Food and beverage manufacturers across the globe are increasing their focus on supply chain improvements after pivoting to meet the challenges raised by the pandemic. According to IDC, an impressive 96% of food and beverage manufacturers will focus specifically on visibility, with 51% concentrating their efforts on the end-to-end supply chain.
The pandemic exposed previously unknown weak spots in the food and beverage industry, from environmental changes to trade tensions and ever-changing regulations. The solution? Strengthening those vulnerabilities and increasing transparency across the supply chain.
64% of food and beverage manufacturers believe that a lack of supply chain visibility and flexibility will cause significant issues in the future if not addressed appropriately, and 46% say that supply chain visibility is a focus from a supply chain risk management perspective compared to only 30% in 2018.
Urgent improvements in supply chain visibility are required, as food and beverage manufacturers look to fulfill customer expectations regarding product quality and compliance while remaining competitive.
In addition, you need to be able to handle the complexity that the end-to-end supply chain brings, from shipping and storing perishable goods within strict temperature parameters to information requirements about the origin and ingredients of products.
Traditionally the food and beverage market focused on traceability because it was beneficial for regulatory compliance in the food industry. But as technology advances and the industry better understands the power of data, traceability is becoming a crucial part of day-to-day business and competitive differentiation.
Here are five takeaways from IDC’s End-to-End Traceability in Food & Beverage: From Regulatory Compliance to Competitive Differentiation report:
1. Traceability can improve visibility
Traceability identifies all relevant data for the materials used in the production and distribution of finished products. Thus, it is the tracking and tracing of your supply chain.
Tracking focuses on progression: Tracking occurs when you can see how products progress from one sequence to the next and how they move through the manufacturing process through location data. Internally, you can see where products are, who has worked on them, and how long until they’re finished.
Tracing focus on authentication: Tracing allows you to identify products through records and supply chain visibility. With data such as certifications of origin and purchase order numbers, you can link products to their sources in the supply chain.
Good traceability is only possible if:
1) Information from manufacturers, suppliers, and distributors is effectively recorded.
2) The systems covering different process steps are connected and integrated.
You can apply traceability to your entire supply chain internally when it focuses on tracking the receipt and intake of raw materials to manufacturing processes and externally as you distribute finished goods to their final destinations.
IDC’s research, which features 140 medium to large-sized organizations, suggests that many process manufacturers have room for improvement when it comes to automated traceability:
- 56% of food and beverage manufacturers still have manual processes for traceability
- 18% do not have traceability at all in a formalized way.
2. Automated traceability keeps you compliant
You can improve traceability with a complete automation control system. This would gather data from every level of automation to feed back to the central manufacturing execution system (MES) or manufacturing operations management (MOM).
From the first level of automation, such as sensors at the feed level, the MES must process all this information, such as the timestamp, what supplier the product has come from, and which operator has handled the product. This must then be converted into production data for the plant manager to review.
The MOM system guides the operators and ensures they perform their tasks correctly, avoiding deviations and non-conformances.
In addition, all the relevant data such as material lots, quantities, test results, and process parameters are collected along the complete process to ensure full forward and backward traceability.
3. Move towards being proactive with technology
It’s always better to prevent problems before they arise. Appropriate investment in technology such as Enterprise Resource Planning (ERP) software enables the end-to-end visibility of operational processes.
ERPs allow you to download an entire product history as and when you need to, from ingredients used to finished goods, taking into account multi-site, multi-company, and multi-legislative product journeys.
Accessible data across the product value chain lets you understand:
- Who supplied the raw materials
- Who validated the raw materials
- Which steps went into each process
- Who handled and signed off on the final product
- Who shipped and delivered the final product
- Who on the customer side validated the final product
This a stepping-stone to driving business value by creating other business opportunities. With access to data across the end-to-end process, you can analyze the supply chain for insights and improvement in:
- Quality control
- Planning and scheduling
- Sizing quality and sustainability initiatives to the real needs of the individual markets
4. Create business value through better customer relationships
A European scandal developed in 2013 when food advertised as containing beef contained undeclared or improperly declared horse meat. It was a wake-up call to the food and beverage manufacturing industry.
Today, customers and industry regulatory bodies are increasingly demanding product safety and have deeper requirements for detailed information than ever before.
In the event of a product recall, traceability can be the key to protecting both the consumer and your reputation. The standards around food safety and quality have never been higher, and letting consumer doubts surrounding your products sit and stew could have a lasting effect on your brand value.
Traceability can catch these issues early on, providing visibility in what gets manufactured for consumers and businesses. Through end-to-end value chain traceability, you can show retailers that you are a viable, trustworthy supplier and can offer the depth of information today’s customers crave.
Digital traceability also allows you to increase the value of your brand by highlighting and providing that your products come from environmentally sustainable and ethical sources.
Investing in traceability is necessary from a regulatory perspective, but it’s essential to understand that it can positively impact the long-term brand value of your business.
One example is UK-based organic baby food maker Ella’s Kitchen, which has become one of the most trusted food brands in the country via its “full traceability, field to farm, factory to family” credentials.
Since the company’s inception in 2006, it has achieved year-on-year double-digit growth or more. In addition, you can use your brand differentiation to higher levels by creating a direct relationship with end consumers via direct-to-consumer (D2C) channels.
5. Use traceability as a business case for digital transformation
Having access to accurate, real-time information is key to effective traceability. To this end, the pockets of siloed data in applications you have can be harnessed then and shared across your business with appropriate user permissions in place.
Becoming digitally mature means transforming your organization into one that can compete better in an increasingly digital environment through the latest developments in cloud technology. Continuously adapt and get a better handle on traceability due to digitizing your data and processes in digital transformation.
Another way of looking at it is that by the very act of starting an end-to-end traceability journey, the digital transformation program of a company receives a boost, essentially helping to lay down a digital foundation.
Digital maturity puts you in an excellent position to fulfill quality, documentation, and traceability requirements. In addition, with end-to-end visibility enabled by digital technology, you can optimize your supply chain and improve your customer experience.
Approach your growth with a substantial commitment to traceability and drive increased value from your technology investments.
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