Overview of Subway sandwich chain
Discuss about the Sustainability Into Supply Chain Management.
Supply chain management is related to the management of the flow of services and goods which also involves the storage of the raw materials of the various operations of the organizations. The interlinked or the interconnected networks, node businesses and channels combine in provision of services and products that are required by the end customers of the supply chain. The supply chain management process is based on the designing, planning, executing, controlling and monitoring of the various supply chain based activities. The marketing channels play an important role in the supply chain management process of the organizations (Beske & Seuring, 2014). The sustainability and the risk management related activities are thereby integrated with the supply chain management activities of organizations.
Subway is a privately owned fast food restaurant of the American origin. The organization had become one of the fastest growing franchises of the entire world. The organization has more than 45,000 stores in the year 2017 in around 100 countries of the world. Almost greater than half of the total number of stores of Subway are located in the US. Subway is considered to be the greatest single-brand chain of restaurants and the largest operator of restaurants in the world. In the year 2017, the Subway Group of companies has been organised in the following manner, Subway IP Inc. is the owner of intellectual property for restaurant system. The headquarters of Subway is located in Milford, Connecticut with around five regional centres which support the international operations of the company (Subway.com, 2018). The regional for the European franchises are situated in Amsterdam, New Zealand and Australia. The first Subway restaurant was established on the West Coast in Fresno, California. The organization thereby expanded its operations in other countries of the world which includes, UK, Australia, Canada, North America, Brazil. The report will be based on the analysis of the supply chain management related activities that have been conducted by Subway in the various international operations of the organizations (Subway.com, 2018).
The supply chain and procurement related process that has been used by Subway has the enabled the restaurant chain to save 184 million Euros. The procurement approach of the organization had started in the year 2001 had formed an organization which was specifically meant to serve the brand. The organization has around 2000 stores in Ireland and the United Kingdom and more than 4000 stores across 33 countries in entire Europe. The offices of the restaurant chain were located in France, Germany. The supply chain operations of Subway in Europe were controlled by The European Independent Purchasing Company (EIPC). The organization is responsible for the supply chain related operations of the Subway restaurant chain (Brandenburg et al., 2014). The distributors of the Subway franchisers were also controlled by EPIC. The purchasing director of the organization was responsible for the overall growth of the restaurant chain and its franchises. The organization operates under an agreement with the headquarters of Subway to provide the company with the supply chain and distribution related facilities. The organization opened a sandwich shop in the year 1965. The organization grew in an exponential manner and had formed 42000 stores all over the world. The success of Subway was related to the calculated approach that was taken by the organization related to the coordinated type of supply chain. This had led to the increased efficiency of the supply chain related activities of Subway in the entire world (Genovese et al., 2017). The company which had first supplied bread and ham to Subway was still supplying products to the organization even after its huge growth in the entire world. The major strategy that has been applied by Subway is related to the global purchase of raw materials that are required for the production of the various items in the menu of the restaurant chain. Subway has used the supply chain based methodologies which were traditional in nature and many innovative technologies were also employed by the organization. The supply chain of Subway is classic and quite innovative in nature. The implementation of food growing cycles was quite difficult for an organization like Subway (Jacobs, Chase & Lummus, 2014). However, the organization was able to deliver the same amount of freshness in all the restaurants and franchises that are operated all over the world. The supply chain transparency and visibility that has been developed by Subway has been a major positive point for the fast flourishing organization. The four major steps that were taken by the management of Subway to ensure the transparency of its supply chain are,
- The management had assigned Global Trade Item Numbers or GTINs to the branded products of Subway and the manufacturers of the organization were also asked to do the same. This helped the organization to maintain the visibility of the information that was related to the various products that were manufactured and supplied to the customers. This practice had become the foundation of the entire supply chain traceability related objective of Subway (Mangan, Lalwani & Lalwani, 2016).
- The global data that was available for the use of the company was synchronised with the help of the global data synchronization network of Subway. This process helps in the electronic transfer of information between the various trading partners of the organization or the fast food chain. The use of information has thereby provided mutual benefits to the organization and its suppliers.
- Another step that has been taken by Subway to improve the visibility of the supply chain was the proper labelling of the products that are offered to the customers all over the world. This has also helped the organization in improving its relationship with the various suppliers (Martínez-Jurado & Moyano-Fuentes, 2014).
- The last and final step taken by Subway in the aim of improving the supply chain related activities was related to the integration high level technologies in the different organizational processes. This has helped the organization in tracking the shipments in an effective manner on the online portal that has been created for this purpose (Meixell & Luoma, 2015).
Supply chain management of Subway sandwich chain
Subway has been a steep decline in its sales in its sales in the recent years which has led to the huge struggle of the company to generate sales that were expected from the restaurant chain. The unit count of the organization has also declined in the last two years which has led to the closing down of more than 300 locations of the restaurant chain in the world. The major reason behind this decline of Subway in the restaurant industry was mainly related to the reduction of the same store sales of the company. The unit growth of the food chain has also slowed to manage the lost sales of the organization in the industry. The aggressive growth of Subway in the entire world has led to the loss that it has been faced by the organization in the business market (Monczka et al., 2015). The restaurant company has been able to emerge from recession quite strongly. However, the huge growth of the organization in the market has affected the profits of the restaurant chain in the existing stores. The heavy reliance of the restaurant on the discounts that it provided to the customers has caused the decline of its sales. The reduction of the sales of the organization has also affected the supply chain related activities of Subway. The restaurant chain is mainly known in the industry for fresh raw materials that are used by them in the products that they offer to the customers (Pagell & Shevchenko, 2014). The loss in the sales has further affected the procurement process of the raw materials that are used for the production of the items that the organization offers to the customers. The competitive market of food products like sandwiches had further affected the sales of Subway to a great extent. This has put pressure on the supply chain of the organization as the investments that were to be made in these activities had reduced to a great extent (Power & Simpson, 2016).
