Case #7

Large International Quick Service Restaurant Chain

Problem

Quick Service Food Retailer had multiple manufacturing plants throughout North America. 

A benchmarking analysis showed that none of the plants were competitive compared to the best-in-class manufacturer. 

A strategic review indicated that manufacturing was not a necessary core competence.

Solution

We assisted in negotiating a strategic outsourcing alliance with a major competitor who had world-class competencies in manufacturing. 

Key issues were negotiated, including a long-term global strategy, logistics, supply management, coordination of investments, and integration of information services.

Results

The rollout program proceeded rapidly. 

After 12 months, the program was nearly six months ahead of schedule. 

Manufacturing costs were reduced by almost 15%, logistics were substantially improved, and ROA increased dramatically by closing some plants, and shifting ownership of some older manufacturing plants to the strategic sourcing partner, who proceeded with major upgrades to the facilities.