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Accepting disruption as the new normal

29 April 2022

Marcel Koks explains how food manufacturers can use technology to boost supply chain resilience in the face of ongoing disruption. 

Undoubtedly, Covid-19 has pushed the food supply chain to its very limits with a perfect storm of challenges. A shortage of workers and skills, in combination with sea containers stuck in harbours and spiralling transportation costs, not to mention the rising price of raw ingredients, means that many food manufacturers are struggling to meet demand while staying profitable. 
 
What steps can food manufacturers take to boost their resilience against such challenging conditions? Covid-related pressures certainly do not seem to be going away any time soon, and food manufacturers are realising that they need to get used to disruption being the new normal.

The Centre for Food Policy describes the food system as ‘the interconnected system of everything and everybody that influences, and is influenced by, the activities involved in bringing food from farm to fork and beyond’. Right in the middle of this complex system lie food manufacturers and processors – exposed to weaknesses and challenges at both ends of the wider supply chain. 
 
Many businesses have identified a need for more flexibility and agility right across the supply chain – establishing more joined-up working, comprehensive visibility and a renewed focus on creating more intelligent supply chains able to adapt quickly and effectively to changing demands. At the same time, the ability to identify potential bottlenecks and inefficiencies before they have a detrimental impact is paramount – taking steps now to create more resilient supply chains.
 
With disruption quickly becoming the new normal, how can food businesses strengthen these weaknesses, creating more resilient supply chains that are able to scale and flex in-line with ever-shifting demands and challenges?
 
Going digital
The go-to term for the last few years, ‘digital transformation’, is often heralded as the panacea for all business ills. But, for food manufacturers in particular, for whom ever-shrinking margins are always a concern, full-scale root-and-branch digitally transformed supply chains aren’t always a viable option. Instead, by breaking larger projects down into more manageable initiatives, it is possible to yield tangible benefits, helping to build a case for further change elsewhere in the organisation.
 
Maximise visibility
High on the list of priorities has to be ensuring optimum levels of visibility and transparency – making the most of the information available from the wider supply chain to optimise operations. The only way to do this is by standardising and uniting business systems right across the business. 

This was the case with Kalsec, a producer of natural taste and sensory solutions, food protection, colour solutions and advanced hop solutions for the food and beverage industry. With eight locations around the world, selling to customers in over 80 countries and sourcing from approximately 40 countries, its supply chains are sprawling and complex. Kalsec also has to contend with the management of thousands of ingredients, manufacturing formulations and products. But, with disjointed systems in place in different regions, getting a real-time view of global operations posed it with some challenges.
 
"We implemented Infor’s enterprise resource planning (ERP) system and product lifecycle management (PLM) system for process across our global sites to connect all regions and to gain a single source of truth for our core business processes,” explained Robert Wheeler, executive vice president – chief supply chain officer at Kalsec. For example, the ERP system helps manage inventory at every location. Kalsec now has real-time visibility across its entire supply chain from pending receipts from suppliers all the way through to shipments to customers and everything in between.  “This technology is providing us with the insight we need to make rapid and informed decisions, which of course, is the key to building an agile business,” added Wheeler.
 
Additionally, it is this level of oversight and visibility that helps businesses readily identify where inefficiencies and bottlenecks lie, enabling them to take action before looming problems negatively affect operations.
 
Increased efficiency
The bringing together of disparate systems also eliminates time-consuming manual processes, streamlining operations and increasing operational efficiency. “We needed a system that could interface with other key applications used in the business to help us streamline processes and improve our response times to customers,” said Wheeler. This was all delivered via fully integrated systems, doing away with the need for duplicate data entry, a process that is both time-consuming and error prone. For core elements of any food business, such as ensuring regulatory and health and safety compliance, such efficiency is paramount, ensuring not only greater accuracy of information, but speeding up the administrative burden that is part-and-parcel of operating within the international food and beverage industry.
 
Planning excellence
When it comes to fulfilling customer demand having quick access to precise and timely stock and inventory levels and forecasts enables a food business to ensure orders are fulfilled, implementing contingency measures when necessary if, for example, delays to ingredient deliveries are predicted. Purchasing decisions can also be made based on accurate stock positions. It is the transformation of information into insight that allows all this to happen, with businesses able to make sound decisions that are grounded in accurate, timely and contextualised insight. This is what creates an agile business, boosting supply chain resilience thanks to the insight and foresight that the right systems can provide.
 
Kalsec, for example, is able to take customer orders and pre-allocate them to manufacturing orders that haven’t even started yet. The business can then pair this information with lead time data  – and other business data – which facilitates more accurate predictions of when products will be shipped. 
 
As disruption continues food businesses need to become accustomed to this new normal and supply chains need to reflect it. The only way it can be achieved is if those businesses at the heart of the supply chain boost their agility accordingly, using in-depth business insights to inform not only their own operations but the wider supply chain too. By making the most of the information available, food manufacturers are in a good position to lead by example, helping to create agile, flexible and friction-less supply chains, ready for even the most unexpected of challenges.

Marcel Koks is industry and solution strategy director, Food & Beverage at Infor.


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