5 Questions With…Tom Lyons

5 Questions With…Tom Lyons

In the new feature, 5 Questions With…, Tom Lyons, vice president, national sales, education for Sysco Corporation, talks with us about the supply chain disruptions, why they’re happening, what we can do to alleviate the pain, and how long we can expect to experience disruptions.

Tom has been with Sysco for nine years and assists Sysco’s local teams with their education business nationally. He has a Bachelor of Arts from the University of Colorado Boulder and has been in the foodservice industry for over 30 years, beginning post-college as a restaurant manager in San Francisco. Prior to Sysco, Tom worked in various roles with BSI (Brass Smith Inc.), The Stero Company, and Ecolab.

What is the greatest challenge Sysco is facing today?

Like many across the industry, Sysco is dealing with the impact of labor and supply chain shortages. This has been driven, in part, by the strong “snap back” in demand since COVID-19 restrictions were lifted. Sysco took early action to prepare and invest in products and people to meet this anticipated increase in demand, but demand has rebounded earlier and stronger than anyone expected.

As we work through with the current challenges, the silver lining is this robust industry recovery demonstrates the long-term health of our industry. The restaurant sector of our business is near full recovery, with local sales and cases shipped up vs. 2019 volume levels.

Why are we facing supply chain disruption?

There are multiple dynamics at play. First, the shift in demand: when the pandemic hit, the foodservice demand declined substantially overnight and the food supply chain dramatically shifted toward retail grocery. This had multiple down line affects:

  • Growers dedicated to the foodservice supply chain had no market for crops. Produce is perishable and retail grocers could only take so much additional product.
  • Manufacturers had to pivot their manufacturing lines, their people, their processes, and their deliveries.
  • Packaging production lines that were previously dedicated to larger pack sizes had to shift to smaller packaging or stopped production.
  • Consumers demanded more individual serving sizes for sanitary reasons or for takeout and healthcare and education customers also demanded more of these items for individualized meal service to patients and school children.

Second, there’s been a long-term shortage of truck drivers that existed pre-COVID.  According to the A.T.A. (American Trucking Association), the trucking industry currently is short over 100,000 drivers.

Third, the delta variant is fueling more outbreaks across the country that cause disruption in production lines. In addition, safety protocols in food production requires social distancing, which means fewer workers on production lines. This is driving tight supply for items that require more processing, such as deboning cuts of meat.

With supply chain challenges so prevalent across the board, what can people do today to help alleviate the pain?

Be proactive and have a plan in place. You must be flexible. Menus must be simple and adaptable. Know what you have in inventory. Stay informed of supply chain issues. You should be forecasting six to eight weeks out and sending your supplier a list of items you anticipate ordering. This allows your vendor time to tell you what they are unable to get, so you can plan for something different. Operators may not be able to serve the same menu now that they were serving pre-COVID.

Consider adding alternate products to your system. For your key items list – your top 100 items – you should include several substitutes. For example, if your liquid egg product is not in stock, then you need to choose a product for your distributor to use as an alternate. Work with your RDs to vet nutrition information. (Sysco’s resources can also support.) If you proactively select substitutes for products and add them into your account, communicate those changes to us. If there isn’t a preapproved substitute for a product in the system, we may cut it from the order. We can’t ship what we don’t have in the warehouse.

It’s critical to look at the big picture and be proactive. During the pandemic, many campuses began preparing and offering meals to go. While this was a safe, convenient alternative for students, it created extra costs in disposables. If you add a fork, knife, and spoon package with salt and pepper, a bag and plastic container for the sandwich, along with a bag of chips and bottle of water, you’re going to add a dollar to your food cost. If you’re doing 20,000 meals a day and half of them are to go, that’s $10,000 per day – and that adds up. In addition, it creates extra waste. That’s a big issue because instead of cleaning out the garbage cans once or twice a day, your trash cans are overflowing by 11:00 a.m. Now you have a trash issue that you didn’t have before. Looking at the big picture and anticipating problems can go a long way to help minimize extra costs and strains on resources.

Thinking about the supply chain and the future, will it get worse before it gets better? When do you expect things to return to normal?

We are confident the supply chain will normalize, but it’s difficult to see now how long that may take. Certainly, we think that some changes will stay with us, specifically the importance of takeout and delivery formats. These trends were in motion pre-COVID with the rise of food delivery services. Those trends are here to stay.

From the perspective of the driver shortage, innovation is required to address the long-term impacts. This is why Sysco recently announced plans to establish Sysco’s first-ever driver academy to increase our long-term capabilities to internally source future driver talent.

What are you focused on next?

In regard to the current labor and supply chain shortages,

  • We continue to work closely with current and new suppliers to increase product availability of the most critical items you need. This includes proactively sourcing alternative products so that our sales teams can offer solutions that work best for your business, as needed.
  • In addition, we have aggressively expanded our hiring efforts, including making substantial investments in both referral and sign-on bonuses and retention incentives, and ensuring our wages are competitive in the marketplace

At the same time, we’re focused on enhancing our customer experience through our Recipe for Growth strategy. This includes:

  • Investing in new digital capabilities
  • Enhancing our merchandising and strategy
  • Creating a more nimble, accessible, and productive supply chain
  • Improving the effectiveness of our sales organization
  • Continuing to invest in programs that advance our CSR goals

Are you experiencing supply chain or labor issues at your organization? Watch our on-demand webinar, Overcoming Foodservice Supply Chain Challenges, featuring a panel of experts from Gordon Food Service Canada, Sysco, and US Foods. You’ll learn how these distributors are dealing with the supply chain issues, and how you can be proactive in making changes at your organization to provide an improved customer experience.

Have questions about how to be proactive in changing your menus or utilizing your CBORD system to assist with forecasting and alternate selections? Contact us today to talk with a representative.