What areas of logistics do you think have the most potential for Jordano and SAB

Jordano Food Products

Tracie Shannon, Vice President for Logistics at Jordano Foods (Jordano), had sent the

following e-mail to members of the executive committee of the company two years ago:

I just returned from a lengthy meeting with Susan Weber, CEO of SAB Distribution.

She is under great pressure from her Board of Directors to continue to grow market

share and improve profitability. SAB received a recent tender offer from another

larger food distributor to buy the company and several members of their board

have recommended that the offer be seriously considered. Susan feels that SAB

can continue to improve their “bottom line” with additional changes in service

offerings. Ms. Weber met with SAB’s major suppliers and customers to discuss new

services that SAB can offer to enhance the competitiveness of the SAB supply chain.

She was particularly concerned with the changing demographics of their customer

base, particularly the Gen-Y and Plus-55 age groups.

Background on Jordano Foods

Jordano Foods was founded in 1950 in Lewistown, Pennsylvania, by two brothers, Luigi and Mario Jordano. Their parents operated a restaurant in Burnham, Pennsylvania, featuring Italian cuisine. Marie Jordano was famous for her culinary skills. She developed her own recipes for pasta sauce, meatballs, fresh and dry pasta, and other Italian food items. Luigi and Mario worked in a restaurant prior to establishing Jordano Foods. The brothers felt that they could capitalize on the family recipes by selling pasta, sauces, and other related Italian food products to restaurants in nearby communities in central Pennsylvania. Their initial venture was so successful that they expanded their product line and began selling their products to small and medium-sized wholesalers and distributors through out Pennsylvania. They built a plant in Lewistown to produce their food products and subsequently built another plant in Elizabethtown, Pennsylvania, and a warehouse in Mechanicsburg, Pennsylvania.

Current Situation

The 1990s and 2000s were times of significant growth for Jordano. Mario and Luigi were still active in the company as president/CEO and chairman of the board, respectively. Revenue now exceeded $600 million per year, and a third plant had been built in the western part of Pennsylvania near Uniontown. A group of professional managers has been developed in the company to head up the major functional areas. Tracie Shannon was hired in 2010 to manage the logistics area which had not received much attention. Tracie realized that the Jordano brothers had managed and developed the manufacturing and marketing functions during the formative years, and these two areas had been considered as cornerstones of the company’s success. Logistics was a relatively new functional area for Jordano,  but had received more attention with Tracie’s vision and leadership. The vision of Susan Weber for SAB had tremendous potential for all members of their supply chain,

including Jordano Foods. Now, Tracie has to help orchestrate the transformation of Jordano

again to enable them to perform as an important part of the supply chain for SAB Foods.

She understood that Jordano has to assist SAB in meeting the challenges of the changing

demographics and the competitive threat of the larger chain stores.

Questions:

1. What areas of logistics do you think have the most potential for Jordano and SAB

to collaborate for the benefit of SAB’s customers? Why are your recommendations

important in today’s competitive market place?