Developing a deeper understanding of the Grocery supply chain, its complexities and best practice for Food & Drink businesses

Introduction

Winning a retailer listing is the start of the journey for many businesses, ensuring you have your product on shelf, in the right condition, meeting the desired volumes and world class avaiablity are the fundamental pillars of success when supplying grocery retail. As soon as your product reaches the supermarket shelves, your competition are aware of your success and their focus pivots to replacing your product with theirs. Any weakness in the supply chain capability exposes your business and puts that valuable listing at risk. In this latest blog we look the complexities of the supply chain and share some insights on best practice built on our international experience sourcing, manufacturing and supplying food and drink products into grocery retail.

What is the Supply Chain?

Whilst the starting points may vary by product ultimately it’s the process of bring together all the ingredients, manufacturing and packaging the product and ensuring the finished goods reach your clients shelves on time where and when customers expect it.

To achieve what in principle seems a simple task and in many caszes working on the Just In Time principles, its essential that each party understands their roles, has the opportunity to deliver through their expertise and overall it all works cohesively.  Here are some of the key roles whether managed in house or outsourced:-

• Planning – controlling the production program and creating the timeline
• Procurement – working with suppliers for food and non food inputs to ensure all are available for the Production window
• Technical – Defining and monitoring quality standards and safety from raw material through to finished goods
• Operations – Delivering the finished product at the desired volume, agreed quality and on time
• Distribution and storage – managing the movement and storage of goods from raw materials in to finished product into the customers Distribution Centre
• Sales- manageing tge customer relationship, in this case the retailer ensuring orders received, product supplied and commercial agreements in place
• Finance-managing financial reporting on input costs, conversion costs and finished product financials delivering profitably outcomes

The Food Supply chain generally whilst incredibly resourceful, responsive and highly skilled operates in a time sensitive market. Its need to be customer facing first can at times prove challenging, responding to a promotion that has exceeded expectations, poor quality raw material, major breakdown or late packaging can quickly result in low or out of stocks, exposing the business, creating a loss sales opportunity and disappointing consumers.

Although the principles of the supply chain remain constant, it’s a clear example of where one size wont fit all. Some brands outsource all their manufacturing and themselves take the role of a sales and marketing agency, others use contract manufacturing to produce those products that are outside of their own operational capabilities or can be produced closer to the market. Some businesses prefer to drive volume through their facilities and trade the finished goods into a network of experienced distributors expanding the product reach but losing that direct access to the end retailer, each of these strategies have at least one critical element in common, the need to fulfill orders, deliver on time and have the product where consumers expect it, when they demand it.

Some of best practice in managing the supply chain

• Planning for the unexpected or contingency planning. Whilst each situation can’t be covered, what defines business as normal challenges from continunity or crisis management, the signs, the team, resources and training
• Sourcing strategy, the ability to ramp up volumes quickly through primary or secondary suppliers whilst maintaining standards and accreditations
• Operational agility and ability to deliver increased demand or outsourceproduction in te event of a critical breakdown
• Sales strategy developing trust with your retail partner for support when needed and times are challenging, the ability to have transpratent conversations and work through supply scenarios together
• Access to 3^rd parties for storage, distribution or manufacturing capabity supporting product volume uplift
• Technical challenge testing programs and finished product monitoring to reduce risk of failing stock, processes such as Statistaical Product Analysis provide real time access to quality data and enable changes or alterations during production to maximise quality outputs
• Maintenance and hygiene both are essential areas that can quickly be compromised resulting in equipment breakdown or product safety issues ensuring both are given the time to deliver their functions are often rewarded in end performance

Recognising this is a lot of specialist knowledge to understand , to build or design the optimum supply chain for your business, a proven specialist food consultant can add significant value here through their experience, knowledge, strengtg of networks and ability to lead decision making when limited data is available. Having normally worked across multiple product groups, a wide range of equipment and often internationally this exposure give practical insights into best practice, earnings from alternative industries and bring increased capability to your business.

Underpin each area with ckearly defined KPIs, Key Performance Indicators that are reported to maintain focus, discipline and operating rythmn maximizing the success of your business

Prof. Consulting Group.

Are you looking to accelerate the growth of your business? Look no further than Prof. Consulting Group! With our team of industry-leading experts and extensive range of services, we’ll help you take your business to the next level.