Abstract
This chapter discusses the supply chain management (SCM) of the foodservice industry in Japan. For a restaurant to grow by developing a chain and opening multiple stores, it needs a supply chain that links the central kitchen, manufacture and direct sales, and cold chain. Therefore, using Saizeriya, a major restaurant chain in Japan, as a case study, the authors identify Saizeriya's management strategy, supply chain model, and its functions. Although Saizeriya is in the restaurant industry, it has adopted the business model of speciality store retailer of private label apparel (SPA), which is prevalent in the apparel industry. In this study, the authors clarify how the company has improved the efficiency of its supply chain while controlling the effects of the rising costs of raw materials and logistics.
TopIntroduction
This chapter discusses SCM in the food industry based on the case of Saizeriya, one of the largest restaurant chains in Japan. In restaurants, cost and freshness are so critical that SCM will determine the restaurant’s fate. Saizeriya is a company that has fully embraced “Specialty store retailer of Private label Apparel (SPA) ” and has an excellent track record in taste and profit.
The Global Supply Chain Forum (GSCF) defines supply chain management (SCM) as follows. Supply Chain Management integrates critical business processes from end users through original suppliers that provide products, services, and information that add value for customers and other stakeholders (Douglas, Martha,2000). The supply chain includes not only the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves (Sunil & Peter, 2014). Mawson & Fearne (1996) describes SCM as “It seeks to achieve a relationship of mutual benefit by defining the organizational structures and contractual relationships between buyer and seller, which up until now have been classified as adversarial.” A company's supply chain comprises geographically dispersed facilities where raw materials, intermediate products, or finished products are acquired, transformed, stored, or sold and transportation links that connect facilities along which products flow (Jeremy, 2006). The actual activity of a supply chain is often a two-way exchange on a network structure rather than a linear chain activity. In other words, the overall picture of a supply chain is more of a network structure than a chain, and SCM is an activity that comprehensively manages these activities (Higuchi, 2018).
Business management is based on the flow of cash, both incoming and outgoing, and the faster the cash flow, the more stable the business entity. SCM is management that increases the speed of cash flow, and it also aims to increase the rate of cash turnover within a company to improve its health. Therefore, the critical management index of SCM is ROA (return on assets) to evaluate profitability.
Figure 2.
Impact of SCM on cash flow
In today's world, supply chains are becoming more widespread and internationalized. It is not uncommon for vegetables and other industrial products from overseas to appear in domestic markets and on dinner tables (Higuchi,2018). With that background in mind, this chapter clarifies the models and functions of SCM specific to the food service industry. It presents various distribution models, including food ingredients, to give the reader new insights. As a case study, it explains the business model of Saizeriya and how it functions, revealing the efficiency of the supply chain in the restaurant industry.
Key Terms in this Chapter
Management Principles: Considering cause and effect relationships observed in every phenomenon that occurs in a store with numerical or objective data.
Industrial Engineering: A method of scientifically analyzing processes and work contents to pursue the best production control methods.
Central Kitchen: A central kitchen is a cooking facility that centralizes the food preparation process to achieve efficiency.
ROA: The ROA shown in this chapter is different from the ROA in accounting. The numerator is the cash flow of the supply chain operations.
Single Operation: A single person running the kitchen at a Saizeriya restaurant. In order to allow non-cooks to cook alone, he or she will be primarily responsible for only warming and serving food sent from the central kitchen. There are no knives in the kitchen of Saizeriya.
Platform: It refers to the corporate management infrastructure for sustainably creating corporate value related to the entire logistics process, including facilities, transportation, and logistics processing.
SPA: SPA refers to a business model that eliminates SCM waste by vertically integrating the entire process from planning to manufacturing and sales of fashion products, thereby enabling a quick response to consumer needs.
Cold Chain: A distribution system that keeps perishable foods at low temperatures during the production, transportation, and consumption processes and refers to a low-temperature distribution system.
SPFB: SPFB refers to a new model introduced in the food service industry based on the SPA model popularized in the apparel industry and is a business model that integrates upstream activities such as the procurement of raw materials.
Location Creation: Finding locations where other companies will not open stores but where you can open your own stores, or creating locations where you can open stores by improving your business model.
Person-Hour Productivity: This is calculated by dividing the store's gross profit generated in a day by the total working hours of all employees working that day.