In today’s competitive food & beverage marketplace disruptions are a daily occurrence. We are not talking about customers changing orders, ingredients and supplies coming in late or even a packing line going down for thirty minutes. We are talking about pandemics, hurricanes, canal blockages, geo-political issues and the like. 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 products and data keep flowing. The world forgets 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 synch with the other, they both fail.
This blog is the first chapter of a three part series where we will be discussing key three ingredients that manufacturers need to keep the physical and digital supply chains in synch moving with speed, agility and uninterrupted. We will be following these blogs with a three part webinar series in June as well to go into more details. So let’s jump in and look at these ingredients.
To stay competitive, food and beverage need to provide quality products that appeal to the consumers ever changing preferences. Many will tell you that each fine food product starts with key critical ingredients. The same goes for your supply chains. You cannot manage them haphazardly, without coordination or control. It is a process that needs to be taken seriously at all times and supply chain management should be a philosophy not a process. The word process is used often but supply chains have become so complex that to succeed, managing them needs to be a philosophy that flows through an organization.
To accomplish this transformation from process to philosophy requires organizations to add three ingredients to the strategy of managing the supply chain.
These are three necessary elements to assist in building the agile and adaptive supply chain and to have an integrated philosophy throughout the organization.
The remainder of this blog will focus on collaboration. When we think collaboration, a number of things come to mind including a few questions. What are the main limits of collaboration within your supply chain? Another question, how much is your supply chain extended? 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 customers. How about the customers of your customers, the consumers? Why keep a secret? Everyone 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. There is an old saying; knowledge is power. Collaboration is the key to getting that knowledge and thus, gaining the power to build the adaptive supply chain.
Three critical areas of the supply chain need collaboration.
- Internal and external manufacturing operations
Let’s not forget, everyone in between too. But for now, to simplify, let us keep to these three.
The supply chain is often referred to as the spinal cord of a food and beverage manufacturing business. If that is the case, then collaboration with your customers might be the bone marrow. We are not just talking about order data here. We are talking about a true partnership. Point of sale data, promotional plans, business growth plans, future product needs. You need to know what their plans are so you can adjust your plans and to determine if that customer even fits your plans. Sometimes, they won’t and other times there might be a strategic need to alter your philosophy based on where your customers are going. Collaborating with your customers breathes life into your business, their business and the ongoing partnership. Again, why keep a secret?
Internal and External Manufacturing Operations
One of the biggest supply chain disconnects typically occur within the manufacturing organization itself. Consumer preferences and on-line purchasing have altered the supply chain and has increased your product mix. SKU proliferation and rationalization is at an all time high. Seasonality of products has changed and the actual day to day shop floor is now more hectic than ever. To meet demand, many manufacturers now employ multiple contract manufacturers or co-packers to deliver products to the right place at the right time. This however is the one area which tends to have communication issues. The planning hierarchy from forecasting, distribution through production planning has to be in synch and uninterrupted. Information needs to be at the ready of all those involved in manufacturing operations and readily and easily accessible. There has to be an uninterrupted loop back for return information collaboration so the entire process is synchronized. Again, why keep a secret?
The third contributors to this crazy puzzle are the suppliers. Where would manufacturers be without their suppliers? That is an easy question to answer, out of business. Collaboration with your suppliers is almost as important if not more than with your customer. So let us add another stream of bone marrow to the spinal cord that is the supply chain, communication and collaboration with your customers. Manufacturers forget that their suppliers have supply chains too! The entire supply chain is built on the intertwining of many supply chains which all have to be synchronized. Again, this is why collaboration is so important. When your plans change, the suppliers need to be the first to know in case their supply chains need to be adapted. You cannot just assume that they will be able to respond to your changes. At the same time, you need to be informed on when they might have issues, and on many occasions, that communication of their problems does not happen immediately. So, the answer is, proactive communication both physically and digitally. Knowing their issues, plans and operational status and in turn communicating your plans with them, will keep the information and products flowing. Why keep a secret?
Collaboration is just one piece of this recipe. Our next blog will focus on ingredient number two: Investigation.
For any recipe to be successful, it needs a few key ingredients and to follow some key steps. 1. Collaborate 2. Investigate 3. Evaluate. Do you want to implement a successful F&B Supply Chain?
Then this 15 minute webinar series will be of interest and support you in creating a successful supply chain for your company!