Executive Spotlight: Deane Gionta, Senior VP Supply Chain Management, Pal's Sudden Service
SCS: Tell us about roles that you have had, how you got into the business and what has brought you to where you are now.
DG: I was already in the business arena when I got out of college. I really did not know what I wanted to do except sell. So, I went to work for a food distributor, the IJ company, which was at the time the 11th largest food distributor. I was the first rep they ever hired out of college. So, my first year I sold a million. In my second year, I sold two million and this is 40 years ago, which was huge dollars back then. Then they made me a district manager over a small area and within six months they put me over their largest area, which was the Knoxville area. The way I was able to increase sales so quickly was I usually targeted a lot of the chain or larger restaurants back then. I was basically trying to sell people on a one-stop-shop early on, way before what chain restaurants do today. So, I worked at the IJ company for about five years and since I grew up in Florida, I took a job as the VP of sales for PYA Monarch in their Florida division. I stayed there for about two years, and City Provisioners bought the company out and it was like going back to the dark ages, so I decided to move back to Knoxville because that is where my wife wanted to live, and IJ hired me back as a chain representative. They had lost some of the business that I had when I was there, and I went out and got all that business back. Early on that is what I really liked to do - help and solve problems for the food distributor in order to gain business at the local chains. We had several in our marketing area. But that is not really what got me where I am today because when I did come back to the IJ company and chain sales, I think I stayed there for about two years, and then I started my own food brokerage company. When I sold it about 15 years later, we were either number one or two in the market as a food brokerage company. How I got where I am today is, Pal's was not buying a thing from my brokerage company and at the time I had a partner who was doing home meal replacement. We wanted the Pal's chili business because they were making it in the commissary. We went and made the call on Thom Crosby who owns the company and he said, "Well, I'll be glad to give you the chili business, but you've got to figure out who's going to slice my ham and chicken sandwiches and my cheese." So, what I did was I chartered a plane, we took him to the chili plant, and we took him to a couple of plants that slice meats, and that is how I started working with Pal’s, and I did this through 18 years with my brokerage company. Over the years, Thom would never just give me any business. But every time he had a problem, he would call me, and I would take care of the problem for him. Pal's is one of the largest independent chain restaurants in East Tennessee and about two years before I sold my business Thom told everyone who called on him that going forward, whether I represent it or not they need to talk to me about any supply chain issues, because I was going to be making all the decisions. So that was interesting! And when I sold my food brokerage company after a two-year merger, he asked me to come to work for him and that is how I got to where I am today.
SCS: As a large independent restaurant chain what was your supply chain experience with COVID, how were you affected by it in your work and what are you seeing now as we come out of it?
DG: Well, when I started with Pal's, we renegotiated all distribution. We went and started negotiating directly with all the vendors. We made a trip on our own dime to all our major suppliers to make sure they were culturally aligned with us and also made sure that there was sustainability. In other words, did they have more than one plant? What happens if something happens and so forth? We set that up six or seven years ago and we do not shop from supplier to supplier. So as COVID started rolling out, we went to the distributor and said look, we need you to bring in extra inventory for us. Our deal with the distributor says we can bring in up to 12 weeks of certain line items and they will hold it for us. Since we are primarily an American Hamburger Company, with our main line items, beef, and hot dogs, obviously beef and pork got very tight during that time. And so, by utilizing companies that we have done business with forever, with loyalty almost since day one, we were able between distribution, extra distribution stock, and having good relationships with our suppliers, to negate any type of outs with any products. We came close, but we were able to negate that and of course, with ground beef, it affected our chili, it affected our hamburgers, affected our pork, and affected our sausage. So, that is how we were able to navigate through it. Now, with that being said, what are we seeing now? Now it is more in packaging where we are having some minor issues. The reason that has happened is the suppliers are having labor issues and even some raw material issues. We also started within the last two years looking for dual sourcing on a lot of our major items. Not only for sustainability measures but just to make sure that we will have a supply if something happens to one of our suppliers and there is enough business in our major items. That worked out very well for us also. The other thing we have at Pal's is, we are never out of anything. Just recently there was a PC ketchup shortage. We were very fortunate that we basically were able to steer into two-ounce souffle cups and use the same ketchup but having to prepackage it ourselves rather than using the PC, but we have only been out of the PCs for maybe a week and now we are back into the PC ketchup. Again, it is because we are a loyal customer, and we do not shop around from supplier to supplier. I tell them all the time, always look at a seven percent sales increase from us organically. But you will be sandbagging because you are probably going to deliver 12 to 15 percent. The other main thing is we pay our bills. Since we have been in business since 1956, we are in a very good financial position and so there are never any issues with payment. What do I see in the next six to eight months? I still think there is going to be an issue with certain supplies. So, we are constantly in contact with our suppliers with full and open communication and we are very transparent, to make sure that if we see something on the horizon, we are going ahead and looking at it seven to 12 weeks out to take care of something before it affects us.
