Why Brexit will put supply chain management under the microscope for the food production sector
At the time of writing mid-November 2020 Brexit is still in limbo, we are in lockdown number two, and the food production sector has more questions than answers at so many levels. But one of the key areas we know is going to be impacted by Brexit is how businesses will need to work with and manage supply chains.
We all know that consumer consumption habits have already changed due to the pandemic. But because of the resilience of food processors, the industry has been able to cope and adjust. However, what Brexit brings is a potential for huge logistical and therefore planning challenges for a whole range of producers.
For those producing fresh and short shelf life products, dealing with the road, rail and airfreight implications brought about by Brexit and impacted by COVID-19-19 will call for a laser like focus on sales and operational planning (S&OP).
To correctly manage S&OP, a food processor needs to be able to integrate its business management processes. By doing so, everyone involved requires access to accurate data to enable informed decisions that support order fulfilment against the demand/sales forecast. When we look at how to create integrated business management processes that support S&OP, we focus particularly on four key areas, which I will also cover in more depth in future articles:
- Sales Forecasting & Scenario Planning – A prediction of sales over time, typically looking at different time horizons, factoring in variables such as seasonality & grade of the product.
- Inventory Planning – (Plan to Produce, Available to Sell) What stock is currently available/planned (Raw Material, WIP, Finished Goods & Packaging) and what will be required.
- Supply Planning – (Stock & Order) How & when to manage the ordering and availability of raw material
- Production Planning & Scheduling – How to optimise the production process and react to order changes, against order demand within the multiple time horizons.
Meeting your key KPI’s – Order fill and Serviceability, or OTIF.
Because the Integreater Solution Suite has been developed to deal with the many complex daily challenges that today’s food producers face, we enable teams to collaborate using the same consistent information. This is because every change, amendment and action, including activity captured from the shop floor, is captured and processed, to enable insight.
More importantly, this information is made available to all stakeholders and can be delivered in tailored S&OP focused formats, including via connected devices.
React in real-time, plan for the long-term
The real benefit of SI generated data is not just for those ‘in the moment decisions’ in fact, it’s as much about how we enable long-term strategic business/inventory planning that make it such a powerful tool.
Our customers will use data to benchmark and improve product quality and overall profitability by blending it together. Taking QA and seasonal information as an example, historical data can show how well growers’ crops have yielded. Equally, for dairy products, you can understand the differences in seasonal cream content from summer to winter, rain or drought. You can even see what types of animal would be better to send to market etc.
Success is all about having the right business intelligence and reporting.
As we move towards Brexit, there are so many decisions that can have a positive or negative impact on the management of your supply chain and all of them are linked to how sophisticated your intelligence can be. It might sound complicated, but the solutions already exist to help you uncover challenges, benchmark data and drive an effective S&OP process. The key is acting now to put them in place and be prepared for whatever challenges Brexit and COVID-19 deliver next.
Thanks for reading, and if you want more in-depth information on this topic, please don’t hesitate to contact me at phil.linton@siltd.co.uk. I will also be adding more detail to the different elements of S&OP in future posts to keep an eye out for them.