How I transformed my franchise by outsourcing production

Lenard’s is one of the most iconic retailers in Australia, having sold poultry in their specialist stores for decades.

But the company is still managing to innovate. Last year it started outsourcing chicken production to Inghams, and devised a system whereby chicken is butchered and sent to each store based on its need, rather than having this whole process performed in the store itself.

The company is saving plenty of money, and managed to pick up an Australian Busines Award in the innovation category for this new Easy Cuts program. Managing director Bruce Myers spoke to us about how the idea is helping the franchise.

So how is the business performing, given everything that’s happening in the food market right now?

Retail has its challenges, no doubt. You have to do different things now to attract people to your business, personalised service and so on.

I suppose, in a general sense, it’s just habits. People are eating out less, and so on. But the one thing that affects us most is Coles and Woolworths and their stoush over the past few years. The reality is that what they are doing on price brings a perception that they are cheap, and everyone isn’t. That’s something we have to battle. And we compete then in service.

How are you doing that? Through investment?

We’ve been putting a lot of money into product development, a stack of new products as well.

And with this program as well. How did you come up with the idea?

What happened is that we used to bring products in house, and then debone the chicken there. But now, what we’ve done is taken the deboning part out of everything, and then put that in a poultry service. Inghams can do that in their own factory where they can automate it, and it makes the process more efficient for them and at a realistic price for our stores.

The other benefit that automation gives us is specification tolerance. If we’re after a particular cut, it’s a lot more consistent.

How is it more consistent?

They’re boning the birds mechanically and manually, and then cutting the portions that we require and sending them to the individual store. We’ve essentially just outsourced the manufacturing process while still maintaining the fresh chicken each day.

It’s a bit of a change, we’ve been at this for nearly 25 years so it’s only in the last two years we’ve started doing this.