By Jason Tham, CEO of Nulogy
While consumer brands have always partnered with external manufacturers and packagers to bring products to market, there has recently been an increased reliance on external supply chain partners to provide the responsiveness and customization that’s demanded by consumers today. This has expanded the footprint of many brands, but it has also added complexity to their supply chain operations, making agility—which is critical in today’s constantly disrupted world—an uphill battle.
Because of the increasing reliance on external partners, the lack of a digitized platform to communicate and collaborate with those partners has exposed the limitations of traditional methods for collaboration
Despite many CPG manufacturers investing in Industry 4.0 solutions to help streamline internal operations, most have overlooked the role of technology in evolving their external supply chain networks to manage this heightened level of complexity, making themselves and their partners woefully unprepared for the significant increases in consumer demand we have seen over the past year. Because of the increasing reliance on external partners, the lack of a digitized platform to communicate and collaborate with those partners has exposed the limitations of traditional methods for collaboration—such as Excel files, emails and telephone conversations—as unwieldy, slow, and prone to error, which can be catastrophic in the face of disruption.
But how can organizations streamline communication with their suppliers for more effective collaboration? They must extend digitalization and Industry 4.0 efforts to include their external networks.
Taking a Network Approach to Digitization
While many brands have undertaken supply chain digitization projects to automate and streamline internal processes, most have taken a single-enterprise approach to digitalization, instead of extending those digitalization efforts to include external partners. By focusing only on improving internal processes, CPGs lose critical opportunities to improve communication with partners, as well as reduce their potential to make data-backed decisions when it comes to supply chain processes such as order and capacity planning. To make a lasting impact, CPGs must prioritize end-to-end supply chain data visibility and partner collaboration.
By expanding digitization to external partners and suppliers, brands create a two-way communication channel that allows for real-time information sharing that ensures all parties have access to the most up-to-date information possible when making critical decisions. With these channels, brands can better meet order deadlines; gain unprecedented access to information to make smarter decisions about managing orders, and improve their ability to choose the right partners to fulfill those orders. For suppliers, this information is crucial to enabling them to better plan shop floor capacity and labor requirements as demand changes.
Having the ability to communicate in real-time is a game-changer for brands and suppliers alike, streamlining processes, improving efficiency and freeing up planning departments to focus on more value-added work than simply tracking progress and communicating issues to customers. This is especially true for organizations that rely on lean manufacturing practices, where there is very little room for error and small shifts in production can have massive impacts on deliverables.
Improving Processes with Multi-Enterprise Solutions
Investing in tools that enhance multi-enterprise process collaboration and data visibility has myriad benefits. By taking a multi-enterprise approach to digitalizing external supply chains, brands can illuminate the black box of their suppliers’ shop floors, extending visibility and improving collaboration between themselves and their contract packaging and manufacturing partners. Digital multi-enterprise solutions enable a collaborative control tower view for both CPGs and their partners, which provide real-time insight into everything from capacity constraints, to order statuses, to on-hand materials and inventory, to production performance and quality attainment. With this information, brands and their network partners are able to work more quickly and collaboratively when responding to shifting demands and expectations.
The centralized nature of these platforms also makes onboarding new partners simple and fast. Now, CPGs and their partners can focus on meeting consumer demands from day one. With the ability to see exactly how suppliers and partners are performing, CPGs can make smarter decisions about which partners to select for each project—reducing the amount of time spent identifying candidates and creating a more streamlined, seamless end-to-end workflow.
Collaboration and communication are the key to supply chain success in today’s constantly disrupted world. Organizations that continue to operate using outdated analog systems and workflows will soon find themselves struggling to remain competitive. By taking a de-linearized and multi-enterprise approach to supply chain and relying on data to make crucial business decisions, CPG leaders can not only streamline workflows and multi-party collaboration, but also strengthen relationships across their entire external network, resulting in a truly agile supply chain.