The recommendations that can be provided to the organization so that it can improve the supply chain related activities are that Subway needs to reduce its reliance on heavy discounts for the purpose of promoting its products. The organization needs to upgrade its products that are offered to the customers so that it can provide tough competition to the other organizations in the industry. The fast food chain needs to increase its suppliers in the market so that the fresh raw materials can be sourced in an easier manner (Schoenherr & Speier?Pero, 2015). The organization needs to implement more new technologies in the supply chain so that the speed of the activities can further increase. The closure of the huge number of stores in the various international locations of the organization has created huge pressure on the successful operations of Subway. The organization therefore needs to create a strong local base of suppliers so that it is able to source the appropriate materials from the local areas as well. This will further be helpful in reducing the procurement related costs of the organization (Schönsleben, 2016).
Subway sandwich chain’s supply chain and supply chain management concepts and practices
The Subway restaurants are mainly known in the market for providing fresh food products to the customers. The nutritional value of the various food items on the menu of Subway restaurants is also quite high. The responsibility related to the procurement of the products, ingredients, equipments, services and supplies for Subway is placed on Independent Purchasing Cooperatives or Companies (IPCs). The organization is dedicated to provide support to the franchises in a sustainable manner with the help of its procurement partner. The supply chains of the organization have been streamlined in such a manner so that standards related to food safety and the sustainable sourcing practices can be implemented. The health of the population of the country where the organization has its operations depends on the health of the environment (Stadtler, 2015). The sustainability related efforts of the organization has increased in the last few years. The restaurant chain has reduced its consumption of resources and the emission of the greenhouse gases. The five key areas which have been the major focus of the organization are sustainable sourcing practices, food safety and food quality, local sourcing, sustainable sourcing practices, streamlining the supply chains (Wang et al., 2016). A large number of the suppliers of the organization belong to the farming families and the local produce is supplied to the for the purpose of manufacturing the various food products. The seafood and the poultry suppliers of Subway also work in a sustainable manner and this has reduced the environmental footprint of Subway. The organization has shown its commitment towards the sustainable operations and usage of raw materials that are also produced in a sustainable manner. Local sourcing of products in some of the area of its operations has enabled the organization in reducing the costs that are related to the production process (Wisner, Tan & Leong, 2014).
Conclusion
The report can be concluded by stating that Subway has been successful in creating a well-developed supply chain which is applicable for the successful operations of the organization in the industry. The supply chain of the organization has led to the rapid growth of Subway in restaurant chain industry. The organization had however faced some serious challenges that were related to the management of the supply chain. The aggressive growth of the restaurant led to loss of sales in some of the areas. This resulted in the closure of units and further exerted immense pressure on the profitability of the organization. The sustainable nature of the supply chain however helped Subway to continue its operations in the market in an effective manner.
References
Beske, P., & Seuring, S. (2014). Putting sustainability into supply chain management. Supply Chain Management: an international journal, 19(3), 322-331.
Brandenburg, M., Govindan, K., Sarkis, J., & Seuring, S. (2014). Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), 299-312.
Genovese, A., Acquaye, A. A., Figueroa, A., & Koh, S. L. (2017). Sustainable supply chain management and the transition towards a circular economy: Evidence and some applications. Omega, 66, 344-357.
Jacobs, F. R., Chase, R. B., & Lummus, R. R. (2014). Operations and supply chain management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain management. John Wiley & Sons.
Martínez-Jurado, P. J., & Moyano-Fuentes, J. (2014). Lean management, supply chain management and sustainability: a literature review. Journal of Cleaner Production, 85, 134-150.
Meixell, M. J., & Luoma, P. (2015). Stakeholder pressure in sustainable supply chain management: a systematic review. International Journal of Physical Distribution & Logistics Management, 45(1/2), 69-89.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.
Pagell, M., & Shevchenko, A. (2014). Why research in sustainable supply chain management should have no future. Journal of supply chain management, 50(1), 44-55.
Power, D., & Simpson, D. (2016). Aligning Goals and Outcomes in Sustainable Supply Chain Management. In Sustainable Value Chain Management (pp. 161-172). Routledge.
Schoenherr, T., & Speier?Pero, C. (2015). Data science, predictive analytics, and big data in supply chain management: Current state and future potential. Journal of Business Logistics, 36(1), 120-132.
Schönsleben, P. (2016). Integral logistics management: operations and supply chain management within and across companies. CRC Press.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Subway.com (2018). Retrieved from https://www.subway.com/en-us
Wang, G., Gunasekaran, A., Ngai, E. W., & Papadopoulos, T. (2016). Big data analytics in logistics and supply chain management: Certain investigations for research and applications. International Journal of Production Economics, 176, 98-110.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A balanced approach. Cengage Learning.
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