Panera Bread 2011 Annual Report Download - page 13

5
Bakery-Cafe Supply Chain
We believe our fresh dough facility system and supply chain function provide us a competitive advantage. We have a unique
supply-chain operation in which our regional fresh dough facilities supply on a daily basis dough for our fresh bread along with
tuna, cream cheese, and certain produce to substantially all of our Company-owned and franchise-operated bakery-cafes. As of
December 27, 2011, we had 24 fresh dough facilities, 22 of which were Company-owned, including a limited production facility
that is co-located with one of our Company-owned bakery-cafes in Ontario, Canada to support the three Company-owned bakery-
cafes located in that market.
Fresh dough is the key to our high-quality, artisan bread. Distribution is accomplished through a leased fleet of temperature
controlled trucks operated by our associates. As of December 27, 2011, we leased 200 trucks. The optimal maximum distribution
range is approximately 300 miles; however, when necessary, the distribution ranges may be up to 500 miles. An average distribution
route delivers dough and other products to seven bakery-cafes.
Our bakers bake through the night shaping, scoring, and finishing the dough by hand to bring our customers fresh-baked loaves
every morning and throughout the day. In addition, our bakers bake high volume products throughout the day to continue to
deliver abundant amounts of the highest quality and freshest bread possible. We believe our fresh dough facilities have helped us
and will continue to help us to ensure consistent quality at our bakery-cafes.
We focus our growth in areas we believe allow us to continue to gain efficiencies through leveraging the fixed cost of the fresh
dough facility structure. We expect to selectively enter new markets, which may require the construction of additional fresh dough
facilities once a sufficient number of bakery-cafes are opened to ensure efficient distribution of fresh dough and other products.
Our supply chain management system is intended to provide bakery-cafes with high quality food from reliable sources. We have
contracted externally for the manufacture of the remaining baked goods in the bakery-cafes, referred to as sweet goods. Sweet
goods products are completed at each bakery-cafe by our professionally trained bakers. Completion includes finishing with fresh
toppings and other ingredients and baking to established artisan standards utilizing unique recipes.
We use independent distributors to distribute our proprietary sweet goods products, and other materials to bakery-cafes. With the
exception of products supplied directly by the fresh dough facilities, virtually all other food products and supplies for our bakery-
cafes, including paper goods, coffee, and smallwares, are contracted by us and delivered by vendors to an independent distributor
for delivery to the bakery-cafes. We maintain a list of approved suppliers and distributors from which we and our franchisees must
select. We leverage our size and scale to improve the quality of our ingredients, improve purchasing efficiency, and negotiate
purchase agreements with most of our approved suppliers to achieve cost reduction for both us and our customers.
For further information regarding our product supply, see Item 1A. Risk Factors.
Management Information Systems
Each of our Company-owned bakery-cafes have programmed point-of-sale registers which collect transaction data used to generate
pertinent information, including, among other things, transaction counts, product mix, and average check. All Company-owned
bakery-cafe product prices are programmed into the point-of-sale registers from our support centers. We allow franchisees access
to certain of our proprietary bakery-cafe systems and systems support. Franchisees are responsible for providing the appropriate
menu prices, discount rates, and tax rates for system programming.
We use in-store enterprise application tools to assist in labor scheduling and food cost management, to provide corporate and retail
operations management quick access to retail data, to allow on-line ordering with distributors, and to reduce managers’
administrative time. We use retail data to generate daily and weekly consolidated reports regarding sales and other key metrics,
as well as detailed profit and loss statements for our Company-owned bakery-cafes. Additionally, we monitor the transaction
counts, product mix, average check, and other sales trends. We also use this retail data in our “exception-based reporting” tools
to safeguard our cash, protect our assets, and train our associates. Our fresh dough facilities have information systems which accept
electronic orders from our bakery-cafes and monitor delivery of the ordered product back to our bakery-cafes. We also use
proprietary on-line tools, such as eLearning, to provide on-line training for our retail associates and on-line baking instructions
for our bakers.
Most bakery-cafes also provide customers free Internet access through a managed WiFi network. As a result, we host one of the
largest free public WiFi networks in the country.