Dunkin' Donuts signs long-term supply chain deal
Dunkin' Brands, Inc., the parent company of Dunkin' Donuts and Baskin-Robbins, announced that they had signed a long-term, performance-based agreement with National DCP (NDCP) to be the exclusive supply chain provider for all Dunkin' Donuts restaurants in the continental United States.
The agreement, which was effective the first of the year upon the merger of the four existing regional franchisee-owned cooperatives into one national cooperative, offers numerous financial savings and service-improvement benefits to Dunkin' franchisees, including:
- A long-term agreement with Dunkin' Brands for the procurement and distribution of products;
- A more streamlined system that will provide significant future cost-efficiencies for the franchise community;
- A consolidated Cooperative board structure, and;
- Greater consistency in supply and distribution service levels to all U.S. restaurants.
For Dunkin' Brands, the agreement allows the company to realize the benefits of a long-term, performance-based procurement and distribution agreement. Most importantly, the agreement supports the company's domestic expansion plans by providing franchisees in new markets with the same product costs as franchisees in the more highly built-out, established Dunkin' markets. Uniform product costs will be phased in over a three-year period beginning in 2012.
“This agreement is a momentous one for Dunkin' Brands and for existing, new and future Dunkin' Donuts franchisees,” said Neil Moses, Dunkin' Brands Chief Financial Officer. “In addition to securing our franchisees' role in the Dunkin' Donuts supply chain, it will result in significant cost savings, a higher level of service, and, in the near term, uniform product costs for franchisees across our domestic restaurant network.
“This is a huge step forward toward our goal of continuing to drive store-level profitability in newer markets and accelerating the expansion of Dunkin' Donuts across the U.S.”
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With almost 7,000 Dunkin' Donuts restaurants in the U.S. today, the company has said it has plans to more than double its current number of restaurants in the U.S. over the next 20 years.
Since the 1970s Dunkin' Brands has utilized franchisee-owned regional distribution centers to supply products to its domestic Dunkin' Donuts franchisees, but the costs of those supplies, historically, would vary depending on the concentration of restaurants and other distribution requirements. Under the new agreement, uniform costs will eventually be charged across the core distribution area so franchisees in areas with fewer restaurants will not pay a premium compared to franchisees in areas with more stores.
In return, the Dunkin' Donut franchisee-owned cooperative will be assured that, provided they meet certain performance-based requirements, Dunkin' Brands will use them as the sole procurement and distribution partner for domestic Dunkin' Donuts restaurants.
“We are excited to announce the formation of this new national entity and our long-term agreement with Dunkin' Brands to be the exclusive supply chain provider for all Dunkin' Donuts restaurants in the U.S.,” said Kevin Bruce, NDCP Chief Executive Officer. “Our mission is to provide our members – the Dunkin' Donuts franchisees – with the very best purchasing and distribution service in the industry.”
Edited by Kevin Scarpati
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.