As food and beverage retailers and restaurateurs take quick action to stay profitable, their suppliers must respond with a strategic approach to building supply chain resiliency and flexibility.
While companies rarely, if ever, plan for a pandemic, they certainly do look for ways to rebound and rebuild their business strategies. Food and beverage manufacturers, processors and distributors are no exception from this reality.
More than ever, brands must immediately sense when demand for their products shifts and respond appropriately by pivoting their supply chains, while keeping their workforce safe, resources sustainably sourced and operations continuous and seamless. And, while this is a tall order for any business, the stakes couldn't be higher for food and beverage companies.
Some market indicators suggest that the pandemic's unbalanced economic impact will influence how suppliers reach the marketplace. For example, high-end restaurants and retailers could undoubtedly benefit from mass vaccinations and lifting restrictions.
Challenging times call for digital resiliency
Over the last few months, many industry executives worldwide are considering various diversification strategies. They include partnering with ghost kitchens to supplement their restaurant business and repackaging their products for grocery consumers or online direct-to-consumer channels. Some leaders suggest subscription-based meal kits and corporate sponsorships for work-from-home convenience.
On the surface, the options for food and beverage businesses are only restricted by their imaginations. However, when they dig a little deeper into their operational capacity, supply chain efficiency and supplier network, considerable risks begin to emerge, ranging from overproduction and waste to slow reaction to recalls and less-than-optimal product allocation.
Fortunately, many food and beverage companies have already begun to implement technology to capture consumer and retail data and increase supply chain visibility. But, they still need to digitalize their processes and business functions further to support integrated business planning. This alignment of financial, sales, production, procurement and marketing insight leads to a single supply chain strategy rooted in real-time information.
Preparedness means acting early with flexibility
By managing strategic, tactical and operational planning with one platform, companies can synchronize demand and supply. Doing so enables supply chain owners and their stakeholders to gain insight into their suppliers, sales channels, retail and restaurant customers and consumer trends and react with quick-pivot strategies, such as:
Uncover blind spots in a nuanced industry. Food and beverage supply chains must act swiftly and decisively to help ensure inventory output is optimized to yield favorable profitability and avoid loss. Achieving this delicate balance calls for a single point of access to normalized, real-time data into supplier performance, customer order trends and consumer preferences and behavior.
With advanced analytics and dashboards fully integrated with supply chain systems, functional decision-makers can improve forecasts, demand planning and code date tracking. Plus, they can make accurate decisions on the fly to prepare for future shipments and monitor average daily sales without losing inventory to unnecessary spoilage and expiration.
Fuel growth with strategic supply chain planning. Growth across locations and channels often reveals ineffective systems and processes not equipped to scale product allocations quickly. By breaking down silos among planning, finance and sale functions, food and beverage supply chains can improve cross-functional information-sharing and collaboration to align distribution with demand.
With comprehensive planning, they can also benefit from inventory and sales visibility, process automation, and what-if scenario analysis. The planning team can focus on exceptions and value-adding activities while immediately releasing orders into an enterprise resource planning (ERP) system to reduce location errors and accelerate processing time.
Secure product safety with “flawless” recalls. Even the smallest food and beverage brands often manage a high volume of SKUs across a complex supply chain network. And, when that inventory is primarily make-to-stock, every additional item brings significant challenges when managing inventory activities, particularly recalls.
Inventory optimization technology allows these businesses to create a standard, centralized process for setting inventory buffers and safety stock targets across all supply chain tiers and to know the location of every item on store shelves and restaurant kitchens. Meanwhile, decision-makers can discover opportunities to increase service levels, lower costs and improve agility, while minimizing the risk of low-quality products.
Integrated business planning leads to reimagined food and beverage brands
After a year of swift and unexpected changes, consumers across all walks of life have picked up some habits that may last long after the pandemic. They have sharpened their culinary skills and curiosity to learn how to make the “perfect” cup of coffee, bake bread and pastries from scratch and put together a healthier version of a dish from their favorite chef. And, some have even gone as far as dabbling in the art of mixology.
But, will people rely on these skills even after the Coronavirus disease (COVID-19) restrictions begin to lift and full-service restaurants, bars and other eateries gradually reopen to their usual capacities? No one knows with 100% certainty. But, what we do know is that food and beverage manufacturers, processors and distributors must prepare to turn demand variability into a new revenue opportunity – no matter how much market dynamics fluctuate and vary.