Instill Marks 10th Birthday

Foodservice supply chain specialist offers visibility as weapon against industry inefficiencies

Redwood City, CA  February 14, 2003  Instill Corp., a provider of supply chain solutions for the foodservice industry, this week marked its tenth birthday and said it is now processing $10 billion annually in purchases through its Data & Analysis and Procurement solutions, with more than 20 restaurant chains and seven of the top 20 foodservice chains using the solutions in efforts to reduce costs through supply chain visibility and control.

Instill tracks purchases from 1,500-plus distribution points for more than 68,000 restaurant locations across the United States and Canada. The provider said that by providing a source of supply chain data for the industry, its solutions enable foodservice customers to more easily find savings in areas such as purchasing compliance, stock-keeping unit (SKU) rationalization and price variance.

Some of the operators using Instill services include Applebee's, Fine Host, Sodexho, SUBWAY Restaurant's Independent Purchasing Cooperative and Yum! Brands Unified Foodservice Purchasing Coop.

Six years ago Instill's flagship product was ordering software. Today the provider is primarily a data service with a suite of procurement and business intelligence solutions supported online. The company said that by focusing exclusively on the foodservice industry for the past 10 years, it has developed core industry assets such as the largest foodservice SKU database and the largest network of distributor center connections.

"Instill acquires product information from different sources with disparate product codes and then transforms the raw data into actionable information," said Bob Schafer, senior director of integrated procurement systems at Sodexho. "This type of efficiency, visibility and control was previously unavailable to us or anyone in the foodservice industry."

The foodservice industry has performed better than many sectors of the economy, continuing to grow at moderate, but steady, rates over the past two years, according to industry consultancy Technomic. "The industry has, therefore, been able to fund continual improvements in using technology to improve information delivery as well as drive down costs," said Ron Paul, president of Technomic.

At the same time, the consultancy asserted that significant supply chain inefficiencies in the industry are restraining item level profitability in the foodservice distribution channel. In fact, a recent study by Technomic and Willard Bishop Consulting revealed that more than 50 percent of items carried by broadline distributors are unprofitable for them.

"This finding should be a rallying cry for manufacturers and distributors to work together on more effectively managing product mix and inventory levels," said Paul Weitzel, vice president at Willard Bishop.

Instill asserted that its integration of information technology and industry knowledge is able to deliver value to foodservice companies, and at least on restaurant analyst agrees. Allan Hickok, managing director and senior research analyst for US Bancorp Piper Jaffray said, "Instill is driving the type of meaningful operational efficiencies that save their customers real money and ultimately contribute to better profitability and higher shareholder and stakeholder values."