The food and beverage industry faces a lengthy list of unique challenges in terms of logistics and supply chain management, right from volatile commodity pricing and inventory management to quality and safety requirements combined with frequent new product introductions, high demand uncertainty, complex manufacturing constraints, and perishability. The need for inventory optimization in the food and beverage industry is growing due to the increase in customer demand, expanding product portfolios, and lengthening supply chains.
Inefficient inventory management in the food and beverage industry results in spoilage of products, resulting in bad supply chain management. This results in poor decision making at all the levels of the supply chain. This leads to a vicious cycle, ultimately reducing sales, profit margins, and customer loyalty.
At SpendEdge, we understand the impact of better warehouse management on supply chain management. And to help companies strive in the competitive food and beverage industry, our experts have highlighted some of the major challenges that they must be aware of and prepare themselves for accordingly.
Just as artificial intelligence (AI) has made its way into finance and healthcare, it is now creating a fourth industrial revolution in supply chain management. The use of AI in supply chain management has brought about operational improvements for companies across the globe. It has made it possible to discover patterns in supply chain data by relying on algorithms that quickly pinpoint the most important factors behind the success of supply networks. Key factors influencing supplier quality, inventory levels, demand forecasting, order-to-cash, procure-to-pay, transportation management, production planning, and more are becoming known for the first time with the aid of AI in supply chain management. This is making supply chains more efficient and result-oriented. In this article, we have discussed some of the significant benefits of AI in supply chain management for 2019.
Benefits of AI in Supply Chain Management
#1. Helps in analyzing large data sets with maximum accuracy
For supply chain management, one of the most challenging aspects is predicting future demands for production. Before any solution of demand management is implemented, the master data needs to be cleaned up. This process of normalizing and cleaning the data costs more, takes far longer, and requires an ongoing effort. The use of AI in supply chain management can help simplify this process and improve the accuracy of demand forecasting.
#2. Improves supplier delivery performance
AI in supply chain management helps in improving supplier delivery performance, reducing freight costs, and minimizing supplier risks. These are some of the significant benefits artificial intelligence is providing in collaborative networks of the supply chain. Today, AI in supply chain management can be used to identify horizontal collaboration synergies between multiple networks of shippers.
#3. Provide better insights into improving supply chain management
Artificial intelligence helps uncover new information to improve supply chain performance. By combining the strengths of supervised learning, unsupervised learning, and reinforcement learning, artificial intelligence is rapidly becoming an effective technology that continually seeks to find important factors affecting the performance of the supply chain.
#4. Helps in maintaining physical assets across the entire network of supply chain
AI in supply chain helps at visual pattern recognition, opening up several potential applications in the maintenance of physical assets and physical inspection across the entire network of the supply chain. The use of AI in supply chain is also proving to be very effective at automating inbound quality inspection throughout logistics hubs, isolating product shipments with wear and damage.
Want to know how you can implement AI in supply chain and yield massive, quantifiable results?
The supply chain in modern companies is increasingly complex and dynamic in nature. From suppliers and industries to raw materials and commodities, there have been steady changes taking place across the supply chain of new age companies. Furthermore, the increasing uncertainty in the economic markets are forcing organizations to closely monitor market conditions and respond appropriately through improved supply chain strategies.
Traditional ERP systems are undoubtedly highly useful management tools, but they are mostly blind to external data. Their “inside-out” approach can leave companies inadequately equipped when planning and executing competitive supply chain strategies. However, with the advent of new market intelligence tools can resolve this problem. With the help of supply market intelligence, ERP systems can now incorporate real-time insights on suppliers, customers, and competitors, thus creating a perspective to reduce risk and create a competitive advantage. Here are just five benefits companies can realize with a market intelligence intelligence-driven supply chain.
Improved supply chain strategies
It is vital to take into consideration the impact of potential events before undertaking supply chain planning. For instance, factors such as a sudden increase in demand, or in the event of any supplier undergoing a catastrophic event, companies must be able to be prepared to handle such situations. Market intelligence provides early warning signals and unique insights into events that are likely to occur. Furthermore, it can also help in assessing alternative suppliers and approaches. This prepares companies to handle unforeseen contingencies better.
Competitive advantage often comes to companies who are more agile, nimbler, and react faster when compared to their peers in the market. In fact, a quick reaction to unforeseen disruptions is the route for modern companies to gain a competitive advantage. For instance, if a particular supplier is struggling to meet the company’s demand, they can quickly move to an alternative. Or, if a key component may be difficult to procure, companies can lock up the supply before the competitor does. Market intelligence via real-time alerts is key to achieve this as it gives faster insights for companies to be prepared for contingencies in the future.
Long before the era of digitization that we commonly associate with Industry 4.0, supply chains have served as the lifeblood of industrial organizations. However, in recent decades, supply chains have grown increasingly complex due to the advent of advanced digital technologies. These technologies have helped the supply chain to evolve into something more interconnected, less linear, and more responsive to change. This new networked chain of supply is known as a digital supply chain. It has reshaped the way stakeholders transact and communicate with each other. The emergence of the digital supply chain has made the supply network a strategically critical component of the organization and has helped in making it more flexible and responsive. However, there are several challenges in the area of digital supply chain analytics, visibility, and planning that are essential to realize its true potential when it comes to driving innovation.
