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Digitalisation: the key to unlocking growth potential

13 December 2021

Josephine Coombe identifies how digitalisation is providing the visibility and agility required by food manufacturers and co-packers to meet fast-changing consumer demands. 

As 2021 draws to a close, it is now clear that the days of stable retail supply channels are long gone! The post-pandemic reopening of the economy has seen consumer demand bounce back stronger than ever and preferences for even greater choice also continue to evolve significantly. 

However, managing a growing external supply network to meet changing needs does bring with it some challenges. Effective collaboration and improved communication between brands and suppliers becomes essential, with visibility and real-time data being key; and it is here that the use of technology and digitalisation can really deliver.

Brand owners are provided with a platform that extends beyond their own organisation and beyond the capabilities of traditional internal systems such as Enterprise Resource Planning (ERP) software to connect and collaborate with their external supply chain partners. Contract packers and manufacturers, by return, can implement a shop floor solution tailored to enhance day-to-day operations, enabling them to optimally execute orders, track order milestones collaboratively, and ensure that materials and stocks are available to meet production deadlines. 

Seeing digitalisation benefits
With digitalised systems, contract packers and food manufacturers are seeing the benefits of digitalisation and using their enhanced capability to act as strategic partners to differentiate a brand’s product offerings. It could include a variety of activities, from sleeving and labelling to creating limited edition packs and displays or even reconfiguring the overall packaging format. Managing this work with a mix of machinery and labour-intensive production lines requires flexibility and agility and this is where digitalisation really delivers. 

Marsden Packaging, for example, a company that specialises in primary and secondary packaging services for the food and pharmaceutical sectors, is using Nulogy’s purpose-built platform to help its operations to scale effectively, as well as improving efficiency and customer service. From helping reduce downtime as customer production schedules constantly change to enhancing quality control systems and traceability, this solution has given the flexibility to react in a way which would have posed its previous processes with challenges. 

Major US based food packer, Bell-Carter Packaging, has seen digitalisation provide a raft of benefits too. Integrating technology into operations has meant that its labour can be much more effectively tracked, delivering more accurate costings for clients. In addition, the provision of a real-time view on production performance has also driven improvements in productivity, while dynamic scheduling and materials planning functionality have enabled quick adjustments to be made to deal with changes in demand, bills of material versions or product substitutes.

For every company working with clients in the food sector, traceability information is a key and digitalisation is vital in quickly providing this quickly and efficiently. Traditional supply chains relying on paper-based systems often face logistical challenges in the event of product recall and tracking down and quarantining specific products using dated methods can be both time-consuming and error prone. Digitalisation permits fast and easy tracking of materials and inventory at the batch and item level, and traceability takes minutes rather than days.

Alongside improving traceability and recall readiness, a digitalised platform delivers other important benefits, particularly when it comes to sustainability. Waste reduction and material consumption has become a major area of focus for many brands in recent years. With external supply chain partners managing materials and inventory, the potential for waste is considerable as brands have limited visibility into their external network’s resources. Through digitalisation, however, brands and their suppliers can better identify and manage stock levels allowing for the reduction of supply chain waste. With precise information at their fingertips, brands can avoid the need for safety stock and suppliers can reduce stock write-offs from lower material obsolescence.

For external manufacturing and co-packing suppliers who have not yet invested in digitalisation, it is clear this move can increase efficiency, quality, sustainability, and profitability while reducing risk and costs. Most importantly, suppliers can strengthen and optimise service to their brand customers and earn the reputation that will win them more business. Ultimately, the innovative leaders in the contract packing industry will be those who realise the value in digital transformation and implement accordingly. 

Josephine Coombe is managing director of Nulogy in Europe. 


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