3 ingredients for a Successful Food & Beverage Supply Chain – Ingredient #3 – Evaluation

To Be Successful, Any Recipe Needs Key Ingredients; Same for Your Food & Beverage Supply Chain – Ingredient #3 - Evaluation

Welcome to our third and final blog on key ingredients to improving your food and beverage supply chain.  We have been discussing 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 to ensure that your supply chain is operating at peak efficiency providing agility and adaptability to succeed in today’s disruption food and beverage marketplace.  

All industries supply chains have been disrupted.  The last 16 months especially has pushed supply chains to the brink of collapse.  Yes, the Covid-19 pandemic has been the major contributor but there have been geo-political issues, whether issues and other economic factors in additions to the evolving preferences of consumers that causes day to day interruptions to product movement. The market complexity continues to expand and thus food manufacturers need a synchronized supply chain that operates efficiently and has built in flexibility, agility and adaptability is needed to survive. To thrive in this unprecedented era of disruption, organizations need to synchronize the digital and physical supply chains.   

This is the third and final article of our 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.

To have a successful orchestration of the supply chain, the entire ecosystem of the manufacturing company needs to be informed and operating in unison. The internal and external components and all trading partners need to be part of the process.  To create this coordinated effort that yields a nimble yet efficient supply chain, three key ingredients are needed:   

Our first two blogs focused on Collaboration and Investigation.  This blog will focus on ingredient number 3, Evaluation.

We are experiencing unprecedented volumes of available data, more than can be realistically digested manually. We are drinking from the proverbial data fire hose, however, 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.  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, Internet of Things (IoT), and Artificial Intelligence 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.  In our previous blogs, we looked at the other components of our ingredients through different perspectives, the three key links in the supply chain; customers or distribution, manufacturing operations and the procurement component.  

Customers

Get the right product to the right place at the right time.  I believe this is the third straight blog where I have said that phrase.  Again, after food safety and integrity, this is the number one goal in food manufacturing.  The trick though is to do this over and over again while maximizing profit margins.  To do this effectively is to first understand that food manufacturer’s customers are not the end component of the value chain.  They have customers who are the consumers.  When we talk about data, we need not only information on the customers (retailers) but information about the consumer.  This gets complicated but, with technology to day and the right business intelligence tools, can be greatly simplified.  Point of sale data, consumer patterns, seasonal data, promotional data, competitor sales data and many other types of information can be used through IoT tools for quick transformation of raw facts into decisions on how to deliver products to customers.  EDI communication of data to and from customers as well as advance forecasting, demand sensing all the way through to demand driven MRP can take customer and consumer data and put it to valuable use through the entire business product all the way through product design.

Internal and External Manufacturing Operations

A manufacturing company can have world class demand and distribution planning statistics but if manufacturing operations do not get that information and have poor planning processes and bad operational data, then customer service will fail.  Real time manufacturing data that can be delivered in both directions of the supply chain is critical to delivering that right product to the right place at the right time.  Lines go down, materials are defective or late, ingredients are spoiled, orders change, if this information is not communicated quickly to the operations team and they do not have the right tools to quickly reprocess and communicate production plans then the entire organization could be brought to their needs.  The ability to capture operational data including valuable information of asset performance, production execution data that can be quickly tied back to the production plan keeps the shop floor running.  This enables the up and down stream components of the supply chain moving and in sync. 

Procurement and Supply

Another repeated thought through this blog theory is the reminder that suppliers not only are at the top of the stream of your supply chain but they have supply chains they need to operate flawlessly so you get what you need.  Data, information fueled by real time communication and analysis is essential.  If this portion of the supply chain falters, obviously all downstream activities with falter.  Actionable insights and the ability to quickly transform information into decisions keep the supply chain moving.  Because suppliers are at the top of the stream, at times, this information can be the most critical.  IoT data analytics such as RSS feeds and qualitative analysis can assist manufacturers to quickly evaluate supplier issues and determine alternate courses of actions to keep the supply link intact thus minimizing the disruption throughout the rest of the valuation.

It is difficult to make decisions without information.  It is even more difficult to make good decisions without accurate information.  More importantly, regardless on the accuracy of the data, if it is not timely and if the decisions made from that data are not executed quickly, then supply chain failure is imminent.  In today’s complex food and beverage marketplace, supply chain failure is not an option if a manufacturer is going to sustain and survive.  This requires the ability to Collaborate both inside and outside the organization to get the most accurate data possible in the most timely manner.  Then, that information needs to be Investigated to determine validity and acduracy so it can be disseminated quickly to the right people.  And third, that information and the decisions from that information need to be quickly and succinctly Evaluated in order to synchronize all components of the business to have an “Agile Supply Chain”.

 This completes our blog series on the three key supply chain ingredients needed to build an agile supply chain.  Please join us later this month as we begin our three part webinar series going into greater detail on these critical elements of your supply chain planning processes.

Stephen Dombroski
Stephen Dombroski is QAD’s Senior Manager for the Consumer Products and Food & Beverage vertical markets. Steve has over 30 years experience in manufacturing and supply chain, and has helped multiple companies in a number of industries to implement S&OP concepts and processes.