KANSAS CITY, MO — COVID-19 has accelerated change at unheard of rates. For food manufacturers, the pandemic exposed just how important supply chains are to our survival, while simultaneously placing a spotlight on the need to increase efforts to remedy the gaps in current supply chain models.
A survey from Gartner found the pandemic exposed resiliency gaps with only 12% of food and beverage manufacturers reporting highly resilient supply chains.
Looking to balance trade-offs with efficiency, many food manufacturers made the difficult decision to reduce production to only key SKUs during the height of the pandemic. This in turn drove increased efficiencies and enhanced resilience, but the lack of digital technologies for visibility and advanced planning and organizational silos resulted in a less focused end-to-end strategy.
During a breakout session at American Society of Baking’s virtual BakeTECH conference held Feb. 16-18, Kimberly Becker, senior research director at Gartner, shared that 57% of food companies feel confident about their future supply chain. Recognizing the growing importance of creating resiliency, she shared three opportunities for improvement.
Agility and resilience — Eighty-seven percent agreed agility is the No. 1 supply chain transformation strategy. An agile supply chain can sense and respond to unanticipated changes in demand and supply quickly and reliably without sacrificing cost or quality.
Creating agility through an automated, intelligent and orchestrated end-to-end supply chain includes the ability to conduct scenario planning by building in adaptability and flexibility in networks and operations. This includes making investments in techniques and processes to increase supply chain segmentation, diversification of the supply base by shifting manufacturing, redesigning products to reduce complexity, diversifying markets, improving technology and deepening supply chain relationships.
“Digital dexterity, the fluency in cognitive ability and social practice will be needed to leverage and manipulate media, information and technology for advantage in an innovative way.”
By rethinking the balance, it becomes easier to drive increased resiliency and agility to reduce losses from complexity and volatility.
Digital transformation — While many were looking to digitize to drive efficiencies pre-COVID, digitalization remains a major element of the new normal for supply chains. While digitalization can be the difference between surviving and thriving, many still rely on the use of spreadsheets or battle internally to achieve buy-in, according to Becker.
Ongoing evolutions related to ecommerce and channel shifting make it important to have a network that’s adaptable.
Human Element — The continuing manufacturing skills gap is further amplified by the introduction of disruptive technologies. As the use of artificial intelligence, big data analytics, machine learning, robotic process automation and autonomous vehicles continues grows, it’s important to acknowledge the associated impact to the supply chain.
Becker stressed these digital changes are not a replacement of human activity but an augmentation, one that’s meant to enhance. The tactical elements of digital are designed to exchange data with external partners, execute transactions and monitor performance for partner equipment. Yet a Gartner survey found only 1 in 5 companies have aligned their digital roadmaps and talent strategies with these changes in mind.
“Workers will need to adapt to technology at a more rapid pace,” she said. “Digital dexterity, the fluency in cognitive ability and social practice will be needed to leverage and manipulate media, information and technology for advantage in an innovative way.”
In the digital age, employees must use new skills, be able to partner cross functionally, cultivate awareness of ways to improve things and possess customer knowledge, enabling them to collectively speak the language of the broader business.
“Human precision and ingenuity plus robotic precision and brute strength are better than either one alone,” Becker said. “Humans must co-exist with digital.”