Food firms fail to deliver supply chain goals, says research

By Rick Pendrous contact

- Last updated on GMT

Supply Chain Initiative of the Year is one of many awards to be recognised at the 2014 Food Manufacturing Excellence Awards
Supply Chain Initiative of the Year is one of many awards to be recognised at the 2014 Food Manufacturing Excellence Awards

Related tags: Supply chain, Management

Businesses are failing to deliver their goals because they have too many supply chain priorities.

According to new research, managements are not focusing enough attention on delivering on their supply chain objectives.

The findings, from global management consulting and IT services business Hitachi Consulting, warn of a “disconnect​” between chief executives’ agenda and the day-to-day management of the supply chain.

The research was based on a survey of 100 supply chain managers and directors from firms with turnovers between 5M and 50M in September 2013 across nine European countries.

Too many priorities

Respondents were well aware of the business value their supply chains provide, but with no fewer than 14 supply chain priorities, they admitted they had too many to pursue all of them with equal vigour and deliver success.

When asked to assess the importance of a number of supply chain levers – people, processes, technologies, key performance indicators and physical footprint – on their organisation’s effectiveness in meeting market requirements, respondents declared that all had a big impact on performance.

Consequently, what was needed was a clear hierarchy of supply chain priorities, based around overarching business goals.

“Management teams must give the required amount of attention to deliver on supply chain objectives,”​ said Jesper Jelmteg, senior vice president of the industrial sector at Hitachi Consulting. “They must step back, build the picture, align and prioritise their objectives and then deploy the appropriate change resource.

Need significant resources

“Pursued diligently, activities such as supplier and customer collaboration, footprint optimisation, and the development of a more customer-centric supply chain model, all need significant resources.”

The survey also showed that when faced with a situation where a significant change in their business’s supply chain strategies, processes, and priorities would be called for, three quarters (72%) of supply chain managers and directors admitted that they were not anticipating the requisite level of change.

Supply Chain Initiative of the Year is one of the awards being recognised in the 2014 Food Manufacturing Excellence Awards​. If your company has made significant supply chain improvements over the past year, why not let prospective customers know about it? To find out more about how to enter these awards, please call Rebecca George on 01293 610422 or email rebecca.george@wrbm.com

Related topics: Supply Chain

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1 comment

On time delivery

Posted by Pol Sweeney,

Jesper Jelmteg picks up on a key point from this research. “The development of a more customer-centric supply chain model” is critical to overall supply chain success. And the way to achieve this is through focusing on the last mile in the delivery process and building transparency back through the supply chain from that point.

Current levels of performance are clearly inadequate. Companies need to aim towards 99.99% perfect delivery best practice; offer – and meet – narrow delivery slots; keep their customers informed of their delivery progress and expected time of arrival (ETA); reconcile every delivery on site; recalculate amounts due and automatically generate a clean invoice. In other words take a leaf out of the customer’s book and get the order right, first time, on time.

It might seem an implausible challenge – but in actuality it is far from that.

The deployment of cloud-based mobile solutions that enhance visibility and control throughout the mobile supply chain will enable food services organisations to improve scheduling, transform customer communications and streamline the delivery experience.

For the restaurant there is an immediate understanding of costs, no time consuming manual reconciliation and no need to spend time on the phone chasing the supplier for clarification. For the food services company, a clean invoice means fewer calls to customer service, fewer disputed invoices and no need for courtesy credits, whilst the early generation of an accurate invoice transforms the timeliness of payment, improving cash flow. Critically, by delivering a customer experience that supports the specific demands of the hospitality industry, the food services industry can begin to transform its reputation.

So isn’t it time the food services industry took a leaf out of its customers’ books and focused on getting the order right, first time, to realise the positive impact that best practice delivery can have on customer experience?

Pol Sweeney, Managing Director Europe and CTO, Airclic

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