Top 10 benefits of supply chain digitalisation

Predictable consumer demand and stable retail channels are things of the past, and today’s manufacturing supply chains need agility and flexibility to keep up with rapidly evolving market conditions.

As brands increasingly lean on their third-party contract packing and manufacturing suppliers to deliver additional capacity, speed to market and specialisation, digitalisation is becoming increasingly critical to ensuring efficiency and accuracy on the shop floor. Here are 10 ways digitalisation can drive agility, speed, and collaboration across fast-moving consumer good (FMCG) supply chains—from brands through to their contract manufacturing and contract packing suppliers.

Ensure supplier ecosystem responsiveness 

Digital enablement is key for FMCG brands that collaborate with their external manufacturing and packaging partners to help bring products to market more quickly and cost-effectively. Through digital enablement, real-time data becomes seamlessly accessible; workflows are streamlined; and critical information such as order milestones, and materials and inventory statuses are easily tracked with shared accountability between the FMCG and their suppliers. All of these efficiencies allow an FMCG’s ecosystem to bring consumer products to retail customers with increased speed, flexibility, and reliability.

Drive deeper collaboration 

Cloud-based platforms can enable true multi-enterprise collaboration by breaking down data silos between partners and bridging the gap between brands and their external networks. For example, production metrics can be more easily managed and tracked, enabling brands to drive continuous improvements in external performance. And although many FMCG organisations may already have internal ERPs in place, a collaborative platform is able to complement these pre-existing systems and seamlessly integrate with external suppliers.

Remove the constraints of legacy systems

Often, suppliers lack the ability to collaborate effectively, shackled by the limitations of manual, time intensive communication methods. Legacy systems, spreadsheets, and the laborious trading of phone calls and emails all fail to provide the levels of responsiveness and collaboration needed today, and further perpetuates costly blind spots of inefficiency within organisations. 

For brands, legacy systems and processes often mean a lack of standardised communication methods across the external supply chain, resulting in reduced visibility into important order or inventory statuses, delays, and quality issues.  Conversely, cloud-based collaborative platforms can shine a light into the “black box” of the FMCG external manufacturing and packaging network, enabling a much more responsive operating model.

Enable greater order accuracy

Due to the “The Amazon Effect”, today’s consumers have little tolerance for delayed or incorrect orders, meaning logistics and distribution – from warehousing to order fulfilment to shipping – must happen at lightning speed with greater traceability. Digitally enabled shop floors can track inventory and materials more accurately, allowing contract packers to avoid obsolete inventory and materials shortages. In addition, order changes are easier to accommodate, as both suppliers and brands have a better view into what’s on hand, as well as greater visibility into lead times, and any potential risks to delivery targets.

Improve shop floor control 

Through a digitalised shop floor, contract packers can optimise production, make better use of labour, reduce costs and support greater throughput on behalf of brands. FMCG brands are seeking these characteristics in their external supply chain partners today, and will reward those suppliers with a greater share of their business. 

Enforce quality control 

Quality control continues to be a high-priority issue. As brands outsource their production to specialised contract packers and manufacturers, they need to know that their products are being created and packaged to exacting standards. Digitalisation of quality checks can enable more rigorous quality controls, improved traceability, and greater recall readiness through easier and faster quality reporting.

Avoid waste and maximise efficiencies 

Brands are increasingly seeking external partners with sustainability-first mindsets. Here, again, digitalisation has a role to play, helping a business reduce its impact on the environment through efficient management of stock and avoidance of waste. Digitalisation enables improved inventory and materials management, ensures accurate tracking of expiry dates, and enables avoidance of materials shortages, all of which leads to reduced supply chain waste and less need for expedited freight.

Enhance traceability 

For every contractor working with brands in the food and pharmaceutical sector, traceability information is key—and digitalisation is vital in providing this quickly and efficiently. Unlike manual quality control processes, a digital solution can fulfil the real-time traceability requirements that brand customers will expect, by frictionlessly tracking the consumption of lot codes and expiry dates for each pallet produced, and enabling comprehensive, lightning-fast responses to customer audits and recalls.

Reduce risk of error and downtime

A digitalised shop floor will realise faster line performance insights by monitoring real-time production performance and tracking unexpected downtime, as well as being able to quickly compare the expected costs versus actual costs without needing to manually compile information.

Protect supply chains from labour constraints 

With the continuation of COVID-19 absences, post-Brexit consequences and record numbers of people voluntarily resigning from their jobs, the severe impact on labour capacity has meant many businesses are focusing on developing strategic solutions for ongoing staff shortages—and digitalisation is helping them to maintain productive operations. 

• Josephine Coombe, Managing Director for Nulogy in Europe. 
  

About Nulogy

Nulogy is a leading supplier of digital supply chain solutions, and enables customers and their supplier communities to collaborate on a multi-enterprise platform in order to deliver with excellence to an ever-changing consumer market. 

The Nulogy Multi-Enterprise Supply Chain Business Network Platform optimises upstream supply ecosystems, composed of brand manufacturers, contract manufacturers and packagers, third-party logistics providers, raw material and packaging suppliers to accelerate supply chain responsiveness and collaborate at the speed of today’s market. Nulogy’s Shop Floor Solution is the leading contract packing software platform globally.