Technology a differentiator in supply chain deals

By Gwen Ridler contact

- Last updated on GMT

Technological innovation will be key to the future of the food and drink supply chain, says Howorth
Technological innovation will be key to the future of the food and drink supply chain, says Howorth
Dave Howorth, executive director at SCALA Consulting, relishes the challenges presented by the food and drink supply chain and its importance to business success

Data is as valuable as the products transported within the food and drink supply chain, according to Dave Howorth, executive director responsible for grocery at supply chain consultancy SCALA. 

An industry veteran, who has spent more than 30 years working with supply chain operations, Howorth joined the consultancy early last year after serving as supply chain director at international food manufacturing giant General Mills. He has seen first-hand the difference that the shift towards digitalisation in the industry has made.

“Technology has become a differentiator,”​ says Howorth. “I’ve always said it sometimes feels easier to move boxes than it does to move information and the exchange of information in the supply chain has become increasingly important. Fifteen to 20 years ago, it used to be about physical assets and infrastructure. Today it’s more around technology, information flow, data and insights.

“Digitalisation, the availability of data and the ability to pull insights out of data rather than just having huge amounts of data is – and will continue to be – important.”

The greater use of technology by the logistics industry and food firms’ supply chain operations all stems from a shift in perception of what role it plays in the business, says Howorth. He believes this, in turn, has been fuelled by growing consumer demand for products to be delivered almost as soon as they have been ordered.

“In an age where the consumer wants it now, wants to be able to order it in a whole range of ways, an organisation’s capability to logistically service that customer is becoming increasingly important,”​ Howorth explains.

The role of technolgoy

That said, technology does not solve every problem and needs to be carefully considered, he says. A classic example is blockchain, the general name for the suite of IT systems touted as the solution to issues surrounding traceability and authenticity of food.

The concept allows every party in a particular supply chain to have almost immediate access to all product information in that chain as soon as it has been entered, in a form that is billed as tamper-proof.

While the technology could prove useful for some businesses, Howorth warns against over-hyping its ability to solve all of a company’s supply chain problems.

History shows us that sometimes things can get over-hyped​,” Howorth adds. “It’s trying to get the balance between getting too carried away with something and really understanding what the tangible business benefits are going to be.”

Much of the work conducted by SCALA surrounds companies wishing to make their supply chains more efficient and working with firms to help them meet margins. Increasingly, a lot of activity has been related to acquisitions and building a unified logistics network.

“Where companies are acquiring, they’re looking at what the optimal logistics network coming out of that acquisition is,”​ says Howorth. “We’re seeing companies investing in new warehouses and automation to stay competitive going forward.”

Threat of Brexit

There are many challenges that the supply chain has faced this year and will continue to for the near future – the obvious two being the looming threat of Brexit and the uncertainty it has brought to UK businesses, and a shortage of labour.

“The huge uncertainty surrounding Brexit and labour challenges has the potential to disrupt flow.​ [Northern Ireland’s border with] Ireland is a very interesting one. Then there’s the question around sourcing and where to convert because of potential tariffs,”​ he says.  

“Another challenge, which isn’t particularly new, is around the talent for food and drink and the supply chain. How do we attract talent to the sector? How do we explain supply chains to young people? How do we give them a real feel for what a supply chain actually means? Sounds easy, but it’s quite difficult.”

Sourcing skilled staff isn’t the only thing the industry needs, he claims. Howorth believes shoppers have developed a very “arm’s-length”​ understanding of the food chain, with their major consideration being how much a product costs.

“We need to educate consumers on what the food chain looks like and the value in it, otherwise we’re in danger of becoming commoditised and totally focused on the cost of food, as opposed to the value of food.”

Supply chain deals

Howorth’s focus on the big issues within the food and drink supply chain extends to the way deals are done now, compared with when he first started in the industry. Here, he believes things have moved in a positive direction.

From his point of view, companies are less likely to try to seek contracts that might be detrimental to their competitors, instead looking for “win-win​” agreements. In turn, a greater degree of collaboration has started to emerge within the industry.

Reflecting on his career to date, Howorth admits he initially had no strong desire to work within the food and drink sector. “It was a desire to work in operations management, really, and that could have been manufacturing or engineering, but operations management was what I identified,”​ he explains. “It was a draw towards distribution and logistics, where you could make a tangible difference.

“I wouldn’t change it. A number of things have kept me within supply chain roles. One of them is you feel that every function is critical to business success. You feel you’re touching every part of the business.”

It’s this desire to make a tangible difference within companies that leads him to embrace every challenge that comes his way. Where one person might see defeat, Howorth sees opportunity.

“While there are challenges, logistics and supply chain​ [disciplines] have such a strong role to play in the future success of companies,” ​he says.

Dave Howorth

Job title:​ Executive director, SCALA
Age:​ 57
Domestics:​ Married with two grown-up boys, 20 and 24 years old
Away from work:“I’m a sports nut. Still playing a little bit of cricket, but more importantly I coach under-15s. It’s quite rewarding and giving something back as I see them develop, as well as getting them outside in the sun, away from a screen. I’m also a pretty passionate Sheffield Wednesday fan.”
Howorth has completed the last three Trans Aid charity bike rides – a five-day cycle across regions in Africa, with Zambia this year’s destination.
Favourite foods:“Ethnic foods: Indian, Chinese, Mexican, Korean – the list goes on.”

Related topics: Supply Chain, IT

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