COVID-19: Exposing the Need for Digitizing Your CPG Supply Chain
We’d like to introduce our guest blogger Bryan Cohn, who is a Food Safety Solution Engineer at FoodLogiQ. Drawing knowledge from Bryan's experience leading supply chain operations at food manufacturers and retailers like Seal the Seasons and Couche-Tard, we’ve asked him to share some guidance and considerations for CPGs working to survive (and even thrive) as they navigate COVID-19.
Consumer Packaged Goods companies have experienced unique challenges during COVID-19. As the crisis has evolved, you’ve evaluated your options and optimized business streams and strategies while working to meet product demand. You’ve pivoted toward new revenue opportunities, perhaps focusing more on direct-to-consumer as well as consumer retail packaged goods and less on instinctual packaged products. These circumstances and difficult choices that have affected your bottom line have changed the people who’ve helped make your business successful.
Now let’s take a minute to pause and think about building a more resilient business beyond COVID-19. It’s important to level-set by asking some challenging questions about what you’re facing as a consumer packaged goods provider. It doesn’t feel like it at this point in the crisis, but challenges can actually become opportunities if you see them through a new and different lens.
Adjusting to a ‘New Normal’ is going to require flexibility and a commitment to building new efficiencies with a focus on technology. Although social distancing and remote working make it difficult to maintain physical processes such as handling documentation, checklists and other items critical to supplier management and compliance, developing digital methods with a robust communications workflow will illuminate the impact of these new distancing constraints that will be with us for some time.
Incorporating Digital Methods Amid Shifting Ground
There is currently an unprecedented level of supply chain complexity within the CPG industry. According to the Consumer Brands Association (CBA), demand for products have skyrocketed during the evolution of coronavirus, with members reporting they have seen an increase in orders by as much as 700% as consumers have stocked up while practicing social distancing. These rising sales have put pressure on food manufacturers to operate at capacity, resulting in heightened requirements around health practices, sanitization, on-location staffing, records keeping and agile response programs. At the same time, manufacturers are navigating how to support their staff in working remotely, while executing audits that were initially designed to be on-premise. Conducting virtual audits and reworking standard operating procedures are important measures for accommodating the growing portion of operations happening off-premise across industries.
As the manufacturing industry continues to navigate the unpredictability of this crisis, it’s time for some intense reflection on your business and its SOPs. Is your organization properly equipped with a cohesive digital strategy? How are you managing processes in light of the shifting ground of the CPG landscape? It is nearly impossible to manage required documentation, supplier onboarding, and auditing using manual processes, and the increased stress that COVID-19 has brought to your production facilities will only complicate matters. Most importantly, how will your company leverage the data you do have? Are you being smart and methodical about how you protect your employees, your product quality and your supply chain? Without data insights that digitization provides, you are fighting an uphill battle.
Food for thought: Using FoodLogiQ Connect, you can create the appropriate digital processes such as onboarding workflows, conducting audits and assessments, and capturing quality incidents for your specific organization. By streamlining these procedures, you have the power to report that data to relevant stakeholders quickly and efficiently. Because FoodLogiQ uses a template-based form builder, you can immediately update and deploy your digital processes as needed.
Success = Planning and Pivoting
The first two quarters of 2020 have been a time of chaos for public and private businesses throughout the US. Companies have learned a lot about their strengths and their weaknesses, and many have realized that being both prepared and nimble is critical to their viability. Engaging in social distancing and working remotely has highlighted certain inefficiencies and unnecessary redundancies in our workflows which require you to tap a colleague on the shoulder to ask a question about a recent shipment, retrieve inventory information, or email a colleague in a different department about a document approval that may be needed.
You must be able to quickly track products and ingredients throughout your supply chain, then isolate, remove, or re-deploy them to meet your business objectives. Rethinking how you onboard and communicate with your supplier network is also crucial; you can't afford to waste time and effort trying to collect documentation and validating your supplier criteria.
Food for Thought: FoodLogiQ Connect allows you to establish requirements based on the supplier's risk or location or any other criteria that matter to your business. Our platform automatically requests and collects information and distributes it to the appropriate parties, saving you time and effort.
The ‘New Normal’ Calls for a New Approach
Traditionally, CPGs have operated on a ‘just-in-time method,’ an inventory strategy in which materials and products are only ordered and received as they are needed. Now that the world’s supply chain has been turned on its ear, the reality is, we need to re-think our operations. The ability to control production capacity has been a hallmark of our industry for quite some time. Unfortunately, in our current environment, the COVID-19 health crisis has highlighted some significant challenges.
As production lines slow, maintaining a consistent just-in-time supply of ingredients (as well as finished products) has become difficult to achieve. Time lag has also highlighted that our inventory management systems are not adequate to tell us where our products are, how many ingredients we have available, and what is currently running through production and out for delivery. Implementing a robust traceability program in conjunction with your typical inventory management systems will allow you to see what you have and where it is right now. Imagine if you could understand the real-time efficiency rates of your production facilities and then re-deploy the necessary ingredients or materials to support your production capacity. Adopting digital processes does just that. You can compare and report on audits and incident reports as they are being submitted. At the same time, you can review the output of your production and analyze it from one line or facility to the next.
Food for Thought: Take an earnest look at which areas of your company could use improvement — whether it’s supplier onboarding or lack of insight with both your processes and people. What have you learned during COVID-19? Where do you need assistance? FoodLogiQ provides a variety of resources designed to show you how technology can simplify and streamline your supply chain. Our team would be happy to talk with you about your current processes and help you develop a plan for moving toward a more digital environment.
A North Carolina native who’s passionate about agriculture, food, and business, Bryan Cohn came to FoodLogiQ after serving as Vice President of Supply Chain and Market Development at Durham-based Seal the Seasons, a company specializing in local frozen foods. He has extensive experience in large scale food-service and operations management, having held leadership roles at Couche-Tard (parent company of Circle K) and the Columbus Zoo and Aquarium.