Supply Chain B. Goode

Oct. 22, 2004
Music and memorabilia-surround visitors to Hard Rock Cafs around the world. And many diners commemorate their meal with a souvenir. But putting inventory

Music and memorabilia-surround visitors to Hard Rock Cafès around the world. And many diners commemorate their meal with a souvenir. But putting inventory on the shelves of 113 restaurants is a challenge.

"Each is unique," explains Tony Paladino, director of distribution, planning and logistics for Hard Rock Cafè. "They're unique in their physical appearance and their footprint. Some Cafès have traditional loading docks, most of them do not.

"We turn our inventory quickly, and because we have no backrooms to speak of, we have very little stock room space," Paladino says. "I can't miss a week without going to a Cafè. If I have a Friday delivery and I miss it, that means I've got to UPS overnight for a Saturday delivery. That is one of the cardinal sins - that I miss a delivery."

Until five years ago, Hard Rock Cafè used multiple carriers. The result was a hodgepodge of service levels and pricing that was nothing to sing about.

Consolidating carriers
So Paladino's team spent a year looking for a carrier that could help Hard Rock Cafè manage its transportation and supply chain across all distribution channels --the Cafès, Hard Rock Casino, Hard Rock Beach Club, Hard Rock Hotels and an online store.

"We actually saw every major carrier, every regional carrier, outlined our delivery profiles and had everyone bid on it," Paladino says. "We had to weed through a lot of carriers ... to come up with one that could actually meet our windows and service levels," Paladino says. He selected Roadway Express.

"They handle the majority of our Cafè deliveries. We have total visibility through their [online] system of where our freight is. At any time, our people can go in and check on the deliveries. We electronically send them a copy of their order, as well as the carrier's ETA. Through, we're able to get that information."

The first noticeable change was in those missed deliveries. "There was a huge expense for expedited freight that's gone away now," Paladino says, estimating the savings at more than $500,000 to date.

"The operational line is you always want to cut expense out, but you can't sacrifice service," Paladino says. "

Roadway has been a really good partner --taking a look at our business."

Getting creative
In a current initiative, Roadway is working to reduce costs and increase efficiency for vendors clustered around Hard Rock's California distribution center (one of six worldwide DCs) by helping the vendors coordinate and consolidate their shipments, rather than shipping independently.

Another venture aims to ease construction delays and cost overruns in the scheduled openings of seven properties over the next 24 months. The problem, Paladino says simply, is that things like carpet tend to show up after tables and chairs have already been moved in.

Now, construction materials will be sent to Hard Rock's distribution centers, and Roadway will execute delivery of equipment in a carefully planned sequence designed to make the build-out work run smoothly.

"We're a good customer because we're a growing company," Paladino says. "Each year we have incrementally more freight to deliver. I think we've been very good partners."

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