Understanding Foodservice GPO Volumes: A Lesson from the World’s Largest Pork Producer
The Wild West. That’s how Brooks Friedman, Senior National Accounts Manager at Smithfield Foods, describes managing his data in the past. And, while there’s an excitement to the vast unknown, when dealing with foodservice data, that uncertainty makes meaningful analysis nearly impossible.
“We would get these huge dumps of data from our GPO and Contract Management Customers, and it was up to us to sift through it and pull out the relevant data,” says Brooks. It left his company vulnerable to the double dipping so prevalent in the foodservice industry today.
On average, 5% of trade spend on non-commercial operator segments is lost to double dipping every year. Getting a clear picture of GPO billing and eliminating duplicate payments can have a big impact on a foodservice manufacturer’s bottom line.
As the number one producer of packaged pork products in the U.S., and with thousands of distributors to track, Brooks knew Smithfield’s chances of overspending due to double dipping were high. He needed the right tools to identify instances of duplicate spending and stop it from happening in the future.
- Identify double dipping from any number of claimants, i.e. distributors and GPOs simultaneously, with a dashboard view prioritizing highest dollar issues.
- Remove duplicate payments. Dollars saved or reallocated are automatically tallied against the bottom line.
- Prevent future duplicate spending by applying rules to future claims.
Brooks explains: “We’re no longer completely reliant on GPOs and their data. We can provide that insight with our own data, which makes us a better resource to our customers. Now we help them understand the what, why, and how of member purchasing when it comes to our products.”
“Access to this streamlined Contract Management Customer GPO customer data has been invaluable to Smithfield because it allows us to analyze current volumes by region, DCs, and products, manage rebates and bill backs and drive growth.”
Taming the Wild West of data management is an approach that’s working for Smithfield. “Our 2018 Foodbuy in core categories is up 6.2% over 2017 numbers,” adds Brooks. And, it’s an approach that can be mirrored by any foodservice manufacturer, large or small.
We had the pleasure of sitting down with Brooks at our Navigators Conference last September, where he discussed his two main challenges: 1) How to manage all of the data flooding in from distributors and rebate claims, etc., and 2) How to make sense of Smithfield’s product volumes at large Contract Management and GPO customers.