Culver’s partnered with supply chain solution provider Armada to reorganize and improve its distribution network efficiency as the restaurant chain targets expansion.
The fast-casual restaurant chain aims to open up to 55 new locations annually over the next three-to-five years, expanding growth into new markets such as Pennsylvania, New York and Oklahoma, according to an Aug. 5 press release.
However, scaling means more complex supply chains, including more locations, suppliers, inventory and freight, Armada CEO Chris O’Brien told Supply Chain Dive in an email.
Culver's already has a supply chain team of its own as well as a distribution network, but what changed was scale, O'Brien said. But as a company that uses many suppliers and operates more than 900 restaurants — with plans to expand into several new state markets — it's not easy to connect those moving parts, he added.
Consolidation is key as slower-moving products can become expensive to manage as a network grows, O’Brien said. Armada currently manages transportation on several supplier-direct lanes for Culver’s.
“Slow moving products don't consistently fill truckloads, forcing distributors to carry more inventory than they want," he said. "Redistribution solves that by pooling inventory and creating more efficient freight flows.”
Redistribution also positions inventory closer to where demand exists, reducing freight movement and improves product availability.
“We sit at the intersection of suppliers, distributors, transportation providers, and restaurant demand, which gives us visibility into how those pieces interact,” O’Brien said.
Frozen redistribution is already live across two of Culver’s Southeast and Midwest nodes, O'Brien said. Both cover every distributor and restaurant in that region's footprint.
A dry redistribution program is also currently in development, O'Brien said.
"Redistribution is the foundation,” O’Brien said. “Everything else builds on it, and we'd rather get that right before we widen the scope.”
