Food Safety Strategies recently was able to talk to David Maloni, EVP of analytics, as well as Bill Michalski, chief product officer, at ArrowStream.
FSS: What sort of supply chain solutions do operators, distributors, and suppliers/manufacturers usually require? Has this changed at all over the past few years?
David Maloni: Supply chain has remained relationship based for decades which remains paramount. But the systems used in the supply chain have been siloed with the parties not seeing the need to act in unison. However, due to tightening manufacturing and distribution capacity, the ability for operators to act alone and squeeze cost savings out of the chain has become increasingly difficult. This is fueling the supply chain digital transformation as operators, distributors and manufacturers act more collaboratively through technology to bring value to all parties. These technologies include strategic sourcing, food quality, commodity analytics, inventory management and supply chain visibility that are bringing immense cost savings to all parties and building even stronger partnerships. The end results are the best food at the right price, sustainable deep relationships, and brand protection for all partners.
FSS: How does ArrowStream’s Commodity Market Intelligence predict future trends around commodity markets and food cost?
DM: Our team of economists digest fundamental and technical data from sources worldwide to build proprietary food and energy price and supply forecast models directed specifically for the food service industry. This enables the partners to engage all tools available to manage price volatility bringing stability to food costs and menu prices. Thus, the right food at the right price is delivered to the consumer to drive margin and sales for operators, distributors and suppliers.
FSS: Do most companies use only one ArrowStream module, or combine them?
Bill Michalski: While most operators, distributors and manufacturers face the same fundamental challenges in managing cost, service and quality, each is at a particular stage of evolution in technology enablement. ArrowStream’s modular solution is adaptable to meet current priorities, and also grow with our customers as those needs change. This is why we have restaurant chains from 50 locations to 5,000 locations relying on our applications to run their business. Most companies use several ArrowStream modules, whether from day one or because they have chosen to add modules as their business objectives grow.
FSS: What are the most popular solutions that companies use?
BM: Historically, supply chain visibility into spend and inventory, as well as contract price auditing, have been the entry points for many companies, as they seek to gain exception-based control over their growing supply networks. More recently, as our technology has made deeper partner collaboration more achievable, we have seen companies seeking to set an early best practice in how they manage quality issues or run a repeatable supplier sourcing program, and getting started with those modules as well. This path to operational excellence is no longer a road that each operator has to pave independently – we are now leveraging the scale of our network of operators, distributors and manufacturers to make it easier for each company in that network to operate at a higher level. Every new customer is tapping into a set of data connections and cross-partner collaboration applications that are already in place, and they in turn add value to that network.
FSS: How did the idea for ArrowStream come about, and how has the company changed over the years? (different solutions, etc.)
BM: ArrowStream was originally founded in 2000 based on a unique idea for how to dramatically reduce freight costs in a fragmented supply chain, by focusing on reducing the amount of empty trailer space riding on our roads. This idea grew into a proprietary technology application that optimizes and aligns order patterns across shipping and receiving points, applied in foodservice to reduce freight costs inbound to distribution centers. Today, five of the top ten foodservice distributors in the United States use our application across their networks to drive significant freight efficiencies, and our managed service offering delivers this value to others as well.
That, however, was just the beginning. We soon began exploring multiple applications for supply chain visibility, where we could translate cleansed and mapped data into operational value across the supply chain. We created a proactive, closed-loop model for pricing control and accuracy between manufacturers, operators, and distributors. We enabled operators to ensure the supply of critical and Limited Time Offer items by monitoring distributor inventories. We brought chains the ability to track contract purchasing compliance and seek opportunities to consolidate spend under contract. Importantly, we delivered each of these modules in a fully integrated application, with a powerful tile-driven interface that informed any user of the specific issues and opportunities across their supply chain that should have their focus, and the means to take action. The adoption of this application across foodservice operators has been remarkable.
More recently, we have added capabilities that leverage the breadth of our growing foodservice network, by engaging these partners in collaborative applications that drive benefits for all parties. ArrowStream’s Quality Incident Management module helps chains capture, manage, and ensure credit for product issues discovered at the restaurant, with automated workflow across all supply chain partners. Our Sourcing and Supplier Discovery modules connect operators and suppliers into a highly engaged and foodservice-specific process that helps chains find and price new suppliers to work with, and helps suppliers to showcase their full capabilities to prospective chain customers.