Promises, promises: Dot-coms can't do anything without effective delivery systems in place

Think about this: Where would Amazon.com be without UPS? For that matter, where would any of the dotcoms be without UPS? The answer is simple: They would not be in business. The beauty and appeal of the new Internet retailers is their ability to sell directly to consumers over the Internet and rely on UPS to deliver the product expeditiously to consumers.

Ease of order and ease of delivery are the key elements of that new marketplace. UPS adds further value with its sophisticated logistics and information technologies. It uses two-dimensional, case bar codes and can track any package anywhere at any time. In fact, its real value-added service is not simply package delivery, but the information it manages and controls about that package.

So what does that have to do with foodservice? Everything. Since the passing of Y2K, the foodservice industry has been inundated with every variety and type of e-commerce. "solution." Each of the companies claims to have the answer to our foodservice technology and electronic communications woes.

I challenge anyone in the industry to produce an accurate scorecard of all of those companies. They are promising to connect the distributor and operator, the manufacturer and distributor, the manufacturer and operator, and all three simultaneously.

The vision is commendable and laudable; however, the harsh reality is that all we may be doing is helping our industry communicate and order more efficiently and effectively without actually being able to deliver the product any more accurately or timely.

Unlike UPS, our industry still is debating and pondering standard product identification and case bar codes. While UPS already has graduated to two-dimensional codes, we have yet to achieve useful critical mass of one-dimensional case codes. Sure, e-commerce will help us order faster and more accurately, but once the order gets into our warehouses, it will hit the same roadblocks it does today.

Order selection, inventory count, and inbound and outbound case management still will be as technically deficient as they are now without scannable cases. Product surely will not move any faster to its destination just because the item was ordered over the Internet.

Remember that someone in a warehouse still has to retrieve the item, load it on a truck and deliver it to the restaurant operator. Order accuracy still will be at risk. Deductions still will be the ultimate remedy of choice for inaccurate order fulfillment.

Let's further analyze our Amazon/UPS example to illustrate how its capabilities could apply to our industry:

First, UPS operates in a data-rich environment. It knows where each package is at any given time anywhere in the world, and that information is accessible to its customers. Applying that capacity to foodservice, one can imagine a system where operators, distributors and manufacturers use case movement data to make educated inventory and production-planning decisions. That would result in a systemwide reduction in inventory through a more accurate match of sales to consumption. Taking that a step further, one can envision a time when a restaurant operator could turn his replenishment function over to his vendor. That would allow the operator to deploy key organizational resources in more value-added roles.

Second, as an industry, we will be hard pressed to achieve any real breakthroughs in logistics without the basic building blocks in place. UPS has been able to reduce the time it takes to deliver a package because of its distribution system. Unlike foodservice distribution, UPS does not slot products in a warehouse for picking at a later date. They are received in one end of the facility and minutes later are moved into the correct truck at the other end of the facility in a cross-docked manner. The process increases replenishment speed and velocity and reduces the costs associated with carrying inventory. It is, however, not possible without 100-percent case coding, which improves the velocity and accuracy of foodservice distribution.

At this time the e-commerce "solutions" being paraded around our industry promise only to improve the front end of an order. The Efficient Foodservice Response group still is trying to convince the industry to fix its back end and get on with standard product ID and case coding. Amazon.com has UPS to rely on to complete its consumer ordering-and-purchasing circle. Foodservice has only itself to rely on, and we are not ready to complete our Internet-based ordering circle.

So, once again, the bar code stands in our way. E-commerce is only part of the equation: Internet + X = Efficiency + Effectiveness. Solve for X. Hint: If you cannot answer this, good luck!

COPYRIGHT 2000 Lebhar-Friedman, Inc.
COPYRIGHT 2000 Gale Group