Future-Proofing The Food Supply Industry to Optimize CPG Operations


The past few years have been a time unlike any other for suppliers in the CPG manufacturing world. From a global pandemic to labor and raw material shortages, the food industry faced many challenges that linger today. 

In this article, let’s look at a few challenges that CPGs need to look out for and how leveraging the right tools and technologies can keep operations efficient, regardless of geopolitical conditions. 

Challenges CPGs need to look out for 

Rising costs

Food retailers are seeing rising operation costs in all areas of production including labor, energy, raw materials, fuel, transportation contracts, and MRO spare parts. 

Furthermore, inflation is also having a major impact on sales and profitability as more and more consumers are seeing price increases in their final bill. 

Constant disruption and shortages created by the pandemic’s surge in demand has created long-term consequences that food and beverage manufacturers are still working to overcome.  With high prices continuing to drive up the cost of business, many are looking to squeeze in the most value for every dollar spent through numerous cost saving initiatives. MRO materials and spare part optimization is an area many organizations are looking at to cut out additional waste.

Poor traceability

Visibility and traceability in the CPG supply chain are vital. Without it, it can be extremely difficult to meet compliance standards and ensure product quality. 

Manual systems for data collection and reporting are not only outdated, but they open operations up to miscommunication and inaccuracy. With increasing regulatory practices and a growing public interest in transparent CPG practices, robust data collection systems are no longer “nice to have” solutions, they are expected.  

How smart solutions can keep operations moving

Inventory and asset management

CPG companies should embrace the potential of the Internet of Things (IoT). Smart tools can help both procurement and operations management teams track inventory and asset maintenance. This makes it possible to efficiently and accurately manage inventory while increasing the lifespan of assets. 

MRO inventory optimization technology makes it possible to strategically maintain inventory levels at the best possible cost. It allows management to avoid over spending on redundant inventory but also allows you to avoid downtime that results from maintenance failure. Best of all, these systems create and recommend network optimization models to help centralize spare parts inventory between sister plants.   These strategies ensure wasted working capital never occurs while maintaining the appropriate inventory levels at all times.

Full visibility over your MRO inventory for CPG operations makes it possible to identify inefficiencies ahead of time so that they can be avoided. This way, operations can continue and get back on track even when disruptions or an unplanned outage occurs.  

Predictive analysis and recommendations

To survive in an increasingly complicated global market, CPG businesses should ensure that their supply chains are resilient. This starts by ensuring that operations are equipped with the tools necessary to make them proactive, rather than reactive. Artificial intelligence (AI) and machine learning (ML) are quickly becoming the industry standard for developing robust MRO strategies

Built using powerful algorithms to analyze existing and future needs,, these tools can quickly process years of data to identify patterns and trends. Smart systems translate these trends into meaningful insights and actionable recommendations.  

For instance, historical analysis can be used to determine optimal safety stock levels for maintenance materials based on past data to prevent production downtime in the future. 

Eliminating manual practices and digitizing your CGP supply chain reduces the potential for human error significantly. A study by McKinsey revealed that autonomous tools for supply chain planning could cut costs by up to 10%, raise revenue by up to 4% and reduce inventory by up to 20%, while still meeting customer needs.

Build optimizations on top of themselves

To stay on top of your game, you need to build a system that allows you to build and optimize on top of itself. Instead of stagnating by just “setting and forgetting”, the system should be able to learn from past mistakes, identify new trends, and evolve with your operation.

Machine learning uses user inputs and feedback to continuously improve their performance by learning from past decisions and using them to inform new approaches. Coupled with real-time data, CGP leaders can capture long standing employee knowledge to create a system that’s robust, flexible, and responsive. 

The right MRO solution keeps operations running in times of change 

Ongoing disruptive events in recent years have exposed the fragility of modern supply chains. Forward-thinking CPGs are leveraging new tools and technologies to navigate an uncertain landscape and stay ahead of the competition.

The right materials management software provides an extra layer of security against disruptive events by increasing visibility and building resilience.

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