The concept of supply chain visibility is gaining momentum, thanks largely to trends shaping the way consumers interact with and make demands of the places they shop and dine. Consumers now want sustainability, farm-to-table freshness, and fair-trade practices to feel better about the food they eat and the treatment of those who grow/process their food.
With supply chain transparency, food and beverage (F&B) companies can offer information about product origins, quality, and related handling, manufacturing, and/or processing. Providing this information builds customer loyalty, which boosts company reputation and profit margin stability.
This post delves deeper into consumer trends and how to align your operations, specifically supply chain visibility, to satisfy today’s savvy consumers.
The farm-to-table movement has expanded across Europe, North America, and Asia. Consider, for example, the burger chain B.GOOD – each restaurant is decorated with a mural depicting where that location’s food originates, including the names of the farms and facts/data about farming sustainability.
How mainstream are these movements? Consider the recent IBM Blockchain ad that focuses on “fair trade practice", which shows IBM's depiction of fair-trade-aware consumers juxtaposed against African farmers who now get a fair deal thanks to technology.
The fact that IBM is running ads to speak to the fair-trade-minded among us demonstrates the power this trend has in today’s food and beverage economy.
Consumers are telling F&B producers and distributors to prove it when they claim their products are fresh, organic, fair trade, non-GMO, gluten- or allergen-free, etc. Fairtrade councils and consumer protection bodies exist to expose and penalize suppliers that make false claims on packaging.
For small and midsized F&B suppliers, finding the budget to install factory, warehouse, and supply-chain-wide product and ingredient track-and-trace capabilities sounds daunting and expensive. Lacking subject matter expertise, you may think an expensive consulting engagement followed by a massive technology implementation is necessary – but it’s not. Today’s modern ERP systems, like SAP Business One, provide the capabilities, functions, and information flows necessary to gain the level of supply chain visibility today’s markets require.
Modern ERP systems are widely used for their high-level inventory and location control functions. Commonly, F&B suppliers track product movements by batches down to the ingredient level, lot numbers as products move to and from the warehouse, and through the entire production process. As F&B suppliers incorporate new and increasingly complex sets of rules governing food safety and quality checks, the ERP system manages this information and its associated reporting.
For example, modern ERP can incorporate workflows that produce product labels and prohibit products from passing to specific stages in the fulfillment cycle before traceability and labeling checks occur. This can be modeled in ERP workflows to correspond with any new customer trend.
Consider this very common scenario using modern ERP:
You perform quality and traceability checks, and the ERP system unifies batch-related data, which includes results from sample testing, expiry dates, traceability data, and manufacturing QC data. From there, the system lets you model processes and automate them so the QC data becomes tied to every batch produced or handled. If you manufacture product, this begins with pulling data about raw material and raw material suppliers, moving through production and extending to information surrounding retail-level product returns and consumer-satisfaction data. If you only warehouse and distribute, the process is even more straightforward: obtain the manufacturing QC data from your suppliers.
Either way, the information is unified in a single system, and you can either report it to your supply chain partners and customers or invite them to view the data by granting them role-based access to the ERP data via a portal. You run your normal daily operations from your ERP system while upping your supply chain visibility game at no additional cost. This enables your customers to back their claims to consumers and say “yes” when asked if the product labels are accurate.
As an F&B supplier operating in today’s hyper-aware market, you need greater transparency to survive, much less thrive. If you can’t collaborate with customers via a simple IT infrastructure that sheds light on your supply chain, you need to consider a modern ERP system – it’s the most efficient way to connect people, processes, and data across the extended food and beverage supply chain. Contact us today to discuss how Sapphire can help you gain transparency across your supply chain.
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