A decade is quite a bit of time, but when you are trying to create a new paradigm it can seem like an instant. That’s my perspective these days as I consider our first 10 years in business and plan for the next 10 ahead. ArrowStream was founded in 2000 with the goal of transforming a transactional supply chain model into a collaborative network of trading partners that allows businesses to help each other succeed and share in the benefits.

I realized that greater transparency and widespread information sharing could redefine success for businesses all across the foodservice supply chain-manufacturers, distributors and restaurant chains and operators. By working together and increasing visibility into the supply chain operations, trading partners would all see substantial gains in profits, efficiency and agility to make informed, strategic decisions. Certain that increased supply chain information sharing would yield greater trust and partnership, ArrowStream set out to build the first collaborative network for supply chain trading partners-with our primary focus on the foodservice industry.

During the last 10 years, we have put forth great effort to make a dent in this ambitious undertaking. Because of our remarkable team of supply chain and logistics experts who are passionate about their work and customers who trusted us with the systems and data at the heart of their businesses, ArrowStream’s 10-year history boasts numerous milestones and achievements for which I am grateful. Here are 10 of ArrowStream’s accomplishments from the last 10 years that I am celebrating this month:

1. Extraordinary customers who share savings and foster strong relationships through trust and collaboration with other business partners.
2. A compound annual growth rate (CAGR) of 39% in the last three years (2007-2009).
3. Crain’s Chicago Business named ArrowStream Chicago’s fourth fastest growing company of 2009.
4. Inc. Magazine ranked ArrowStream # 867 on the Inc. 5000 list of fastest-growing private companies.
5. $41 million in rebates are generated across the ArrowStream Network.
6. The ArrowStream Network represents almost 10 percent of the foodservice industry today.
7. The ArrowStream Network provides visibility into more than $15 billion of product.
8. The ArrowStream Network today includes 4,000+ restaurant chains, distributors and manufacturers and reaches over 19,000 restaurants nationwide.
9. ArrowStream customers represent nearly 25% of the top 50 brands listed in the Nation’s Restaurant New’s 2009 Top 200 chains by sales and includes some of the nation’s most successful, innovative and expansive foodservice businesses, including Wendy’s, Panda Express, P.F. Chang’s, and Popeye’s.
10. A team of talented people who have dedicated themselves to fulfilling our vision: building the world’s most efficient supply chains.

I am proud of the work ArrowStream does, the hardworking team we have built and our customers and partners whose success and achievements fuel ArrowStream with ambition to accomplish more. While there are hundreds of feats to celebrate from the past decade, I think this list of 10 is an excellent representation of how ArrowStream’s daily focus-to provide customers with superior supply chain operations, higher profits and a much stronger competitive position-yields industry-changing results. And we have only just begun to scratch the surface.

Part 1 of a 4 part series

Synchronized, visible, networked and nimble. That is ArrowStream’s vision of what the foodservice supply chains of today must become. And really, who wouldn’t like that vision? The exciting news is that the industry is not ridiculously far from this goal, which would result in highly integrated, data-rich supply chains that enable fluid product movement and low total cost while delivering prompt ROI.

What’s holding up this very advantageous evolution is the “information protectionism” we blogged about in October. Trading partners in the foodservice industry are not good at sharing information, networks, technology systems or performance goals and that has to change.  

A recent report by CapGemini entitled “Succeeding in a Volatile Market: 2018 the Future Value Chain,” reports on progressive ways businesses across the supply chain can work together and share information. Offering advice such as aligning business planning and establishing new measures for performance, this report confirms what we at ArrowStream know to be true: cultural, business and system barriers to information sharing can be overcome when trading partners work together to achieve mutual benefits.

One of the toughest challenges in this broad goal of greater information sharing is finding manageable, systematic ways for trading partners to do it. Over the last decade, ArrowStream has worked with foodservice businesses to establish and engineer processes for greater information sharing. Today, I gladly share with you the first of ArrowStream’s four tenets of trading partner information openness: Working within a Network. Be sure to watch for steps two, three and four in subsequent blog postings.

Tenet 1: Work within a Network

In the foodservice industry, information is often purposely withheld among trading partners in order to protect sheltered revenue streams or because of simple distrust. In ArrowStream’s 2009 Supply Chain Insights survey, not a single foodservice business reported having completely integrated supply chain data with trading partners. Only 16% of survey respondents noted significant data integration.

Unfortunately all businesses along the foodservice supply chain lose when information sharing is minimal. Studies again and again show that in today’s competitive global marketplace, information sharing among suppliers, distributors and their business clients is essential to winning market share, increasing profitability and maintaining customer satisfaction and loyalty. By sharing insights like order entry time, manufacturing lead time, distribution time, operator rebate data and distributor billback information, all trading partners can make better decisions for their operations and their customers. The results include greater contract compliance, more agility to react to the marketplace and customer demands, more effective promotional programs and opportunities to share in “group” savings as a result of economies of scale.

So how does a food service distributor, manufacturer or restaurant chain open up their proverbial supply chain books to its partners? The easiest approach is to join an existing network of trading partners. In the interest of full disclosure, I must tell you that ArrowStream has built the nation’s largest Network of restaurant chains, distributors and manufacturer businesses-over 4,000 trading partners and growing. Clearly, ArrowStream is biased when it comes to the advantages of working within a trading partner network, but let me just give you some stats on why we are certain it’s advantageous, extremely advantageous, to all foodservice businesses:

• All members, every single one, of the ArrowStream Network has gained 2-6% bottom line savings as a result of joining. And this is just the beginning into the opportunities of economic integration.
• Over $37 million in customer rebates flow across the ArrowStream Network.
• $15 billion in product (representing over 10% of the industry) moves across the ArrowStream Network annually.
• Network members have access to over 32,000 lanes and see their full truckload rate increase after joining

When a foodservice organization joins in an existing supply chain network, their supply chain data integrates with the network platform and therefore the data of participating trading partners. The barriers to information sharing fall easily without requiring extensive negotiation and the establishment of a new framework for managing and sharing information. The message here is that technology and extensive, established networks are available to foodservice companies that are ready to lose some of the secrecy in order to win a lot of visibility, cost savings and agility.

