Tag Archives: ingredient shortages

Paul Damaren
FST Soapbox

Real-time Supply Chain Monitoring Provides Improved Visibility, Safety, Protection

By Paul Damaren
No Comments
Paul Damaren

Global fast food chain McDonald’s manages more than 38,000 locations in over 100 countries, with thousands of suppliers. The company uses real-time supply chain monitoring to help ensure the availability of ingredients, minimize supply chain disruptions and uphold its commitment to food safety and responsible sourcing.

Whether you’re a massive global brand or a much smaller company, leveraging real-time data can help your organization identify potential disruptions in the supply chain—whether that’s a weather event, transportation delay, potential food safety breach, product shortage or other incident—and take prompt, proactive measures to address and resolve them.

Food brands should implement the following supply chain management best practices:

  • Utilize advanced technologies. Tech solutions, including Radio Frequency Identification (RFID) tagging, GPS tracking, and sensor-based monitoring technologies, are effective in providing real-time visibility and data analytics. Walmart has successfully implemented RFID tagging to enhance real-time inventory tracking and optimize their supply chain. RFID helped the company improve inventory accuracy, provide better in-store shopping experiences for customers and drive more online capabilities. Additionally, RFID helps the retail giant see the real-time location and status of items in the supply chain, ensuring product availability and leading to improved order fulfillment and greater customer satisfaction.
  • Adopt an SaaS-based supply chain management solution. Software-as-a-Service (SaaS) solutions offer real-time visibility and data analytics capabilities, enabling organizations to make more informed decisions, based on data. For example, Nestlé implemented an SaaS-based supply chain management solution called SAP to manage its supply chain, gain real-time insights into its operations, and enhance efficiency. The software provides a comprehensive view of the company’s entire supply chain, from purchasing raw materials to delivering finished products. It also includes features to manage inventory, transportation and other logistics, to ensure Nestlé’s supply chain is resilient, flexible, and sustainable. Using this innovative software to streamline supply chain management can dramatically improve efficiency, effectiveness and your bottom line.
  • Proactively identify and mitigate risks. When brands continuously monitor and analyze real-time data, they can identify potential risks, such as natural disasters, labor disputes, and supplier issues. Coca-Cola’s real-time supply chain monitoring enabled it to swiftly respond to a labor strike, minimizing disruption and maintaining supply continuity. With tech tools in place to proactively identify potential risks, brands can develop strategies to mitigate and/or minimize their impact, such as diversifying suppliers and developing contingency plans. With the proper tools and strategies in place, organizations can build more resilient, sustainable supply chains and avoid potential disruptions that could be costly and damaging for their businesses.
  • Optimize operations through data analysis. Leverage real-time data to identify bottlenecks, inefficiencies and areas for improvement within the supply chain and take corrective actions. The Subway sandwich chain has faced supply chain issues in the past due to inadequate real-time monitoring, resulting in ingredient shortages and inconsistencies across different locations. Brands should regularly assess and update their supply chain monitoring systems, incorporating feedback loops and continuous improvement practices to enhance responsiveness and agility.

Real-time supply chain monitoring has significant benefits, including:

Enhanced risk management. Prompt identification of potential disruptions allows organizations to respond swiftly, minimizing the impact on the supply chain and safeguarding their reputation and finances. Unfortunately, when Chipotle faced severe food safety crises due to E. coli outbreaks in 2015, the consequences of inadequate real-time monitoring and response mechanisms resulted in extensive store closures, financial losses and damaged brand reputation. Having the proper tools and procedures in place can help organizations avoid similar crises in the future.

Operational optimization. Real-time visibility enables organizations to identify inefficiencies, streamline processes, reduce delays, and improve overall supply chain performance. For example, Conagra Brands digitized its supply chain to improve visibility and forecasting, better predict consumer demand, optimize processes, and improve efficiency and productivity. When the Covid-19 pandemic disrupted the global supply chain, Conagra wanted access to more robust data and insights, so they could better handle the supply chain and labor challenges they were facing. The organization adopted AI and machine learning tools to drive insights and optimize operations, and the results were impressive. Conagra increased operational output by 30%, and production capacity by 20% at one of its facilities, while improving productivity and order management, and reducing energy waste, manual work, costs, and out-of-stock items.

Cost savings and efficiency improvements. Real-time data analysis facilitates better decision-making, reducing costs associated with excess inventory, stockouts, and transportation inefficiencies. Procter & Gamble achieved significant cost savings by leveraging real-time supply chain monitoring, optimizing inventory levels, and improving demand forecasting accuracy.

Real-time supply chain monitoring offers organizations improved visibility, risk mitigation, operational optimization, and cost savings. By adopting best practices and leveraging advanced technologies, companies can enhance their supply chain performance, reputation, and overall successes.