The organisation that sources and selects equipment for Subway’s vast store network says it will leave no stone unturned in its quest to find the right supplier partners for franchisees.
European Independent Purchasing Company (IPC Europe), the Buckinghamshire-based non-profit-making organisation collectively owned by Subway franchisees in Europe, manages more than £1.5 billion worth of contracts and oversees the purchase and supply of Subway specified and approved food, packaging, equipment and business solutions.
This year it has appointed Hobart as an approved supplier for commercial dishwashers and True Refrigeration for reach-in refrigeration, with both agreements involving extensive background work before being finalised.
In the dishwasher case, IPC started off with an initial supplier list of 26 names that it whittled down to three names before commencing a planned three-month trial period that was actually extended to nine months.
Laura Bird, equipment and decor purchasing manager at IPC Europe, said the organisation takes a thorough approach to entering new supplier relationships.
“We don’t bring on lots of suppliers quickly — there is extensive qualification required. We have a category management process that we follow internally, taking us all the way through from understanding our true business needs, market analysis, options generation, contracting and then developing the supplier relationship.
“We must make sure that we build these relationships for longevity and we go into them with the mindset that they are strategic partner agreements. We stand by our mission statement ‘to help Subway franchisees be more profitable and competitive — today and for the future’ and we have a responsibility to ensure the deals we put in place are right.”
Mrs Bird said that the extended trial period that took place during the dishwasher selection process actually worked to its advantage as it gave the team a chance to reinforce the technical parameters that franchisees required and see firsthand how operators integrated it into their kitchen operation.
“We used it as an opportunity to do added fact-finding and to further understand how our franchisees used their dishwashers — what added benefits they were gaining from the equipment and what steps would we need to take to ensure the roll-out was successful? We used this feedback to help us shape our thinking in terms of the controls and features of the machines.”
Subway is not the only major international chain that implements a stringent process for bringing on new suppliers. Burger King UK CEO Alasdair Murdoch recently revealed that the chain operates a globally-approved supplier list and while the UK operation can apply for new suppliers to join this list, the complexity involved in securing approval means it has to be absolutely worth it.
The diligence that IPC prides itself on is also a reflection of the sheer volume of stores it serves. Some 5,400 stores currently fall under its remit as it currently stands, with the European business targeted with growing at a rate of 500 stores a year.
The UK accounts for 2,400 units, of which 100 of those now feature the new Subway ‘Fresh Forward’ branding following a successful pilot in Manchester Piccadilly.
Asked what the next area of equipment the company is focusing on, Mrs Bird was giving little away: “As a team we have a list of ideas to help bring more value to our Franchisees. We are fully committed to ensuring our suppliers are correctly embedded in the system to support our franchisees, so we are definitely going to be kept busy!”