McAlister’s Corporation (www.mcalistersdeli.com), a 185-unit quick-causal chain based in Ridgeland, Mississippi, offers 100 menu items in 19 states in the South and Midwest, generating annual system wide sales of more than $200 million. Since the opening of a single deli in 1989, the fresh, “made-to-order” deli concept has experienced rapid franchise growth and has been recognized by INC Magazine as one of America’s fastest-growing, privately-owned companies.
- Distributors controlled access to food spending information where purchasing transaction data was in the language of the distributor and made McAlister-specific reporting requests difficult and time consuming.
- The prospect of changing distributors compounded the issue of not owning the data and made the vendor negotiation process problematic and lengthy
- There was a lack of visibility to aggregate food spending and product movement information necessary to maximize vendor negotiation opportunities. This was due to an inability to create ad hoc reports by manufacturer and restaurant locations.
- Both supplier and franchisee relationships lacked the benefit gained from clear, fact-based decision-making.
McAlister’s has pursued a rapid and successful growth strategy over the past 5 to 6 years, aimed at attracting new franchisee groups and franchise-owned locations. In order to maintain this level of growth, McAlister’s needed to provide automation to improve the purchasing and distribution process in order to provide maximum value for each of the franchisee partners. Specifically, they needed to be able to verify that invoices were being matched to the contracted purchase price without burdening franchisee management with the administrative overhead associated with the task. Additionally, given the growth of franchises, McAlister’s required timely ad hoc reporting capabilities that was distributor neutral. Purchasing needed to accurately show food spending patterns by franchisee and by location to ensure buy-in by managers to corporate purchasing decision-making.
Tibersoft offered McAlister’s the benefits of a dedicated solution: accuracy, speed, and flexibility.
McAlister’s over-riding requirement in a new solution was having the flexibility to report on compliance issues and aggregate food spending based on their own naming conventions and information needs without regard to who their distributors were. Their evaluation of automated solutions lead them to choose the proven technology and services from Tibersoft. Tibersoft’s formula for success - flexible ad hoc reporting, rapid implementation process and foodservice operator expertise - far surpassed other available options and exceeded McAlister’s expectations.
The overriding benefit derived thus far for the corporate purchasing is the confidence they feel when meeting with suppliers and franchisee partners. “Confidence best describes how we all feel about the ability to answer the important aggregate food spending questions that always come up during face-to-face meetings”, says VP of Purchasing, Iris Holloway. Aggregate spending can be viewed through the structure of the company: franchisee, corporate, regionally and by locations.
This means that for suppliers, purchasing is always armed with the facts on aggregate spending for all items providing hard evidence for decisions made and for future procurement plans. For franchisee managers, purchasing can access real-time ad hoc reports to show exactly what they are using and not using by location and help in internal planning and evaluation of future spending and product usage projections.
With the data chaos removed, purchasing adds more value to operations, finance and the entire franchisee community. As Iris Holloway adds, “I can answer most questions in 15 minutes or less and that is very empowering to all of us.”
The Early Returns:
McAlister’s has realized significant returns and impressive benefits to date:
- According to Phil Friedman, CEO of McAlister’s, “We expect annual savings of as much as $200,000 for our franchisee’s operations”.
- All trading partner and franchisee interactions are well informed. Iris Holloway, McAlister’s VP of Purchasing sums up the overriding benefit as “confidence in the decisions we make and answers we provide our partners.”
- McAlister’s implemented the aggregate spending reporting capabilities for suppliers and franchisees in less than 3 months.
- McAlister’s can now maximize their leverage with their suppliers by having accurate, up-to-date purchase history information readily available to answer any questions and support any management decision.
- Internal product planning has been significantly enhanced by having accurate and timely data available almost immediately.
||The benefits for McAlister's
||Operational in 90 days
||"We expect annual savings of as much as $200,000 for our franchisee’s operations."
– Phil Friedman, CEO