Strong foundations are a critical – and often overlooked – element of an efficient, cost-effective supply chain. Ignore them at your peril, warns Mark Holmes
In recent years, the focus within food and beverage (F&B) supply chains has been largely on the last mile – the final step of delivering products to consumers. To some extent, this emphasis is understandable, given the rise of quick commerce and home delivery services like JustEat and Deliveroo which have adapted to include groceries, as well as takeaways, and retailer equivalents such as Tesco Whoosh.
Even major brands like Heinz, Unilever, and PepsiCo have ventured into direct-to-home delivery for selected goods. However, this last-mile focus should not overshadow the critical importance of the first mile – the initial stages of the supply chain, where raw materials are procured, and products begin their journey.
The hidden costs of neglecting the first mile
The first mile is crucial in setting the foundation for an efficient supply chain. A poorly managed first mile can result in significant issues such as cash being tied up in excess inventory, difficulties in supplier coordination, and overall inefficiencies that ripple throughout the supply chain. These issues can lead to higher operational costs and missed opportunities for reinvestment in areas that directly benefit the customer, such as better products or competitive pricing.
Leveraging data to optimise the first mile
As F&B organisations look to drive efficiencies, reassessing and optimising the first mile should be the first port of call. By harnessing the power of data, businesses can identify and address inefficiencies early in the supply chain process.
However, currently, many companies face challenges such as a lack of real-time data visibility and reliance on outdated manual processes. According to an InterSystems survey of supply chain leaders, 41 percent cite the absence of real-time data as a major barrier to progress, while 39 percent struggle with manual processes.
The ability to quickly ingest, analyse, and subsequently make strong business decisions is crucial in demand sensing and forecasting but antiquated data management processes and inaccurate data (37 percent) are real drags on progress. Nearly a third (30 percent) of supply chain leaders said processes built on outdated algorithms without agility to adapt was a key challenge in this space.
InterSystems research shows the biggest barrier to achieving full supply chain optimisation is having little or no integration of disparate data sources, including systems and applications, cited by 46 percent of respondents, rising to 56 percent in the fast-moving consumer goods (FMCG) space.
As they look to optimise processes and increase efficiency from the first mile and beyond, F&B supply chain organisations must look to overcome these challenges, to better integrate and utilise trusted and clean data.
A smart data fabric architecture, built on an advanced analytics and decision intelligence (A&DI) platforms, is instrumental in providing supply chain organisations with this clean, reliable data needed to optimise the first mile. The smart data fabric accesses, transforms, and harmonises data from multiple sources, on demand. This seamless integration of the various data sources involved, both within and outside of the organisation, provides F&B supply chain businesses with a comprehensive view of the entire supply chain. This approach allows supply chain firms to leverage usable, trustworthy data to make faster, more accurate decisions in the first mile and beyond.
The smart data fabric also boasts a wide range of embedded analytics capabilities, including data exploration, business intelligence, and machine learning, enabling F&B supply chain companies to gain new insights and power intelligent predictive and prescriptive services and applications faster and easier.
This real-time access to trusted, unified data and intelligent insights presents significant opportunities for F&B businesses across the supply chain, allowing them to improve demand forecasting, optimise inventory levels, and enhance overall supply chain performance.
Data-driven optimisation in the first mile
Continuous real-time data flow and the use of advanced analytics allows for ongoing analysis and optimisation of first-mile processes, leading to improvements in efficiency and productivity. In the first mile, these can include:
Demand forecasting and planning
Integrating real-time sales and consumption data along with sensing anticipated disruptions in real-time helps improve demand forecasting, allowing for better alignment of supply with anticipated demand. It also enables more accurate production scheduling, reducing lead times and ensuring that manufacturing processes are optimised for efficiency.
Automated workflows: Real-time data can trigger automated workflows for tasks such as order processing, invoicing, and inventory updates, increasing operational efficiency and reducing manual intervention.
Improved communication: It can also facilitate instant communication between suppliers and manufacturers, allowing for quick adjustments to orders based on current demand and supply conditions. Similarly, real-time tracking of orders ensures that suppliers are meeting delivery schedules, reducing the risk of delays and ensuring timely production.
Dynamic inventory levels: Real-time data allows for dynamic inventory management, where stock levels can be adjusted in response to real-time demand signals, minimising excess inventory and reducing storage costs.
Stock replenishment: Automatic replenishment triggers can be set based on real-time inventory levels, ensuring that raw materials are available when needed without overstocking.
Quality control: Real-time monitoring of temperature, humidity, and other conditions during the transport of raw materials ensures that they are maintained within required specifications, preserving quality and compliance with safety standards.
Traceability and compliance: Real-time data provides full traceability of raw materials from source to production, aiding in compliance with regulatory requirements and facilitating quick responses to any quality issues or recalls.
Sustainability and waste reduction: Real-time data can help identify inefficiencies in resource usage, enabling companies to reduce waste and improve sustainability practices. At the same time, tracking the environmental impact of sourcing and transportation activities in real-time helps companies adhere to sustainability goals and reduce their carbon footprint.
Delivering better value to customers from first mile to last
While the last mile of the F&B supply chain has garnered significant attention, it is essential not to become complacent over the first mile. Investing in first-mile logistics and operations, supported by robust unified data and advanced technologies, can drive efficiencies that pay off in the long term and positively impact the entire end-to-end supply chain – from first mile to last.
By optimising the first mile, F&B supply chain organisations can reduce excess inventory, improve supplier coordination, and enhance sustainability efforts, ultimately delivering better value to their customers. Smart data fabrics play a crucial role in this process, enabling a seamless integration of data that ensures businesses can maintain a competitive edge in the ever-evolving market.
Mark Holmes is a senior advisor at InterSystems
