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Data driven insights for smart supply chain in food manufacturing industry
Data driven insights for smart supply chain in food manufacturing industry

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Below are some of the learnings from the discussion on “Embedded Systems for data driven decision-making: Smart Supply-Chain Advantage” from the 13th NASSCOM Design and Engineering Summit held in Oct 2021

Due to the wide variety of products, food manufacturing has a very complex supply chain, ranging from products from shelf to field. However, this comes with its own set of challenges including on-time and on-demand solutions.

 

What are the opportunities, considerations, and challenges with supply chain in food manufacturing?

In food manufacturing, it is very important for the supply chain to be extremely agile, given the shelf life of the products in question, to fulfil the evolving expectations of the consumers. It is important to define the supply chain which is truly consumer inspired. The emphasis is on “shelf-to-field” as it begins with the consumer’s expectations and then one must backtrack and assess the downstream and then define the end-to-end supply chain.

The end-to-end supply chain includes planning, sourcing, manufacturing, and distribution. Sometimes, while planning, sourcing is not analysed in-depth, but it is imperative to make planning more effective and hence sourcing partners need to be involved in the entire supply chain planning. While manufacturing, the same is necessary and ultimately the manufactured product is delivered to the consumer. One must take advantages of evolving channels, markets, so that the supply chain itself is ready to respond to the evolving market needs.

Enveloping all of it is the umbrella of digital technologies. Challenges in digital transformation should not just be limited to proof of concept and testing, but the ability to scale up when necessary. In addition, an enterprise should not go digital just for the sake of going digital. There has to be a strong business linkage and digitization should provide a strong competitive advantage for the company. While undergoing the digital transformation journey, the enterprise must keep cybersecurity in mind. Having the right barriers, processes, and controls in place to make digital journey a sustainable one going ahead is imperative.

 

In consumer goods industry, one is dealing with perishable goods. How is technology used to help with the demand fluctuations and how are suppliers onboarded as a part of the company’s overall strategy?

We are living in VUCA world. It is important to have the right forecasting abilities and not rely only on the traditional way of forecasting, which is based on historical data. In a volatile environment, if the forecasting is not done effectively, it impacts the overall reliability and creates a cascading waste impact in the supply chain. Therefore, it is necessary to have a more robust, advanced statistical way of forecasting, which includes multiple variables working simultaneously and which helps in predicting at a granular level. The transition from traditional to digital AI/ML based forecasting is a journey that everyone must adjust to and take advantage of.

Post pandemic, one has viewed supply chain in a myopic way. It is not just one particular company’s supply chain alone, but the suppliers’ supply chain is equally important. The entire supplier ecosystem’s involvement in an enterprise’s business continuity planning, driving vendor management inventory, electronic data interchange, etc. will make it a synchronized and synergistic supply chain. This enables the supply chain assessment to be done on a real time basis for the customers as well as the suppliers and create an online feedback mechanism which can be addressed on a real time basis to build the right resilience in the supply chain. Hence, moving away from one’s own supply chain to incorporating the suppliers’ supply chain is the journey that all enterprises need to embark on.

 

How is the logistics aspect of the supply chain managed in a food manufacturing industry, especially post pandemic?

Post pandemic, the biggest disruption and most impacted sector has been in the logistics sector. Companies such as Mondelez are working on an aggressive “track-and-trace” mechanism, which involves not only tracking the entire fleet location wise, but also tracking the temperatures of the perishable products as they move across the cities. This enables an organization to get a real-time visibility of the transactions at play and plan the response time that can be accommodated on a real time basis and not on a reactive basis.

Another impact of the covid pandemic is on the channels. In India, we have a presence of mom-and-pop stores, organized retail, and a booming e-commerce. A “one size fits all” approach to supply chain and logistics wont fit. All these channels behave very differently, where consumers have very different expectations. The agility of the supply chain to consider each channel and their complexities can become a huge competitive advantage for a business.

 

How does sustainability figure in food manufacturing industry? What strategies have companies adopted on sustainability? How is wastage optimized in this industry where goods are perishable?

Many companies like Mondelez are adopting a “zero-loss” philosophy. Every person in the organization is working towards a “waste-to-wealth” journey. A lean six-sigma philosophy has been adopted to avoid waste. This integrated approach, using a six-sigma philosophy, helps the companies understand where they are and what are the best practices available and how best to incorporate those best practices to become a best-in-class organization, and in the process eliminate waste from the supply chain. This zero-wastage mindset in each person has a cascading effect on the sustainability goals.

Therefore, using technology, getting real time data analytics, incorporating the complexities of the products, and involving the supply chain of suppliers, an organization can simplify, improvise and provide an end-to-end visibility, whether it is from the suppliers’ point of view, or logistics or zero waste.


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Vandhna Babu
Principal Analyst - Research

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