Digital Supply Chain Challenges
Challenge #1: Managing the digital supply chain
A digital supply chain includes applications, network, and data connections. It connects customers to the tech solutions that underpin e-commerce, unlike production supply chain that moves physical resources and raw materials among manufacturers, suppliers, and retailers. Therefore, with business transactions moving to the cloud, managing the digital supply chain becomes crucial for increasing revenues, control costs, and protect the brand.
Challenge #2: Optimizing the integrated planning process
For any digital supply chain network, optimizing the integrated planning process is very challenging as most companies don’t leverage all the information to achieve the best planning result possible. Additionally, it has been observed that statistical forecast data or determined planning is manually overwritten by planners. So, for a digital supply chain to derive the best outcome, the organizational setup, advanced level of integrated process optimization, processes, governance, and incentives need to be aligned between and within partners in the supply chain.
Challenge #3: Building a balanced roadmap
Shifting to a new market strategy with a digital supply chain network to accelerate growth can wreak havoc on the company’s highly customized supply chain. Therefore, it becomes crucial for the management to make sure that the new supply chain balances their competing demands and allows easy integration of new business models. A balanced roadmap can help in generating quick wins and provide flexibility to accommodate evolving technologies and future capabilities.
Is your organization’s supply chain ready to go digital or are you facing any of these digital supply chain challenges? Contact us now!
What is Catalog Management?
Catalog management is a dynamic process where products are structured in a specific manner to ensure the availability of high-quality and consistent data across all channels of sales. An online catalog offers names of product, hierarchy, descriptions, supplier, price, and other necessary details. Proper catalog management provides granular details like style, color, pattern, sleeve, neckline, length, and fit, which help drive the customers to the right product. Catalogs are generated by tagging products based on different attributes that are used to classify and segregate products. These tags need to be SEO ready, consistent, and descriptive.
The procurement process forms an integral part of any organization’s process-driven and innovation strategies to improve efficiency, reduce costs, and make advancements. When it comes to the public procurement process, there are several unique roadblocks to implementing these strategies processes, and systems successfully into existing operations. This makes the public procurement process more time-consuming, inefficient and costly. Consequently, the communication channel is not solid, supply becomes unstable, and quality deteriorates. In this article, we have discussed in detail some of the biggest challenges in the public procurement process and the ways to mitigate them. Also, we have suggested a few measures to tackle those challenges efficiently.
The continuous influx of innovation in the field of procurement and sourcing has made supply chain functions simpler by eliminating tiring paperwork and automating complex as well as simple tasks. Procurement technology solutions like e-procurement tools and many others significantly benefit businesses by allowing better visibility, greater productivity, and cost efficiency. Traditional techniques such as category expertise and supplier relationship management are still relevant but the new procurement technology solutions are transforming the way businesses approach supplier negotiation, contract management, category management, and reverse auction. The high degree of granularity achieved through the use of procurement technology enhances business agility, drives continuous process improvement, and supports an operating model that boosts business excellence within procurement and supply chain functions. In this article, we have talked about a few interesting ways in which procurement technology is impacting supply chain functions.
Procurement Technology in Supply Chain Functions
Mobile procurement has made supply chain efficient
We cannot deny the fact that procurement professionals are on the move and demand instant information. This is where procurement technology plays an important role. It empowers them to drive better value and results. With such technology, organizations can streamline their procurement processes and supply chain functions with features like purchase order creation, demand notifications and real-time analytics from a mobile device. Procurement professionals can also request and compare items conveniently, providing them complete visibility on suppliers.
Digital signatures have secured supply chain functions
Digital signature and certificates make the e-tendering process possible through its capacity to access information of buyers or services online and ensuring security. Digital signatures drive away the lengthy paperwork and allow for contracts to be carried out in lesser time. Additionally, this procurement technology also encourages automatic contracts and eases the request for proposal processes apart from simplifying the order of purchase.
E-catalogs have improved reliability
Unlike services catalog or traditional product, e-catalogs are interactive and can store huge quantities of items that can be classified and organized into different categories as per requirement. Such a procurement technology can be easily modified and edited on a recurrent basis and help in converting inquiries resulting in significant cost savings.
Reduced operational costs in supply chain functions
Today, both small and medium business enterprises are migrating to cloud technology to enjoy the benefits of procurement technology solutions without investing much on IT infrastructures. Also, businesses are opting for a Software-as-a-Service (SaaS) model to meet their procurement needs. Such digital procurement platforms provide great value that in-house solutions can never match. Additionally, cloud migration can reduce the overall costs and provide scalability and flexibility to the organization.
SpendEdge offers customized procurement market intelligence solutions to help procurement and sourcing stakeholders make better business decisions. Are you looking for any solution? Request a proposal now!