13 Apr The Road to Operational Excellence – Only the Best for Cheetah Clients
When we first set out to provide e-commerce solutions for Small-Medium business supplies, we were hoping to make just a bit of a dent. We never imagined we’d end up disrupting a $1 trillion industry of US wholesale foodservice distribution.
Just five years after Cheetah was founded, we’ve managed to process over 350,000 orders, supply over 1,000,000 products, and service over 3,000 restaurants. Operating from San Francisco and the Greater Bay Area, we now service more than 10% of independent restaurants in the region.
We pride ourselves on developing a platform that provides a simple, flexible, and fast solution to support thousands of restaurants and SMB businesses with their grocery and supply needs.
We’ve come a long way since 2015. The road was rocky and full of challenges, the most recent being a full-blown COVID-19 outbreak that nearly wiped out all our customers. Keeping our focus on what customers really need, listening to them and constantly striving to improve are some of the things that kept us going. This is the story of our journey to operational excellence.
Solving Restaurants’ Most Pressing Problems
Our journey begins in 2015 in the sluggish foodservice market in San Francisco.
Back then, it wasn’t uncommon to see chefs in the middle of a shift or late at night making calls to different vendors, sending texts or faxes. The entire wholesale grocery and foodservice distribution market were highly analog. Legacy broadline distributors like Sysco and US Foods lacked price transparency and a convenient way for small business owners to search for inventory and manage their daily purchasing.
Cheetah was founded to address this problem. Our easy-to-use app offered flexible deliveries and transparent pricing. With this app, business owners could reduce the time it takes to manage inventory from 2 hours to 5 minutes per day, lower waste and increase cash flow.
At the same time, we were working on building an alternative supply chain. We collaborated with Restaurant Depot on last-mile delivery. This enabled small businesses to access a great assortment of local and national products from those vendors and benefit from a very convenient same-day or next-day delivery from Cheetah. Our fleet of temperature-controlled delivery vehicles worked around the clock to deliver supplies to thousands of small business locations daily.
Very quickly, more and more customers were noticing the obvious advantages to the Cheetah platform. Restaurant Depot’s partnership was so successful that we became too big and our truck fleet coming and going to Restaurant Depot’s parking lot was disturbing their operation. So, in late 2019 we decided to part ways from Restaurant Depot to open our own fulfillment center.
Since then, we have had a warehouse filled with local and national brands, all available on our app. From dry groceries to fresh produce, meats, and dairy, to-go-containers and cleaning supplies, we have been providing restaurants with everything they needed to operate.
A Tortuous Transition
Building an entire warehouse operation from scratch is not easy. Even after assembling a team of industry experts, we knew it would take some time to hone our logistics chops. We needed to establish business processes, reduce costs, optimize inventory management, increase labor productivity and, throughout it all, ensure customer satisfaction.
In the middle of the transition from delivering products from Restaurant Depot to having our own warehouse, COVID-19 happened. What was supposed to be a smooth transition became a tortuous path, with the whole restaurant industry getting impacted with lockdown and business closures. [Watch the video series Too Small to Fail we produced to show the struggles restaurants were dealing with due to COVID.]
Listening to What Customers Really Need
We’d be lying if we said we haven’t made mistakes or gone off-track on occasion. But the thing about operational excellence is that it’s not about perfection – it’s about the journey. Operational excellence is a philosophy that embraces a problem-solving and leadership mindset to create sustainable improvement within an organization.
So we improved.
Customer Facing In-House Truck Drivers
When we first started, we looked for the fastest way to expand and solve our customers’ problems. We partnered with a truck delivery service that got the job done, but that wasn’t enough.
Our customers’ feedback was clear: they really enjoyed our customer experience in general, except the interaction with drivers. Think this way: the truck drivers are the only real-life people our customers meet. And having third parties representing Cheetah in this crucial part of the user experience journey was harming the overall experience.
The decision to hire our own drivers was unanimous, so we quickly trained a high-performance team of drivers. We call them delivery specialists, and they are an integral part of the company’s customer service team. Like all Cheetah teams, they are highly qualified professionals strongly determined to deliver their best performance every day.
This approach to employee training and development makes it possible to continuously improve our processes, products and services in true partnership with our customers.
Intelligent Routing
Like many other distributors, Cheetah started traditionally planning truck routes, and it took us hours to come up with routes for our trucks. We then started to bring our tech approach to this problem.
Now we have a completely automated intelligent routing system that generates optimal daily routes in mere 2 minutes – taking into account traffic conditions, truck sizes, and customer delivery preferences.
The result is that we now can save a lot in fuel and labor costs and reinvest this into our business. In fact, we have achieved an increase of 40% in sales per truck hour. Better than that, our on-time deliveries are now at the 99% range.
Having the Right Products to Meet Customer Demand
We developed another exciting technology in-house to automatically ensure that our shelves remain stocked with products our customers need by considering historical demand data, trends, and seasonality. Our in-stocks are now at 95%, meaning that our customers can pretty much always purchase what they want.
We also keep a direct line with our customers and constantly bring new products to our inventory based on their requests. Our success is our customers’ success, and we will go above and beyond to serve them.
Now and in the Future: Hard Earned Operational Excellence
In April 2020, amid global lockdowns and pandemic-induced struggles, Cheetah closed a Series B of $36 million led by Eclipse Ventures, with ICONIQ Capital, Hanaco Ventures, and Floodgate Fund also participating; bringing the total raised by the company to $66 million and its valuation to $180 million.
This most recent milestone reflects our commitment throughout this crisis and beyond building a strong, agile, and technology-centric operation on behalf of our customers. We work hard to design business processes that reduce costs, improve inventory management, increase labor productivity and ensure customer satisfaction.
Operational excellence might sound like a buzzword, but for us, it means a never-ending journey of self-improvement. Today, we’re proud to say we have achieved operational excellence. With a 99% fulfill rate, 99% on-time deliveries, we are now better than many other industry players.
The proof that we have been able to deliver a stellar customer experience is our Net Promoter Score (NPS) of 28, which is significantly better than Sysco (with -7 NPS) or US Foods (3 NPS), two of the biggest food distributors in the US!
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