Chipotle's supply chain turnaround is in full effect
- Chipotle has built a new supply chain team and made several operational changes in order to stage a comeback after the restaurant chain's food safety issues reappeared in the form of a norovirus outbreak in August, which reportedly sickened 700 people.
- Carlos Londono, the new head of supply chain, was tapped for the role in the spring of 2018. "Our new supply chain team is now fully in place and we set to find efficiencies later in the year by strategically reviewing this sourcing of all of our ingredients," CEO Brian Niccol said on a recent earnings call.
- In addition to a revamped supply chain team, the company has increased the frequency of food safety training in restaurants and changed some cooking and preparation procedures to increase speed and safety.
Chipotle's food safety issues over the years have had a wide range of causes resulting in various illnesses being traced back to the restaurant chain. Salmonella and E. Coli are more likely to stem from contaminated raw produce and inadequate cooking or prep, while norovirus is generally spread by sick restaurant staff and improper hygiene. All three have caused major outbreaks in Chipotle customers in recent years.
CEO Brian Niccol is relatively new to the company, coming on board just one year ago, but he's receiving wide praise for revamping back of house processes and being more open about the company's operations than former CEO and founder Steve Ells. The company's old ways of staying "quiet and defensive" had harmed the brand, Niccol said at the ICR investor conference in Orlando earlier this year.
Operationally, Niccol instituted a program called "Focus Prep" — a preparation protocol that keeps the number of staff prepping the food to a minimum, theoretically diminishing the risk. The chain has also transitioned more preparation out of the restaurants to a central kitchen over the years to minimize the amount of actual cooking that happens in-house.
Chipotle is also focused on reducing turnover, so quarterly food safety training accumulates within the restaurant staff.
Digital supply chain tracking tools have been a part of Chipotle's rebuilding strategy as well. In a 2017 presentation, Arturo Tanus, Chipotle's Food Safety Manager, explained the company tracks its produce from the farm to the restaurants using FoodLogiQ software to provide more visibility.
Follow Emma Cosgrove on Twitter