowest price, because that may mean settling for lesser quality. But, we do shop around.

Aside from that, we trust that the distributors we deal with are capable. However, since they’re doing business on a mass scale, some things will slip through the cracks sometimes, and we have to check.

* Dolores Juergens Director, Food Services Northwestern Mutual Life Insurance Co. Milwaukee

I trust them. However, we’re a large operation in a position to employ competitive bidding, and I think that is something we need to keep in the forefront. I think that competition is good, therefore I’m not a believer in one-stop shopping.

Also, when it comes to product quality, I don’t rely on anybody for trust factors. I do a lot of comparative shopping myself. With canned fruits and vegetables, for example, we ask each supplier to submit samples, and we open the cans and compare the products to each other.

It is up to us to be the judge of quality. Certain claims are made by distributors about the quality of products that they carry, but I feel that it’s our responsibility to search out the truth. And I think it’s up to the distributors to understand why they are not getting the business if we try something and aren’t satisfied.

Roadblocks slow progress on standardized databases

Food service providers and food products suppliers are complaining that the development of foodservice-product databases sponsored by the International Foodservice Distributors Assn. is moving at a slow pace. They attribute the unsatisfactory progress to the indifference given to the standards by many manufacturers. They also complained that most manufacturers did not understand the standard and were at a loss as to how to distribute the information once it is compiled.

Eighteen months after creation of a standard to facilitate development of foodservice-product databases, progress is still being impeded, according to distributors, marketing-group officials, and others.

“The project is moving along much too slowly from everyone’s standpoint,” Allen Ryan, president of North-Center Foodservice Corp., Augusta, Maine, and chairman of the International Foodservice Distributors Association committee that wrote the standard, complains.

Ryan and others blame several factors. One is lack of recognition by many manufacturers of the benefits computerized databases offer. Another is confusion over what the standard is and how manufacturers can get their information distributed once it has been compiled.

A persistent misconception is that the IFDA standard is itself a centralized database. It is actually just a format for organizing information that makes it easier for companies to exchange data.

Still at issue are what vehicles would best serve the industry for maintaining and distributing data, and who should bear the cost. While such distributors as Gordon Food Service, Grand Rapids, Mich., are creating their own databases, the most widely used is one marketed by Sales Partner Systems, Daytona Beach, Fla. This system now includes 12,000 products representing 180 manufacturers. SPS’ XPD product is linked to sales of its proprietary software, however, which has led to questions of access for distributors that are not SPS customers.

SPS charges manufacturers a fee to list their products and distributes the data both as part of software packages sold to distributors for use by DSRs and operators, and in a stand-alone application called ShowCase. It also sells the entire database in IFDA format.

Participating manufacturers also receive copies of their information back from SPS in two forms: ShowCase and IFDA Standard Product Data Exchange Format. Manufacturers own this information and are free to distribute it however they wish, says SPS vice president-sales and marketing Marty Weil. As an added service, SPS distributes a vendor’s data to customers on written request, database director Melissa McKee says.

Despite development of the IFDA standard, confusion has persisted over the different formats. A number of distributors have reported receiving product information in ShowCase rather than IFDA Standard. The former, being a stand-alone application, cannot be incorporated in other programs. On the other hand, SPS president Larry Frank explains, IFDA Standard is simply raw data that cannot be viewed or used without additional programming.

Some in the industry have asserted that SPS at times deliberately avoids or tries to block release of product information to noncustomers in IFDA standard. SPS denies this and points out that, since last spring, it has tried to dispel any confusion that exists over formats with mailings that clarify the difference between ShowCase and the IFDA standard and spell out the rights and means of access vendors have to their data.

Other avenues exist for putting data into IFDA standard beside SPS. Source Data Management, Chicago, a spin-off of Access International, offers an “editor” program that allows anyone to compile product data in IFDA format to populate their own database. National sales manager John Knoebel notes that a number of Access customers and other organizations use this tool. He also stresses that any manufacturer that has product data in the IFDA standard can provide them in that form for use by distributors with Access’ laptop and other sales systems.

A company can also obtain a copy of the format from IFDA and then develop its own software for compiling data. In addition, McKee says that SPS will sell its editor to anyone who wishes to assemble data themselves.

This still leaves unanswered questions concerning distribution of data, which Ryan says will be taken up at a meeting of the IFDA Standard Product Data Exchange Committee next month.