Watch for ArrowStream’s coming posts on Trading Partner Openness Tenets 2, 3 and 4 and be sure to let me know what you think of Tent 1: Working within a Network.

Lessons in Critical Supply Chain Issues for the Foodservice Industry 

At ArrowStream, we pride ourselves on being experts in our customers’ supply chain and business operations. We also know that there is always more to learn, which is why we host the ArrowStream Customer Conference each year. Who better to help us better understand the hard work and critical needs of supply chain management than our customers-the ultimate, inside-the-game experts?

On September 20^th this year, food service industry supply chain business leaders from across our client base gathered in Chicago to delve deep into the issues having the greatest impact on their operational efficiency and bottom-line success. Every one at the Conference learned-our service teams, our technology experts and even our clients walked away with numerous ideas on how to use supply chain management technology and resources to improve their businesses today and tomorrow, and to confront the challenge of the current recessionary market. I had an inspiration as ArrowStream has been working the lessons of the Conference into the solutions, services and tools we provide - “We should share these lessons and findings with the whole industry-our clients, those we want to be our clients, our partners and, yes, even our competitors because these insights can help us all make the entire supply chain ecosystem even better”

So here they are-the core findings of the 2009 ArrowStream Customer Conference. I hope this knowledge makes a positive impact on your supply chain planning, decision-making and results.  Given that every one of the participants uses ArrowStream’s software and data network a substantial part of the discussion centered on how to further use technology to enable scale, agility, and success in the supply chain.

Finding 1: Business Process Performance Is King
Our customers are competing in the toughest marketplace they’ve known. Customers wield enormous power as they look for the best value for their diminished pocket books. Foodservice business executives agreed that keeping costs down while meeting rising customer demands is the great, perplexing challenge they face today. How do you deliver the variety, value and safety customers seek and reduce costs?

To meet those demands, businesses must continue to increase and maintain the highest levels of operational efficiency. A foodservice company cannot achieve that goal without world-class supply chain management. Every point and every partner across the supply chain affects operational efficiency and the supply chain is the network of processes and people that unites them. A business would do very well to use the supply chain as a pathway to greater efficiency-analyzing each process and partnership across the system to ensure top performance, efficiency and results. Realizing the importance of this strategy, many of our conference participants are seeing investments in their supply chain organization remaining the same or increasing in 2010. Clearly supply chain has taken on new strategic importance in the face of the most difficult market of the last 25 years.

Finding 2: Overwhelmed by New Products & SKUs
At the Conference, business leaders also spoke to the common challenge of introducing and managing new products along the supply chain. One client said that they had introduced a record number of new products to the marketplace this year as they work to compete and win customers in this challenging economy. The difficulty, of course, is managing and tracing this rapidly expanding product portfolio, which puts enormous pressure on teams that are often already over stressed.  We discussed a number of examples where Technology was the key element in helping supply chain teams scale to effectively meet this challenge with little or no incremental overhead.  We also discussed how the same technology is helping all business operations manage and make the very best decisions in terms of new product management, costing, and delivery.  

Finding 3: Reducing Spoilage, Improving Traceability  
Restaurant chains that reduce spoilage and improve product traceabilty are safer, more responsive better foodservice providers in the minds of their customers and the industry. To achieve this essential goal, businesses need better data and far better integration with trading partners-especially with their global manufacturing partners and distributors. Bottom line? Businesses must integrate product management data up and down the entire supply chain to be able to quickly and effectively respond to food recalls and safety issues that could seriously damage customer confidence and the business brand.

Finding 4: The Technology Beacon
Technology has taken the central role in solving many of the issues today’s food service industry businesses face along the supply chain. Businesses will continue to look to technology to address their pressing challenges (such as traceability and spoilage reductions). The food service companies that are thoroughly integrating their supply chain systems and the rich data it provides into their organizations are going to lead the pack in industry innovation and establishing greater competitive advantage in the marketplace. Those that extend the reach and advantage of their supply chain management solutions to integrate trading partners will clearly be on the leading edge of this innovation. Our customers shared some of the innovative approaches they are taking to leverage our technology to address their challenges. For example, one customer had enrolled their distributors into the ArrowStream data network so that all ordering and receiving into their store locations was 100% electronic.  This resulted in tremendous labor cost savings and billing/pricing accuracy improvements for our customer.

Finding 5: Global Identification, Greater Efficiency
Almost all participants expressed a strong belief that a global identification standard would dramatically improve product management and logistics for all partners across the supply chain.  They all voiced strong support for GTIN standardization. While the global industry works towards GTIN standardization, businesses must rely on innovative supply chain technology systems that can consolidate diverse codes into a manageable, smart and effective supply chain management system. Businesses that do are winning big gains in efficiency over competitors who are still saddled with manual data entry and the cost of maintaining redundant systems just to keep pace with business flow.  In today’s marketplace, no one can afford the additional expense of multiple data systems and stores to manage their supply chain.

Because of their importance, we will be exploring some of these topics in great detail in upcoming blogs. The goal is to show how today’s technologies, and the increasingly strategic role of the supply chain, will help businesses meet and beat their toughest challenges. Until then, share with us what your greatest supply chain concern is or where you think technology needs to go to help foodservice businesses grow, innovate and lead in this difficult but opportunity-rich time.