Business process re-engineering may not be much fun to go through. But it could be the necessary leap companies have to take to survive.
In an era dominated by change, from the blurring of traditional class-of-trade distinctions to the implementation of the industry's Efficient Consumer Response initiative, companies are being forced to re-evaluate and reshape their organizational structure and how they operate.
"The steel industry, the auto industry, banking, insurance -- they've all had their turns [at this] in the last 15 or 20 years, and now it's our turn," said Bill May, vice president of management information
systems at Spartan Stores, Grand Rapids, Mich.
Re-engineering is a "must-do" for the supermarket industry today, he said. "You have to keep constantly changing. It's all driven by competition, and survival is the goal. The minute you rest on your laurels, people will drop back again, so you have to keep thinking about how to reinvent yourself."
Robert Stauth, chairman, president and chief executive officer of Fleming Cos., Oklahoma City, firmly agreed. "The reason it's important is because of the pressure to lower the cost of goods delivered, which is greater on the wholesaler now than it has ever been before.
"We have to try to keep our customers viable as they compete against alternate formats and well-capitalized chains. So we are taking a different look at how we do what we do. It's a matter of survival, quite honestly," he said.
The chief benefit of business process re-engineering at Fleming, according to Stauth, is "eliminating layers of bureaucracy and fiefdoms so we can focus on our customers." Fleming's cultural mind-set now is concentrated on efficiency, he said.
Although the competitive forces prompting companies to undertake the internal restructuring process known as business process re-engineering is affecting all segments of the industry, wholesalers, in particular, face some of the greatest and most immediate pressures to alter their business operations.
Under the industry's far-reaching ECR initiatives -- projected to slice $30 billion in costs from the distribution pipeline -- massive changes in how products are shipped, stored and otherwise handled could have a thunderous impact the wholesaler's role in the industry.
Further, wholesalers are facing a potentially serious threat from third-party operators seeking to set up their own information-driven cross-docking networks, outside of the conventional wholesaler-distribution structure.
But wholesalers are fighting back, with business process re-engineering often the first step that must be taken. Here are the steps and plans two of the leading wholesalers are taking in the area to meet the food retailing challenges in today's fast-paced industry.