As you can see from the above chart, Chris Michael's has two channels of distributors. The Food and Beverage distribution channels, come from many different companies. For Food they may use US Foods, Sysco for dry goods. Steaks, fish and sushi grade fish are all order from many speciality providers due to the cost competition that is conducted among the different companies. They have around 20 different distributors in the food channel.
The beverage channel of distribution, Chris Michaels orders from over 20 different distributers for non-alcoholic, wine, beer, and liquor. Many of the distributors are exclusive to certain items, which means they can only order that product from that one distributor.
Having many different supplier is somewhat difficult to the extent that Chris Michael's managers and chef must have extra concern to there most valuable products they keep on hand.
Their inventory turnover ratio is around 2.35, which in the restaurant industry is normal. The industry average is between 2-5 times depending on how diverse the menu is and how much the price point is. (IBIS WORLD)
Inventory Turnover Ratio
Responsive Supply Chain Design
Chris Michael's has a responsive supply chain design. Everything they do is a make-to-order or a design-to-order process. They purchase the raw materials from distributor then they receive the custom food or drink orders and lastly they assemble the final product and deliver it to the customer.
Recommendations
- Some ways to improve on their supply chain design, is try and consolidate who and where they order from. Try and get certain companies to supply them with all the products they need; and the specialty products can be order from specialty suppliers.
- Another recommendation is to create relationships with local producers and farmers and buy from them. Sometimes if a restaurant orders from national distributors, they are at the mercy of what the wholesalers wants to supply in quality and price. This type of supply chain that helps the local suppliers and farmers is Supply Chain Sustainability and Humanitarian Logistics.
Supply Chain Sustainability and Humanitarian Logistics
Using this kind of supply chain will not only help the company have a sustainable future but they can lower there cost. Recently, Chris Michael's has been switching to LED lighting products which has a energy usage rating of 1/5 the voltage of what they are previously using. With this huge capital investment in sustaining their energy, they will produce less of a carbon footprint onto the earth.