Background
The client operates within the fast-food production and delivery sector. They sell roughly 25K meals per day (2020 data). With the COVID-19 restrictions the company had seen a strong growth on the demand for their products. Aspiring to be the solid supplier and to withstand this increase in demand the delivery network needed to be redesigned. Hence, the client invited XPR Consulting to help them shape the restaurant chain logistics strategy.
Our intervention
We followed a three-step approach; map the current situation, identify and implement quick-wins, define strategy and assist client during implementation.
For the mapping phase, we analysed historical sales data, delivery data and mapped current working processes being implemented in-between order entry, food production and delivery. During this phase we set some key KPIs which were implemented immediately on the client’s side.
Most of the new practices implemented related to the rationalization of area coverage for food delivery, fleet utilization, routes utilization, and order entry processes. These practices apart from having direct impact on the business started giving the client and us better visibility.
Guiding questions throughout the consulting process
- Should we have use in-house transportation means?
- Should we have a long-term contract with a partner? If so, how do we assure quality deliver in a timely manner?
- Should we have a combination of both?
As a strategic orientation our role was on taking a decision whether the delivery shall be held in-house or sub-contracted. If so, which would be the financial, business and service quality aspects to track to ensure long-term contribution to the bottom-line of the company.
Such decision was supported by detailed the strategic approach and breaking it down into a 5-year tactical plan for the company.
results
Statistics tracked after 6 months of project implementation.
During the quick wins definition, we managed to improve turnaround time by 9%, increase order-entry capacity during peak-times by 6%, decrease fleet costs by 4%.
Long-term strategic decision we expect to increase bottom-line contribution by 7% per year (Year 2 of project implementation) and improving the NPS score from 62 to 70 within 6 months.