In the food and beverage (F&B) industry, much of the recent focus has been on the way organisations handle the last mile – the final stage of delivering products to consumers. This makes sense, given the rise of quick commerce and home delivery services like JustEat, Deliveroo, and Tesco Whoosh, which have extended their reach to include groceries alongside traditional take away food.
Even major brands such as Heinz, Unilever, and PepsiCo have set up direct-to-consumer delivery options. However, this focus on the last mile risks overlooking an equally crucial phase of the supply chain: the first mile, where raw materials are sourced, and the journey of the product begins.
The hidden costs of neglecting the first mile
The first mile forms the bedrock of a successful supply chain. Poor management in the initial phase can lead to issues like excess inventory, difficulties in supplier coordination, and overall inefficiencies that ripple throughout the supply chain. These problems can result in higher operational costs and missed opportunities for reinvestment in areas that directly benefit the customer, such as product quality and pricing.
For F&B supply chain organisations aiming to boost efficiency, the first mile is a logical starting point. By harnessing the power of data, companies can identify and address inefficiencies early in the supply chain process.
However, currently, many companies still grapple with challenges like a lack of real time data visibility and reliance on outdated manual processes. According to an InterSystems survey of supply chain leaders, 41% cite the absence of real time data as a major barrier to progress, while 39% struggle with manual processes.
The ability to quickly ingest, analyse, and subsequently make strong business decisions is critical in demand sensing and forecasting. Yet, antiquated data management processes and inaccurate data (37%) impede progress. Nearly a third (30%) of supply chain leaders said processes built on outdated algorithms without agility to adapt present a key challenge in this space.
InterSystems research reveals that the biggest barrier to achieving full supply chain optimisation is the lack of integration between disparate data sources, including systems and applications, cited by 46% of respondents, rising to 56% in the fast-moving consumer goods (FMCG) space.
Overcoming the hurdles
To overcome these obstacles and optimise the first mile, F&B supply chain organisations must look to better integrate and use trusted and clean data.
A smart data fabric architecture, underpinned by advanced analytics and decision intelligence (A&DI) platforms, is instrumental in providing supply chain organisations with this clean, reliable data needed to optimise the first mile. The smart data fabric accesses, transforms, and harmonises data from multiple sources, on demand. This seamless integration of the various data sources involved, both within and outside of the organisation, gives F&B supply chain businesses a comprehensive view of the whole supply chain. This approach allows supply chain firms to leverage usable, trustworthy data to make faster, more accurate decisions in the first mile and beyond.
The smart data fabric also integrates a broad range of embedded analytics capabilities, such as data exploration, business intelligence, and machine learning. These tools empower F&B supply chain companies to gain new insights and fuel intelligent predictive and prescriptive services, and applications.
This real time access to trusted, unified data and intelligent insights delivers significant opportunities for F&B businesses across the supply chain, enabling them to improve demand forecasting, optimise inventory levels, and improve overall supply chain performance.
Data-Driven optimisation in the first mile
Continuous data flow and the use of advanced analytics facilitate ongoing analysis and optimisation of first-mile processes, leading to greater efficiency and productivity.
Key areas for improvement include demand forecasting and planning, where bringing together real time sales and consumption data improves demand forecasting. This also allows for more precise production scheduling, reducing lead times and enhancing manufacturing efficiency.
Automated workflows are another area where real time data can make a significant impact, reducing the need for manual intervention and boosting operational efficiency.
Enhanced communication is another benefit of real time data, supporting instant engagement between suppliers and manufacturers and allowing for quick order adjustments based on current demand and supply conditions. Similarly, real time tracking of orders ensures that suppliers are meeting delivery schedules, reducing the risk of delays and helping ensure timely production.
Dynamic inventory management becomes possible with real time data, allowing inventory levels to be adjusted dynamically in response to demand signals, minimizing excess stock and reducing storage costs. At the same time, stock replenishment benefits from automated triggers based on real time inventory data, ensuring raw materials are available when needed, avoiding overstocking.
Quality control also sees improvements with real time monitoring of temperature, humidity, and other conditions during the transport of raw materials helping to ensure quality and compliance with safety standards.
Traceability and compliance are enhanced through real time data, enabling full traceability of raw materials from source to production, aiding regulatory compliance, and allowing for swift responses to quality issues or recalls. Additionally, sustainability and waste reduction efforts benefit from real time data, which helps identify resource inefficiencies, supporting waste reduction and improved sustainability practices. Companies can also track the environmental impact of sourcing and transportation activities, helping to meet sustainability goals and reduce their carbon footprint.
Delivering better value to customers from first mile to last
While the last mile of the F&B supply chain has received considerable attention, neglecting the first mile could be costly. By investing in first-mile logistics and operations, and supporting them with robust data and advanced technologies, companies can achieve efficiencies that benefit the entire end-to-end supply chain – from first mile to last.
Optimising the first mile, not only reduces excess inventory, and improves supplier coordination, but also enhances sustainability efforts, ultimately leading to greater value for customers. The integration of smart data fabrics is vital in this process, enabling businesses to maintain a competitive edge in a rapidly changing market.
- Collaboration & Optimization
- Sourcing & Procurement
