The importance of service levels

Many suppliers do not provide the necessary service levels or appreciate the difference between wholesale for foodservice and for retailers, according to Damien Barrett, commercial director of Henderson Foodservice in Northern Ireland.

He said: “It is amazing how many suppliers think delivering within a few weeks of when we wanted a delivery is okay. Or cannot understand why we have a problem with being out of stock of a core line for long periods of time without any communication.”

Barrett pointed out that customers blamed Henderson, not the supplier, when they could not deliver requested items.

He said: “Foodservice is not retail where if you run out of one product you can face over with similar products. Foodservice customers have specific menus and cannot change them.

“Our customers demand 100%. We aim to achieve 99%. Average inbound service to us is 93%. The worst is 77%.”

Henderson pointed out the correlation between service level and sales, and added: “Imagine how much more sales growth you will get if you just get your service level right.”

He said that the best suppliers engaged with his company and worked to understand its needs and its customers. “They invest in us through not just terms but with resource working on the ground with our sales team learning about how to satisfy customer needs. These companies have worked with us in putting long-term comprehensive plans in place to grow the collective business through category management, unique initiatives, supply chain management, information sharing, end user development and telesales interaction. There is a trust between us which is the most important thing of all.”

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