Supply chain management: what’s next for food and beverage
Food and beverage companies have long struggled with the unique requirements of shelf life management, complexities of batch scheduling, traceability, and many other factors. In addition, uncertainties around tariffs, sustainability initiatives, and growing regulations are some of a multitude of dynamics that will surely add even more complexity to the mix. Many of these issues and trends can have a profound impact on your entire supply chain—from procurement to manufacturing to delivery.
In a recent Infor-sponsored webinar, Infor segmented a number of challenges related to supply chain complexities in the food and beverage industry into three buckets; gain global visibility, predict and respond to volatility, and embrace the best technology.
Gain global visibility
We all tend to limit our focus to the variables within our control, however, it’s time to rethink all supply chain processes because they are not as efficient as they need to be. We did a survey of the companies that were on the Infor Nexus network, about two years ago, and what we found is that about 46% of them said that prior to implementing Infor Nexus it took them as long as three days to identify where a product were, and when it was going to be available. Very clearly the data is not available to help us make good decisions. On top of that, there are gaps for how manufacturers connect with customers, suppliers and carriers outside of the enterprise, whether it be multiple point-to-point EDI connections, portals, spreadsheets, emails—the list is almost endless—and very difficult to maintain.
In order to gain visibility, you need to be connected to your global trading partners in a meaningful way. With a multi-enterprise business network you’ll be able to remove silos not only inside your organization but between your organization and the people it does business with. It enables the capturing and sharing of real-time data to improve efficiency and overall business responsiveness.
Food photo created by jcomp - www.freepik.com
Predict and respond to volatility
How do you predict and respond to volatility? This can start with the fundamental area of efficiency and automation on the plant floor. How do you optimize your production schedule? How can you do a better job at dealing with the various bottlenecks, whether it’s tanks in your operation, or various speeds within your filling lines?
Scheduling tools that consider all variables in order to optimize production is merely one part of the answer. When you also bring a solution for asset management into your business and integrate that with your scheduling solution, you get a better understanding of how to plan around maintenance windows based on having better visibility of what the real equipment needs are. Production scheduling and asset management impact your supply chain and your ability to deliver and they shouldn't be handled as separate silos.
When it comes to efficiency and automation there’s also the challenge of optimizing an enterprise’s transportation and warehousing and understanding the complexities of doing that as the channels to market evolve. Whether your company does its own e-commerce, or you're working with an e-commerce vendor to deliver products, some of the capabilities and requirements change and more and more companies are looking closer at all the tools out there to help them be more efficient.
Improving efficiency has been a driver in the food industry for decades but one of the most volatile areas lately has been the focus on sustainability and transparency. What consumers are seeking constantly changes marketplace’s requirements. Originally it was fat free or GMO free or similar. In the last few years, it's moved more into cleaner labels since consumers want to easily understand what's on the ingredient statement. And now this trend is expanding further. Sustainability claims today can include the farm health, the sustainability of the raw materials you are using, energy use, minimizing the use of plastics and wasting less packaging. Infor has a number of customers focused on measuring and reporting on sustainability metrics. One of them is addressing the fundamental question of how to feed the growing world population in a sustainable method. Part of that means rolling out a global solution to help them embrace a more efficient supply chain.
Each company may have different objectives and needs and its own ways to attack the sustainability issue. For some companies it means doing a better job at tracing and tracking back to raw materials, for others it entails doing a better job at measuring its carbon footprint or managing wastewater. The challenge here is for companies to determine exactly what it is they want to measure, what they want to be able to track, and in turn have the tools to be able to do so.
The last area of volatility is the new unknowns. F&B companies are used to the planning challenges associated with seasonality, shelf life, and promotions. Yet more recently we have dealt with a heightened challenge associated with the unpredictability of regulations and tariffs, and even the availability of human capital. How do you meet market demands if you know you can’t get more people to run your plants? To be able to look at all those variables efficiently within your business requires some pretty slick advanced planning tools. You can’t simply make a best guess effort based on tools you already have in place.
Food photo created by freepik - www.freepik.com
Embrace the best technology
When you're looking at building a better foundation to address the challenges you may be facing within your overall organization, there's a number of solutions to consider. These aren't necessarily always the options that fall into what you’d expect to be a supply chain solution, but they all overlap within your overall supply chain and will help drive effectiveness and efficiency.
The first example is formula management. Many companies want to ascertain that it’s creating the right products for the right country as there may be limitations from a global perspective of where you can sell a product. Trying to manage this manually is challenging. Being able to respond to inquiries from customers and prospects around the globe requires quite a robust formula management solution.
Another example that people are buzzing about nowadays is blockchain. Many of the goals companies believe that blockchain will accomplish can be solved faster, less expensively, and better without invoking blockchain. However many of the challenges regarding traceability and quality that blockchain is trying to address can likely be resolved faster and with greater confidence using existing, proven solutions. The functionality, embedded in modern ERP solutions coupled with a network-based cloud platform, may not have the current intriguing allure of blockchain, but it has unquestionable proven success, is hardened through years of vigorous usage, and is accessible right now across a myriad of partners, suppliers, logistics providers, and carriers.
