Background
When one of the world’s largest quick-service restaurant brands faced a major supply disruption of its fries last year. HFM was tasked with creating a swift, cost-effective resolution. With sales and operational stability under threat, HFM needed to provide alternative supply sources rapidly for its client so sales could resume quickly and ensure mimimal disruption.
HFM’s Solution and Response
HFM swiftly implemented a multi-faceted crisis response plan, with key actions including:
- Product Diversion: HFM reallocated available stock from other markets, moving close to 50 containers across Asia: 23 from the Philippines, 7 from Singapore, 14 from Hong Kong, and 5 from Taiwan.
- Contingency Supply Activation: An additional 50 containers were sourced from the contingency supply in China.
- Airfreight Deployment: To bridge the immediate supply gap, HFM arranged one week’s worth of stock to be airfreighted, allowing markets to resume sales within just six days, compared to the standard purchase order lead time of eight weeks.
Challenges and Key Considerations
A total of 25,000 cases were transported, with HFM successfully navigating several complex
logistical challenges:
- Loading Slot Availability: While the supplier consistently advised product availability, HFM proactively collaborated with suppliers to secure and protect airfreight loading slots.
- Airspace Utilization: By leveraging existing cargo flights and utilizing backhaul options, HFM avoided chartering expensive jumbo jets on high-capabity routes (e.g. Los Angeles – Korea), efficiently reducing costs while ensuring timely delivery.
- Warehouse Constraints: HFM collaborated with airfrieght providers to stagger pallet releases to alleviate tight storage conditions and ensure seamless transfers from the airport to distribution centers.
- Handling Capacity: Shipments exceeding 5,000 cases created additional handling challenges at the airport, so HFM carefully managed airport planning to maintain smooth operational efficiency.
A pivotal cost-saving decision by HFM was to avoid hiring charter planes. Instead, HFM leveraged underutilized flights from the USA to Asia and repacked shipments in specialized cocoons, enabling steady, scalable supply with a faster turnaround than chartering jumbo jets, which would have taken up to 21 days.
HFM also managed the reverse logistics of 120+ rejected containers back to the USA, ensuring efficient returns while maintaining operational flow.
Results
- Rapid Market Recovery: Fries sales resumed within six days, compared to the standard eight-week lead time.
- Cost Efficiency: By limiting airfreight to one week’s stock, HFM avoided an estimated $8 million (USD) in expenses.
- Operational Effectiveness: Utilizing existing flight routes and specialized packaging minimized storage capacity issues at airports and ensured a steady, swift supply of products.
Key Learnings and Strengths Demonstrated
This case highlights HFM’s strategic agility, operational expertise, and deep understanding of
supply chain management, showcasing its key strengths of:
- Proactive Crisis Management: Anticipated the client’s needs quickly, coordinated solutions, and executed approriate contingency plans to minimize disruption.
- Cost-Conscious Decision-Making: Strategically balanced urgency with financial efficiency by avoiding costly air charters.
- Cross-Market Collaboration: Ensured swift execution across regions by effectively coordinating with relevant stakeholders across the supply chain
- Scalability and Flexibility: HFM’s flexible approach ensured supply continuity while quickly adapting to evolving challenges.
Through this experience, HFM reaffirmed its commitment to providing resilient and cost-effective supply chain solutions, empowering clients to overcome unexpected challenges with
confidence.
