Supply Chain World - Volume 7, Issue 3 - 33

five guys food & beverage

it came to transport," he recalls, adding that logistics can
comprise 7 to 10 percent of a company's costs.
But the fact that Five Guys' suppliers were using their
own transport companies meant "we didn't know who they
were, and they differed by shipment. There were no standardized guidelines established," Lee explains. "The cost
inefficiencies were repetitive and adding up - whenever
there was a large gap in cost, we would go back to the suppliers, negotiate and change the carrier base."
Lee explains, often times the company's suppliers did not
have a robust transportation department, so out of ease,
they would reach out to common brokers who unfortunately charged higher costs.
"The objectives of the parties were not aligned, and
unfortunately the resulting costs were being passed onto
us," Lee says. "Transportation is all about efficiencies so
partnering with carriers that fit your shipping lanes is key."
These efforts paid off for Five Guys. "We were able to see
significant cost savings the first and second years, amounting to $6 million, and we had greater control and service
because we knew which carriers we were using," he states.
"Unbundling the transportation cost allowed us to uncover the true cost of the product," Lee says. "This empowered my Procurement department to do proper benchmarking and negotiate more effectively."

Keeping a Close Eye
Under Lee's leadership, Five Guys has integrated stateof-the-art technology into its supply chain. This included
the recent addition of Sensitech Inc.'s TempTale GEO, a
real-time temperature monitor that has been implemented
in all of its trucks.
"The visibility is critical to our supply chain since our value rests on maintaining a fresh concept," Lee says. "Therefore, inventory is kept low with just-in-time processes for
many key items."
Not only does TempTale GEO tell Five Guys where the
vehicles are, but also if the temperatures of the cargo fall
outside of safe levels. "Whenever the temperature is out
of spec, my team gets a notification," Lee says, adding that
Jade International is a comprehensive freight management company serving

clients for over 30 years. We have three core values: Integrity, Hard-Work, and Community. Our services include air and ocean export/import, foreign to foreign, and domestic. With our agent networks, we have capabilities in most countries worldwide.
Jade specializes in exporting perishable, frozen, and dry goods making us a sure
fit for Five Guys. Jason Lee and his team value the vendor relationships and work
hard so all parties have a complete understanding of Five Guys' requirements and
goals. The staff are highly communicative and a pleasure to work with.

VOLUME 7, ISSUE 3 Supply Chain World

33



http://jadeintl.com/

Supply Chain World - Volume 7, Issue 3

Table of Contents for the Digital Edition of Supply Chain World - Volume 7, Issue 3

Contents
Supply Chain World - Volume 7, Issue 3 - Cover1
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