Efficient Foodservice Response (EFR) is an industry-wide effort to improve efficiencies in the foodservice supply chain. The blueprint for the project was the industry report, Enabling Profitable Growth in the Food-Prepared-Away-From-Home Industries, which was published in early 1997. The report documented $14.3 billion in annual supply chain savings that may be achieved across five strategies - Equitable Alliances, Supply Chain Demand Forecasting, Foodservice Category Management, Electronic Commerce, and Logistics Optimization. Each of these areas was addressed through the development of committees comprised of senior industry executives. These working groups guided a number of research projects to define possible solutions in achieving efficiencies in these areas.

Five foodservice industry associations sponsored the EFR Project, including

• Canadian Council of Grocery Distributors
• International Foodservice Distributors Association
• International Foodservice Manufacturers Association
• National Restaurant Association
• GS1 US (formerly the Uniform Code Council)

Where Does EFR Come From?
EFR is, quite simply, the path to simplify product flow, information flow, and funds flow within the foodservice supply chain.

It is derived from two sources. First, it comes from the Quick Response model employed by the soft goods market, an electronically based system for accurately tracking inventory. Second, Efficient Consumer Response (ECR) revolutionized the grocery industry. Through the use of such strategies as cross-docking, category management, continuous replenishment, activity based costing and electronic data interchange, efficiency in the retail grocery supply chain has been greatly improved.

In fact, it was on one stormy January day in Buffalo, NY that a group of foodservice supply chain members met to discuss the applicability of ECR in foodservice operations. They identified critical issues within the framework of the value chain's operations that needed to be addressed. Issues such as transactional inefficiency, inefficient plant scheduling, out-of-stocks and substitutions, and expedited transportation—to name a few.

Now that the need was determined, the next step was to quantify the opportunity. An exhaustive study by CSC Consulting and Stanford University identified $14.3 billion in potential cost savings through the use of existing technology and efficiencies. The ad hoc group, consisting of brokers, manufacturers, distributors, operators and representatives from related industry associations, worked with pioneers from the ECR initiative to develop a model specifically for the foodservice industry.

They identified a goal: to educate industry members on how they can use available tools and execute their unique business strategies to enhance consumer value.

The Five Strategies of EFR
Efficient Foodservice Response is based on five distinct strategies that include a number of interrelated initiatives. Each strategy, in and of itself, can affect your business—economically and operationally. And while each strategy targets specific problems, it is as a whole that EFR maximizes strategy benefits. It is important, though, to note that it is not necessary to implement EFR all at once. EFR is not an end in itself, it is a journey.

Strategy 1: Equitable Alliances

• Mutually beneficial business practices. The Equitable Alliances strategy is based on the idea that by reducing non-value-added costs, trading partners, and in the end the consumer, benefit.
• Activity based costing (ABC). Through this process, trading partners can get to know the true cost of functions within their own operations. With this knowledge, they understand the cost of doing business, from placing an order to correcting a mis-shipment.
• Initiative bundling. Trading partners make an investment in technology that the others will benefit from, and these are bundled together so that all trading partners may gain.
• Value based incentives. This concept provides clear economic incentives to participants for reducing the costs of their business transactions with trading partners.

Strategy 2: Supply Chain Demand Forecasting
The driving principle behind this strategy is that each member of the supply chain is ultimately driven by the same demand source--the consumer. The strategy involves the flow of demand and planning information in both directions within the supply chain.

• Standard Product Identification and Bar-coding. Bar codes on unit, case and pallet packages provide the communication brokers framework for logistics processes and information systems that act as connectors between manufacturers, distributors and operators. Bar codes are a predicate for many of EFR principals. Standard product identification is a fundamental bar-coding concept and crucial to EFR's effectiveness.
• Common product databases. An evolution of bar-coding, this initiative calls for the creation of a central network from which buyers and sellers can access consistent product information.
• Demand data sharing. This represents a direct link between supply chain trading partners and consumers. Opening the flow of information about consumer foodservice sales back up the supply chain will allow distributor and manufacturer trading partners to plan accurately.
• Market-level forecasting. Suppliers can reduce inventory as more accurate and complete demand information allows them to better manage production and replenishment cycles.

Strategy 3: Electronic Commerce
This strategy can have the most immediate effect in reducing operating costs and error and transaction cycle time. It is a pivotal EFR principle.

• Simplified business practices. The sale of products can be a simple three-step process: order, shipment, and payment.
• Product maintenance electronic data interchange (EDI). Accurate product, price and promotion information, readily available up and down the supply chain.
• Revenue cycle EDI. Smooth, continuous information flow through the use of automated, standardized transaction formats.
• Invoice-less payment. Payments can be made electronically without physical invoices when trading partners have the right information at the right time.

Strategy 4: Logistics Optimization
Through the forging of strategic alliances and the implementation of "common sense" tactics, product is efficiently transferred from points of supply to points of consumption and the supply channel becomes a streamlined and more efficient machine.

• Direct shipment. For fast-moving products, the most cost-effective and efficient transportation may be direct shipment from manufacturer straight to distributor.
• Slow-mover consolidation. Slow-moving products from many suppliers can be consolidated at a redistribution facility and shipped together as full truckloads.
• Shared distribution. When two manufacturers have less than a truckload and share the same destination point, they can cut waste from the system by coordinating and sharing transport space and cost.
• Coordinated transport. Maximizing the transport routes so as to accomplish multiple tasks.
• Cross-docking. Coordinating delivery and pick-up times, production schedules and demand cycles to create a system in which there is no need for storage at a distribution point.

Strategy 5: Foodservice Category Management
Another important principle of EFR is efficient management of product categories. Foodservice category management provides tools to assist companies in enhancing consumer value by balancing variety and costs.

• Balanced variety. Improved product varieties can be achieved through cooperation between operators and their distributor trading partners.
• Product deletions. Understanding when sales of a product amount to less than costs is a key in evaluating product retention.
• New product introductions. Technology and market information should be used to gauge the timing and likelihood of market receptivity to a new product.
• Centralized conversion. Moving food preparation tasks to the most efficient point in the supply chain is an important concept. Fully prepared or partially prepared produce is a good example of this initiative in action.