Supply Chain Strategy of Subway

Executive Summary

Supply chain management is very important for organization getting successful in its industry. The following essay has chosen Subway Company as an example and analysis the fast food industry supply chain structure and Subway's new "green" strategy in its supply chain management. This report used academic sources to research Subway's sustainable development and indicates what aspects should Subway improved in the future.

Company Profile

Subway is the international famous brands in the world which operates fast food businesses. It has about 35,000 branches in the world and nearly 25,000 opened in the United States. So it causes Subway to become largest enterprise in the American quick-serve industry. It persists to provide healthy food, uniform sales standard and open service to consumers that guarantee every customer can get best service in the Subway regardless of where it is. The most important is Subway also focuses on its supply chain management to get benefits. Especially in the last three years, Subway adopted "green" logistics strategy that has cut carbon emissions by 120,000 metric tons and reduced oil emissions by 277,000 barrels annually (Fitzgerald, 2009). Meanwhile, the transportation cost is decreased. This new "green" supply chain strategy has played an important role in Subway's development plan. So how does Subway apply this concept to practice? Following words will detailed analysis of Subway's new supply chain management strategy.

Supply chain strategy

In 2006, the top management of Subway Company decides to develop a new operation strategy that becomes the greenest fast food restaurant in the world by taking waste and inefficiency out of the system in four areas: energy, efficiency, resource conservation and waste reduction. The main goal of strategy is to reduce carbon emission or transportation cost and enhance the effectiveness of supply chain management. How will Subway use this "green" vision into practice? Let's go through Subway operated business in United States. Subway prefers to find local producer and procuring raw materials locally now instead of suppliers which are far away from their shops. Many Subway branches in United States has long distances from their suppliers and all of drinks or meats and breads are transported from only one fixed place to their shops before 2006. So this cause transportation cost is very high, and subsequently more oil consumption. In addition, long distance transportation also can not guarantee that food is fresh. Today, the company has been making great improvements for adopting this strategy.