food and beverage supply chain, supply chain, food and beverage, supply chain management

In today’s competitive food and beverage marketplace, disruptions are a daily occurrence. Years ago disruptions were thought of as common events, like customers changing orders, ingredients and supplies coming in late or even a packing line randomly going down for a short period of time. Nowadays, events like these are just normal day to day issues of a food and beverage business. 

Today’s disruptions tend to be much more significant and far-reaching. Pandemics, border closures, weather anomalies, geo-political issues, distribution lane blockages, worker shortages and similar events are forcing supply chains to their breaking point. These disruptions are occurring more and more frequently and wreaking havoc on all aspects of food and beverage manufacturing operations, especially the supply chain. Supply chains today must be agile, quick and nimble. They must be flexible, resilient and easy to re-configure to adapt to changes in the marketplace so that the products and data keep flowing. It’s easy to forget that there are two supply chains that need to operate in unison; the physical supply chain and the digital supply chain. If one falters or is not in sync with the other, they both fail.

Supply Chain Management is a Baked-in Philosophy

I have recently been in a number of discussions with members of the QAD team to determine what food and beverage manufacturers need to do to ensure their supply chains remain agile and nimble. As our discussions evolved, we put the food and beverage supply chain into the same context of a product that the industry produces. As a quality food and beverage product needs critical ingredients, so too does the supply chain. To stay competitive, food and beverage companies need to provide quality products that appeal to the consumers’ ever-changing preferences. Supply chains need to be strategically coordinated and tactically managed. Supply chain management is actually more like a philosophy and evolving thought process that is baked-in rather than simply a process. 

Supply chains have become so complex that to succeed; managing them needs to be collaborative and interactive through the entire ecosystem, not just internally within a manufacturing organization. To accomplish this transformation from process to philosophy requires organizations to add three ingredients to the strategy of managing the supply chain.

  • Collaboration
  • Investigation
  • Evaluation

These three ingredients focus on information. To successfully manage your supply chain, knowledge is power. In today’s ultra technology world, access to information is easier than ever before. However, at times there can be too much information with not enough time to dissect it all to make timely and wise decisions. That is where these three elements come into focus as true ingredients to keeping your supply chain agile and adaptable to disruption and changing market conditions.

Collaboration

Communication is critical to keeping the supply chain moving, and again we mean the double-sided supply chain of product and information. Communication and collaboration does not just mean within the walls of the company or the organization. Today’s market dictates total collaboration between trading partners and all organizations that have an impact or participation in your business. Suppliers, third party logistics suppliers, contract manufacturers, trucking and shipping companies as well as the most obvious, your customers. How about the customers of your customers, the consumers? Why keep a secret? Every one of these entities has a significant impact on not only the performance of your supply chain but your business. Shouldn’t you want to collaborate frequently with them all? Think about the data that can be gathered and more importantly, the information, decision-making capabilities that can come from that collaboration. Collaboration is the key to getting that knowledge and thus, gaining the power to build the adaptive supply chain.

Investigation

As previously mentioned, there is a great deal of data available today that can help companies manage their supply chains and collaborate both internally and externally with trading partners such as suppliers and customers. Investigation is the second ingredient needed to help the supply chain adapt to a disruptive market place. Investigation is an interesting word. Your data needs to be real, accurate, reliable and most importantly, current. There was an old phrase years ago about the news business: “If I have to wait till the end of the day for information, I might as well wait a lifetime”. This can be applied to the food and beverage manufacturing industry as well. 

Reliable, accurate and timely data will enable you to make smarter and quicker business decisions. Today’s technology rich world gives us things like Industry 4.0, Internet of Things (IoT), Artificial Intelligence (AI) and EDI, some of which can be used at an organization’s disposal to be able to access and relay information. This expert data will allow businesses to communicate and interact better than ever before to order ingredients, make products and ship them to where they need to go. To do this successfully, your data needs to be real as they say. Having the processes and systems in place to be able to quickly sort through and analyze all the data available to determine what information is critical and applicable for a given scenario will ultimately keep supply chains moving. Investigation is a key component.

Evaluation

We are experiencing unprecedented volumes of available data, more than can be realistically digested manually. All of us, in all walks of life are drinking from the proverbial data fire hose. Supply chain data in food and beverage manufacturing is no different. In business, the data challenges are greater; not all of the data is structured and a large amount is unstructured, not all of the data is relevant, and not all of the data is decision grade quality. Data is changing in real- time, and the volume keeps increasing. This expansive amount of data provides manufacturers an opportunity to learn from this data. Again, we said it over and over, knowledge is power. To make the best use of this data, Evaluation is the key component to ensure that the best information is available to make informed decisions.

To effectively perform the Evaluation process, there are a number of technologies that can be employed to accomplish the task. Next generation supply chain analytics, IoT and AI pose an opportunity for organizations to transform their business model using connected solutions. To achieve supply chain agility, you need the ability to detect, analyze and execute the best possible business decisions regardless of the sources of supply and demand. To reach this goal through the enterprise, you need end to end visibility. This requires accurate data and the right tools to evaluate that data. Speed and agility in evaluating data is as important as speed and agility in the actual supply chain.

Synchronizing Physical and Digital Supply Chains

It is difficult to make decisions without information. It is even more difficult to make good decisions without accurate and timely information. A common phrase in the industry when discussing supply chain dysfunction and missed opportunities is “a day late and a dollar short”. This implies that if you do not have the ability to make quick and accurate decisions, something will fail. Moving product through the supply chain can only happen if the physical and digital supply chains are synchronized and those managing them are informed and have the ability to collaborate with all parties, investigate opportunities and evaluate all possible supply chain decisions. This leads to an agile and nimble supply chain that can withstand the pressure of the disruptions in today’s food and beverage marketplace.

My QAD colleague, Ludovic Lezvenen and I dive into these three ingredients with a more detailed blog series and corresponding webinar on each ingredient. Check them out for more detail on the three key ingredients needed to keep your supply chains moving in today’s disruptive world.