Foodbuy and Anaplan share views on the changing supply chain

Supply chains are experiencing rapid disruptions, and unfortunately, many are unprepared to weather the storm. From pandemics to employment shortages, supply chain leaders need to use new approaches to an established and essential function.

I participated in a webinar, “Survival of the most resilient: Procurement and supply chain strategies to drive agility, resilience, and growth,” with Reuters and Andrew Brightmore, executive director of Compass Group Australia and Foodbuy Australia. We discussed what supply chain leaders need to consider to reach their goals through times of change using new tactics and technology.

Supply chains’ goal

Resilience is key in any industry. But for supply chains, in which people are relying on its ability to meet demand whether they need food or medical supplies, it is absolutely critical to stay functional.

For Foodbuy, the largest national food service and hospitality procurement and supply chain organization in Australia, its supply chain is critical in the health and wellbeing of its clients’ customers. When it’s unable to meet demand to provide consistency supply, it isn’t the loss of a luxury. Instead, it is a loss of a necessity. Without agility and resilience, the damage to both revenue and productivity can be catastrophic, with negative impacts on sales, customer trust and loyalty, and future demand.

Yet resilience is difficult to achieve in the face of constant change when there are limitations to a supply chain leaders’ ability to plan for and react to deviation from established plans or forecasts.

Food service supply chains’ challenges

Global volatility is at a fever pitch. Multiple sources of disruption, including natural disaster and climate change, market fluctuations, worker shortages, and evolving consumer behavior are affecting the success of supply chains worldwide.

One of the factors affecting a supply chain’s ability to be resilient is a lack of visibility into each step of the chain. Leaders without a grasp of the risk threatening supply chain performance are vulnerable to shutdowns or delays.

Additionally, legacy methods of supply chain operations are no longer effective or even feasible. In the recent past, leaders could physically visit a point of issue and work to resolve it in person, or “go-and-see.” Now, the world simply moves too quickly.

“It’s now impossible with limited resources, limited overheard, for your supply chain teams to ‘go-and-see’ every stage in the supply chain,” said Brightmore. Instead, emails need to be returned quickly, problems need to be solved within hours rather than days, and supply chains without visibility and effective multi-enterprise collaboration will be left behind.

Solutions for food service supply chains

To address the challenges outlined above, supply chain leaders need to implement new systems, from technology to processes, to create a more resilient and agile supply chain for food service businesses. Here are the things we identified as critical:

• Breaking down barriers to visibility with centralized data. For Foodbuy, this means creating a two-way conversation with suppliers. With full integration of performance data from third parties with Foodbuy’s plans and historical data, its supply chain leaders can confirm everything is operating to their standards. A key to achieving this cohesion is centralizing both internal and external performance data into one hub.

  Additionally, consumers expect more information from brands they purchase, including how they support their belief systems. If a brand cannot answer to questions about suppliers’ ethics in sourcing or working conditions, they run the real risk of losing customers.

  “They’re asking [questions] of you, the person that’s next to them in the supply chain, but they’re asking questions of the second, third, fourth, tenth tier of your supply chain. If you don’t have visibility into that, if you’re not asking those questions yourselves, if you haven’t got data flowing to back up to help you understand, you can’t answer the customer and the customer makes choices based on that,” said Brightmore.

  This further reinforces the need for real-time supplier collaborations solutions. Without barriers preventing visibility into all supply chain stakeholders’ operations and contributions, it is possible to ensure accurate and satisfactory answers while simultaneously creating contingency plans with newfound foresight.

• Allowing technology to do the hard work. Data doesn’t immediately come with clarity. Technology like Anaplan’s can turn data into actionable insights with scenario modeling and forecasting. This can find situations in need of contingency plans or areas for proactive change to harness a newfound opportunity.

  For Foodbuy, with a supply chain in need of continuous active management, data analysis can decrease the amount of time available to actually take action.

  “I like to let people experiment, because we have this data, but you have to go through that cleanup to say, ‘OK, what is the minimal amount of insights needed to create the biggest impact,’ so we can get out there and work on the impact,” said Brightmore.

• Hiring the right people. Technology is essential, but without the right people to interpret and contextualize insights, they’re simply numbers.

  Personally, I see people interacting with advanced technology at any visit I make to a supplier, factory, or logistics provider. Even when using a centralized data source, skilled and knowledgeable people need to find ways to put insight into action. By applying industry and market knowledge into forecasts, plans can become more effective and resilient to change.

The results of change

Following the guidance of Brighthouse, supply chain leaders can expect to see real change in the performance of their supply chains, such as:

• Improved agility and ability to mitigate damage from unforeseen disruptions. Using the knowledge gained through better visibility both internal and external operations, supply chain leaders can identify solutions to decrease the impact of deviations from plans.

  With visibility comes the ability to see points of risk and opportunity. For example, if one supplier is in an area more vulnerable to the effects of climate change, supply chain leaders can create contingency plans to rely on other suppliers if the need arises. Perhaps this means Manufacturer A increases its typical share of responsibilities to 50% from 25% while Manufacturer B needs to decrease its responsibilities by 25% due to disruption.

  “The more data at your disposal, the more points you see, the more confidence you gain. That helps your resilience, both your mental resilience and your confidence that you know what’s behind you in your supply chain and the planning in front of you. If you want to limit the impact in the business, you couple that planning with a healthy investment in data and data visualization; the stuff you need to know.” Brightmore

• Increased consumer satisfaction. Foodbuy is meaningfully affected by changing consumer behavior. Now they want to buy only ethically created food, from proof of sustainable sourcing to ethical labor practices.

  Foodbuy’s supply chain can be increasingly resilient with more information they can provide directly addressing consumer values. If they can’t answer those questions of their own practices as well as their third-party partners, customers will turn to customer than can.

  “The consumer is asking more questions of the organization. They are making more informed choices about where to spend their money,” said Brightmore. With direct and consistent answers to those questions, organizations can potentially mitigate unforeseen fluctuations in demand due to revelations about manufacturing consumers find unacceptable.

• Great ability to make informed decisions. At its foundation, resilience depends on data, technology, and the skill to contextualize and operationalize it. With a collaborative and uninhibited visibility into budgets, costs, and forecasts, it’s easier to build the right supply chain, the right pricing strategy, and the right plan for the organization at large.

  “In our business, we are absolutely committed to eradicating food waste. If we can look down the supply chain, look at every single point of the procurement process, the sourcing process, the manufacturing process, the better we are, through data, able to see points of waste, human waste process waste material waste and sold for them,” said Brightmore. With this knowledge, Foodbuy can be more resilient in the event of disruption and continue to satisfy the needs of the consumer and the business as a whole.

Conclusion

Resilience is key to surviving in a rapidly changing world. Technology allowing for cross-function visibility, like a Connected Planning tool, makes a tangible impact in supply chain leaders’ ability to make agile choices to be resilient in the face of disruption.

I really encourage companies to look across their supply chain. Think about those potential risks that are maybe outsourced and once we’re insourced. What will happen when you’re no longer at the top of the food chain with that supplier and you have to think about what data exists, what opportunities do I have to reconsider how to bring that important product, material, goods or services back into my company. Armed with those answers, leaders are well on their way to improving supply chain resilience.