O'Hara-based Armada Supply Chain Solutions gets food to restaurants

Fans of the McRib can't get one without Armada Supply Chain Solutions.

Making sure the barbecue-flavored pork sandwich that McDonald's sells periodically gets to the right restaurants on time is the responsibility of the O'Hara-based company, a major supplier of the fast-food chain and other restaurants.

Armada, one of the region's largest privately owned companies, handles more than 45 million cases of food and other supplies annually for McDonald's, Chipotle, Chick-fil-A and other restaurant companies from warehouses it owns or manages, said CEO John Burke.

The company's relationship with McDonald's started in the early 1970s when its predecessor, North Side Foods, began supplying the restaurant chain with pork sausage patties. Since 2006, when the Armada name was adopted, revenue has increased by 50 percent to $1.5 billion from $1 billion.

“That shows the magnitude of product we're moving,” said Burke, who became CEO in 2011 when he; Joseph Dominijanni, Armada's chief operating officer; and other managers acquired the supply-chain business from the Hofmann family in a leveraged buyout.

The Hofmanns built North Side Foods on its patented, pre-cooked sausage, according to Burke. By 1987, strong demand for sausage and other products, such as bacon bits, led it to open a distribution center in Pittsburgh, and later others to cities as far away as Seattle. The Hofmanns sold the pork operation to Smithfield Foods in 1998.

“That gave the initiative to logistics and supply chain management,” said Burke, a former North Side Foods employee, who as chief executive of Armada, now oversees dozens of distribution centers for McDonald's, its largest customer.

Armada's growth hit a highpoint in May when it opened a warehouse the size of seven football fields in Greencastle, in Franklin County, the largest in the McDonald's network, Burke said. A spokesman for McDonald's, which needs about $10 billion worth of food and other supplies for its 14,000 stores nationwide each year, could not be reached.

Armada owns six other warehouses across the country and employs 380, including 220 in O'Hara.

The company has teams of engineers and technicians that manage customer supply networks from its Supply Chain Solutions Center in O'Hara. Their task is to study networks of warehouses and trucking firms that store and move goods, find inefficiencies and reduce costs by changing the process, Dominijanni said.

Some of Armada's growth has come from a unit it stated in 2006 to provide freight services. He said it was started by hiring a group of young professionals with supply-chain management, finance and industrial engineering degrees.

“We've tried to continue that by hiring smart, talented people right out of college,” Dominijanni said.

Traditionally, logistics companies handle the flow of goods from suppliers and warehouse by truck to customers. Because of its history, Armada specializes in supplying restaurants.

“The restaurant industry is going through a transformation now,” said Burke, 54.

Because of smartphones — and apps such as Facebook, Twitter and new payment methods such as Apple Pay — consumers and competitors get information about promotions and other competitive information faster than in the past.

“Promotions are available immediately over smartphones,” said Dominijanni, 58. “Restaurants and their suppliers must be agile enough to react to consumer demand and competition.”

In current era of “digital engagement,” restaurants must find more ways to engage consumers and do it quickly, Burke said. Armada's “goal is to help supply chains execute in a more agile way.”

As a result, its business has become more than just operating a fleet of trucks that move food and supplies from a supplier to a restaurant location, Burke said.

“Logistics has turned into supply chain management. ... It's a transformational change,” he said.

That means companies such as Armada are evolving to become the manager of the supply chain for companies such as McDonald's and Chick-fil-A in what he called “a collaborative process.”

“Our clients share a lot of important information with us,” Burke said. For example, when McDonald's plans to promote the McRib, its supply chain must deliver it to the selected restaurants “in the right quantities at the right time,” he said.

“We get paid an outsourcing fee to manage elements of the supply chain,” Burke said. “We receive an incentive to create supply chain efficiencies for our clients.”

Armada's shifted in 2006 to the outsourcing-management model from a transaction-fee model, where it was paid individual fees for warehousing and transporting goods. Technology and the visibility of information is driving the logistics industry to the outsourcing model, Burke said.

John D. Oravecz is a Trib Total Media staff writer.