We recently introduced to you the concept that the food & beverage supply chain is similar to that of a recipe for a manufactured food product. There are critical ingredients or components that need to be in place. It will ensure that your supply chain is operating at peak efficiency; providing agility and adaptability to succeed in today’s disruption food and beverage marketplace. Disruptions are occurring at a record pace and are far more detrimental than a missed delivery of a raw material. Pandemics, environmental issues, geo-political factors, shipping route blockages are majors disruptors. And they bring manufacturing operations and supply chains to their needs. To thrive in this unprecedented era of disruption, organizations need to synchronize the digital and physical supply chains.
This is blog number two of a three part series discussing three key ingredients that manufacturers need in their strategies to keep the supply chain agile and responsive to the challenges of the time. We will be following these blogs with a three part webinar series in June to dive into these topics in more detail.
So let’s jump in and look at these ingredients.
Managing a successful supply chain needs to be a coordinated effort. Not just the internal organization but the entire ecosystem that encompasses the process of making and distributing the finished products. Internal and external components need to be involved in the entire process, strategy and philosophy to create a nimble and adaptive supply chain. We have identified three key ingredients.
Our first blog article focused on Collaboration. This blog will focus on ingredient number 2; Investigation.
Investigation is an interesting word. Especially if we start putting it into the context of the food and beverage supply chain, what do we mean? Well, ingredient number one is collaboration. We discussed collaborating throughout the organization and externally with customers, suppliers and in many cases, the consumers. What are we collaborating? We are talking about data, information, the things you need to gather to make informed decisions on how to coordinate all the pieces and moving parts of the supply chain. 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.
Knowledge is Power
The more reliable your data is 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 are just some of the sophisticated tools that are at an organizations 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. And, just like collaboration, there are three areas of the supply chain that need the ingredient of investigation to validate all pieces of data.
- Internal and external manufacturing operations
Let’s not forget, everyone in between too. But for now, to simplify, let us keep to these three.
Get the right product to the right place at the right time. That is the top goal of a food manufacturer after producing safe food products. Your customer needs the products on the shelves (or in the online warehouse) when their customers, the consumer want to purchase them. You have to ensure that you have the most up to date data at all times to ensure that all your plans both horizontal and vertical are in line. Investigate. You need the tools and processes in place to align the strategic and tactical plans to the up to the minute executable actions. Investigation of information in terms of where and who it is from, is it reliable, do we need different information is the major step to making sure we have the right things to collaborate to our trading partners.
Distribution data, item location level forecasting data, point of sale data, promotions current and planned, seasonal factors are all information that you can use today’s technological advances to ensure that you can satisfy your customers needs while maximizing your profits, minimizing costs, eliminating as much supply chain stress as possible while keeping customers happy. Real, live, accurate data available in a nanosecond to anyone in or out of the organization is paramount to success. What you are striving for here is to know what your customer is going to do before they do it. Investigate that your data is real.
Internal and External Manufacturing Operations
Have you ever heard the phrase, the left hand doesn’t know what the right hand is doing? That happens more than once a day inside many food and beverage manufacturers. It happens because the data being communicated is old or not being communicated at all. Many times it happens because the process of investigating the data and the sources fail or are not continuous. Information needs to flow through the digital supply chain instantaneously and it has to be current. Real time information keeps the supply chain moving and flexible and stops it from snapping. Forecast changes, order changes, quantities, changing requirements for ingredients, production schedules, labor requirements, inventory counts, are just some of the data points that need to be accurate and transmitted to anyone requiring it at a moment’s notice. It has to be real. Sophisticated demand planning tools and processes help manufacturers investigate all data elements continuously.
Today’s manufacturer needs information needs to be fluid. Data cannot be refreshed once an hour or once a shift like in the old days. Investigation all potential data points is critical to keeping the business moving forward. Nothing stops a production floor quicker than bad information. And, to make matters worth, if bad information gets to the production floor and the wrong things are produced, then you get something even worse, distressed inventory and negative profits. The manufacturing physical and data supply chains run on real data.
Unless you have been on another planet for the last several months, you know that every segment of manufacturing is experiencing supply shortages of one kind or another. Supply shortages of critical components for automotive products, construction products as well as food ingredients, has significantly impacted global supply chains that has ripple effect through all industries. Many supply chains that move many of the goods used by consumers and manufacturers around the world have felt the impact. There is no way predict many of the disruptions that we have encountered in the last several years. We cannot foresee the future either. However, manufacturers need to be prepared with risk management plans, operational startup plans should shutdowns occur.
All of these processes, systems and protocols to assist in managing through disruptions begin with investigating and analyzing data. The supply chains of all businesses begin with materials they need to produce their products and their suppliers. Thus, the foundation of that relationship is information.
The longer you have to wait for information means the less time you will have to that data to make informed and smart decisions. Finally, you need to INVESTIGATE all information to be able to COLLABORATE effectively both to internal and external partners. Another phrase that has been used for ages is that “time is money”. Accurate data and information saves time and thus saves $$$$$!
Join us in June for our Webinar series. We will explore the topics of COLLABORATE, INVESTIGATE along with the next blog topic in greater detail.
Our next blog will be focus on how being able to EVALUATE your information will keep those supply chains nimble, agile and help you become an adaptive effective enterprise.