Introduction
A company can only be successful in the market if its operation is free from significant defects. That is why one can suppose that smooth internal processes indicate the effectiveness of a firm. It is necessary to analyze the performance to determine ways of how it is possible to achieve better outcomes. In some cases, improvement opportunities are apparent because of a company’s problems, while it can be necessary to conduct a substantial analysis to identify them in other situations. Thus, the purpose of the given paper is to explain ways to enhance internal processes in Chipotle’s supply chain with evident issues and in Panera’s one without a major public problem.
Chipotle’s Supply Chain Flowchart and Commentary
Chipotle is a famous restaurant chain that is scattered across the United States. In 2015, however, it witnessed a crisis when its customers were sickened with “Shiga-toxin-producing E. coli 026 (Berfield, 2015, para. 3). The flowchart above demonstrates how Chipotle generally supplies its restaurant chains in various states. Even though it seems elementary, the real state of affairs is different from that, and the structure and performance of the supply chain have resulted in the contamination crisis described above.
It is so because the business under consideration “has about 100 suppliers for its 64 ingredients” (Berfield, 2015, para. 16). Furthermore, this figure does not include local farms that also supply some products, including meat, to Chipotle’s restaurants. These two sources of products have resulted in the following disputes. On the one hand, Berfield (2015) states that the contamination problem “most likely originated with one of Chipotle’s big suppliers, not one of the local farms” (para. 19).
On the other hand, Balakrishnan (2015) argues that local farms are the source of contaminated ingredients because these farms fail to meet quality standards. Even though it is challenging to state which idea is right, the two of them stipulate the necessity to make Chipotle’s supply chain smaller and more professional. In addition to that, the problem becomes even more severe because the restaurant chain does not reveal a large part of its suppliers, which raises a few questions.
In addition to that, Chipotle’s general principles that have made it famous and competitive also contributed to the crisis. It relates to the claim that the restaurant provides its customers with food with integrity, which denotes the use of fresh products and classic cooking techniques. In other words, one can state that Chipotle deals with unprocessed and unfrozen products to provide its clients with organic food. As a result, the restaurant draws attention to everything mentioned above instead of microbial safety (Berfield, 2015).
The information above means that it is necessary to improve Chipotle’s supply chain. Firstly, it is required to invest in achieving the highest possible quality of products. That is why one should draw more attention to checking the food that comes from suppliers. Secondly, it is necessary to reduce their number because the elimination of variability will make it easier to identify a source of a problem if one emerges. Finally, Balakrishnan (2015) emphasizes that it is reasonable to eliminate any personal relationships from a supply process to make the whole chain more professional and competent. The flowchart below will demonstrate the necessary steps and decisions that can enhance the supply process at Chipotle.
According to the flowchart above, it is more reasonable to deal with big suppliers and limit their numbers. It is so because this cooperation will be professional without a focus placed on personal relationships. Then, it is necessary to check the quality of products delivered before their acceptance. If they are of decent quality, they are placed in a distribution center. In the opposite case, the suppliers should obtain their food back. In addition to that, it is reasonable to comment on food processing. As Berfield (2015) states, it is suitable to add cilantro and blanch vegetables for 5-10 seconds to destroy all microbes. To conclude, one can say that these improvements to the supply chain under analysis could help Chipotle avoid the crisis.
Panera’s Supply Chain Flowchart and Commentary
It is impossible to deny the fact that Chipotle’s food contamination crisis has had a significant impact on the market. On the one hand, this event has allowed customers to understand that it can be dangerous to take the company’s slogans for granted. As a result, the situation has led to a more significant focus placed on food safety at numerous restaurants. On the other hand, the scandal has happened, and Chipotle’s competitors have obtained an opportunity to have a competitive advantage in the market. Among a high number of rivals, Panera has managed to achieve successful results because this restaurant chain reports that it only uses clean and healthy ingredients. This idea is supported by the fact that Panera does not have any public problem or scandal concerning its products.
The company has managed to create the image above with the help of its peculiar supply chain. It relates to the fact that Panera uses the No-No List to make its products healthier. Jones (2015) explains that this list allows the restaurant to eliminate “all artificial colors, flavors, sweeteners, and preservatives” from its menu (para. 2). This step is necessary to make sure that the chain works with products of high quality.
The integration of the No-No List in Panera’s supply chain is a complicated process. According to Jones (2015), the business draws significant attention to three phenomena, including the source of ingredients, their processing, and whether they are necessary. It is possible to find this information through direct communication and cooperation with suppliers. For example, it is reasonable to consider a case with dressing to understand how the supply chain under consideration works. When suppliers present a new type of dressing, Panera officials study its components. Jones (2015) states that the main focus is placed on sub-ingredients that can go unmentioned.
To check it, Panera managers can ask the suppliers to consult “their own vendors to learn more about those sub-ingredients” (Jones, 2015, para. 6). When all the information is obtained, the Panera team can inform the suppliers about whether they need this dressing. The given system is successful because the restaurant chain has like-minded partners (Environmental Defense Fund, 2019). However, the information above will demonstrate that Panera’s supply chain has some space for improvement.
Firstly, the supply chain under analysis is not complicated, but it can require additional processes and decisions. It refers to the fact that it takes a while to identify and check all ingredients and sub-ingredients of supplied products, which can result in delays. Secondly, the success and sustainability of Panera’s supply chain significantly depend on the fairness of suppliers and their vendors. This fact shows that the restaurant relies on a personal relationship, and Chipotle’s case above has demonstrated that this strategy can have adverse outcomes. It means that Panera needs to formalize the relationship with its suppliers, and one can say that ISO quality benchmarking is a suitable option here. According to Jacobs and Chase (2014), the ISO standards are used to make sure that products are of high quality and free of defects.
In other words, it is rational to use ISO quality benchmarking because it will address the two issues that are present at Panera. On the one hand, this phenomenon will save time and effort because the Panera team will not need to study every ingredient. If a supplier mentions that their products meet the standards, it means that this food is free from dangerous components. On the other hand, ISO quality benchmarking will contribute to a more formal relationship between Panera and its suppliers. The flowchart below will demonstrate how it is possible to improve Panera’s supply chain.
Conclusion
The effectiveness of a supply chain has a direct impact on the firm’s success. In some cases, a supply chain can have an evident crisis or a few inefficiencies that should be eliminated to enhance the company’s performance. In other situations, however, it is necessary to analyze a business deeply to identify some issues. It has been demonstrated that the use of ISO quality benchmarking can be a useful option to improve the competitiveness of a firm.
References
Balakrishnan, A. (2015). Local sourcing: Chipotle’s double-edged sword? CNBC. Web.
Berfield, S. (2015). Inside Chipotle’s contamination crisis: Smugness and happy talk about sustainability are not working anymore. Bloomberg.
Environmental Defense Fund. (2019). Panera bread company: Restaurant chain proactively removes additives with goal of offering fast, casual, and “clean” food .
Jacobs, F. R., & Chase, R. (2014). Operations and supply chain management (14th ed.). McGraw-Hill Education.
Jones, K. (2015). How Panera Cleaned Up their Supply Chain. FoodLogiQ. Web.