SCS: So, it was relationships that really saved you during COVID, if I am hearing you right.
DG: It was relationships and then also our proprietary software that enables us to be able to look out in the future to see what is going on in distribution, PO's, order fulfillment. Making sure that all the appointments are made, and appointments are being kept, and so forth. So, yes, two things have really helped us - proprietary software and then also the relationships.
SCS: So, you were ahead of the technology. You know, there is one consistent thing I have heard from people who have weathered COVID well. It is that is they had the technology in place going into the crises. I think people who did not really struggled.
DG: I have to agree with that because prior to this probably three years ago, we had written our own operating software and of course, part of that was supply chain. For Pal's, even though we only have 30 units, we design our company for efficiencies. Number one, we are 80 miles around our distribution center. We are only in two television markets so there is your media efficiency, and with our software, since we are only in one distribution center, my system pings their system every night. So, I know what is going on before they know what is going on, whether prices are going up, prices are going down, something has been discontinued, or the order did not show up. As soon as I log-in in the morning, I can get an update on everything and see where I need to help them or get on the phone and that has really been effective for us. I have even reached out to some other companies that utilized different distribution centers and everybody has told me the same thing. Unless you go to multi-distribution centers, your system is better than what most people have currently set up, just using one distribution center. Now technology for the future, what are we looking for? We have already done the GTIN labeling for sustainability, but I want to take it a step farther because we want not only traceability on it, but the computer system will go ahead and generate the orders for the stores and then once the order comes in, we want to be able to scan the bar code for traceability. We also want to be able to know AP is loading automatically and temperatures are loading into our HACCP system automatically as products come in the back door. This way we know what product came from where and what is in the stores in case there ever is a recall because I cannot rely on distribution or the vendor efficiently. So, we want to do it with proprietary technology on our side, except using the universal codes that have been developed.
SCS: So, shifting gears just a little bit back to your career, what skills have you developed, or you already possessed that helped you the most get to where you are now? And this is a two-part question; what advice do you have for people that want to follow in your footsteps in the field?
DG: I think what has been successful for me is, number one, we are very transparent with everybody. To me, the truth matters. So, if we tell somebody something, even if it hurts, we follow through on whatever we have told them or whatever we agreed to do. The other thing is, with the way we operate. If somebody calls me, I always return phone calls by sundown and I expect the same thing from our suppliers. Then the final thing is, and the store operators tell me all the time, I have very good follow-up skills and I can say not much gets by me based on our computer technology. In addition, Pal’s efficient store operator training makes me enjoy what I do. As far as what I would recommend for people in the future, I think it is a great career being in supply chain, particularly food service, because there are a lot of challenges and moving parts. There is just a lot of things that go on during the day and you are never, ever looking for anything to do but specifically, with our company, there's no chaos. The way our company is run, the way people are trained, the way we operate, you know, I might have had three phone calls today, and that is it. And none were from any of the stores. That is how efficient our proprietary operating system is. I think good follow-up skills, good organizational skills, and good computer skills are all part of what it takes to be successful with today’s global foodservice supply chain.
SCS: How do you see your job and what you are doing changing in the future? What is ahead in supply chain management in the next three to five years?
DG: I just think it is going to get more and more competitive and there are going to be less and less companies to do business with. I do think with the global economy and the way globalization is taking place that there is going to be a real focus on having to further increase your planning and looking into the future and even probably pushing out timelines a little longer because of the limitations on supply that is going to happen between China and India as their population explodes and their economies get better, as well as the U.S. We are currently seeing some of that now. But I do think it is going to get increasingly more difficult to have a good sustainable supply and I also think you are probably going to have to look for additional vendors where in the past you have been able to maybe just use one or two suppliers for major items.