Tim Hortons pours portal into franchise relationship

TORONTO — Tim Hortons success is fueled by more than coffee — it’s got the efficiency of an Internet store portal connected to its back office IT systems.

At a presentation at the CIO Summit conference in Toronto

this week, Debra Stafford, vice-president and chief information officer of information technologies for TDL Group Ltd. (Tim Hortons), discussed how her company is rolling out a Web-based interface to an enterprise resource planning (ERP) system.

Pointing towards the company’s “”self-funding”” implementation of the Movex food and beverage portal, a project Tim Hortons partnered with IBM to deliver, Stafford spoke on the importance of moving Tim’s towards an efficient, Internet-based transactional system companywide.

Tim Hortons has spent 11 months installing Movex, an ERP tool from Intentia. The software has allowed the company to automate a slew of tasks including franchise agreement invoicing, electronic funds transfer, accounts receivable and payable, sales order management and purchasing, taxation Control, inventory and warehousing.

Movex will also be installed in a 250,000 sq. ft. production and distribution facility operated by Maidstone Bakeries, a joint venture between TDL Group and Cuisine de France of Dublin, Ireland. Maidstone produces parbaked frozen baked goods for distribution to Cuisine de France and Tim Hortons outlets throughout North America.

So far, TDL has more than 2,000 stores connected to its Internet portal, which allows for automated collection through Movex from franchises and online reordering for stores. Another 300 “”non-traditional”” stores, such as those in food courts or Esso gas stations, are yet to come online with the fully integrated portal, which runs through a Web interface, in most cases on a DSL line.

Eliminating the costly, time-consuming processes of transaction management and day-to-day ordering was essential, Stafford said. In the past, Tim Hortons had to add staff at a higher rate than it could afford and was overtaxing district managers, she said. The company reported a loss of $1,000,000 for every 200 stores added before automation was in place.

Getting the individual franchisers to come on board with the portal was a challenge, Stafford added.

“”We had to be able to provide functionality and value to them,”” said Stafford, who noted that the immediate savings may have been more immediately apparent at the corporate level than for the individual store-owner.

Industry analyst David Senf of IDC Canada said that IT is playing a larger and larger role in the restaurant industry, though largely behind the scenes.

“”Restaurants are challenged with managing inventory throughout a growing network of suppliers while optimizing profits through a greater understanding of buying patterns,”” Senf said. “”The portal industry — with vendors like Citrix, IBM, Plumtree, etc. — is progressing to a more modularized approach to functionality.””

In addition to increased efficiency and lower manpower overhead, the Movex system has provided the most savings by speeding up TDL’s ability to collect receivables, Stafford said, though she did not reveal how much.

Stafford said the company hopes to see all stores fully integrated and online with the system in the near future. The next addition to the project will be the implementation of handheld inventory scanners for the back of individual Tim Hortons stores.

Some clients are already impressed by the end results — Senf said Tim Hortons has “”really good coffee, from an analyst perspective.””

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