September 9, 2008, 12:00 AM

How Papa John’s squeezes costs out of its web-enabled distribution system

Despite surging fuel costs, Papa John’s says it is cutting costs out of its distribution network by using a web-enabled transportation management system to better control the movement of trucks into its 10 distribution centers.

Katie Evans

Managing Editor, International Research

Despite surging fuel costs, the Papa John’s pizza restaurant chain is cutting costs out of its distribution network by using a web-enabled transportation management system to better control the movement of trucks into its 10 distribution centers, the company says.

“We certainly have recognized pretty substantial costs savings,” says Susan Kinder, director of operations services for PJ Food Service Inc., a subsidiary of Papa John’s International Inc. that oversees all freight traffic into the pizza company’s more than 2,700 restaurant locations as well as its distribution centers. “With the cost of fuel at $4-plus per gallon, any kind of savings adds up pretty quickly.”

Papa John’s has implemented a suite of transportation management and related supply chain software from Manhattan Associates Inc. This technology gives it more direct control of the sourcing and routing of carriers hauling goods from about 85 suppliers scattered around the U.S. into its distribution centers, which also are located throughout the country.

Now, instead of relying on suppliers to handle transportation and tack the costs onto their invoices, Papa John’s can choose the most efficient carriers and coordinate pick-ups and deliveries for the most efficient truckloads and routing, Kinder says. Papa John’s has about 80 trucks arriving at its distribution centers daily.

“In the past, our 10 distribution centers ordered their own products but weren’t looking to see how they could consolidate product deliveries with other centers,” she says. Papa John’s now manages all inbound freight for its distribution centers from a central web-enabled transportation management system in Louisville, KY, where the system works in concert with a Manhattan Associates demand planning and replenishment system.

Next year, Papa John’s will extend the reach of its new transportation and supply chain suite to also improve the movement of goods from its distribution centers to its more than 2,700 restaurant locations in the U.S.

In 2010, Papa John’s expects to realize additional system improvements and cost savings when it deploys a Manhattan Associates supply chain intelligence application that will integrate with the transportation and demand planning/replenishment systems. The combined system will identify additional ways to better match goods from suppliers with the demand of particular distribution centers and individual restaurants, Kinder says.

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