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Real Stories of Supply Chain Agility - Part Four

Mahesh Rajasekharan
Food Manufacturer Manages Demand Shock

Every day, on calls with Cleo customers, I am learning first-hand how leading supply chain-driven businesses are adjusting to the COVID-19 pandemic. In this blog series I share insights about how companies in various industries are responding. Their agility is remarkable, and something we can all learn from. Hope this helps everyone think differently.

Blog #4 – Food Manufacturer

As many industries struggle to manage the ongoing supply chain disruptions created by COVID-19, companies within the food manufacturing industry find themselves in an interesting position.

In fact, one of our customers, a multi-billion-dollar food manufacturer, has been doing exceptionally well. The company has experienced 4X growth in demand fueled by the COVID-19 pandemic. As a large scale manufacturer with multiple plants, warehouses, and numerous suppliers in the U.S. and throughout Latin America, this company has dynamically managed supply, demand, and logistics shocks to effectively fulfill demand (which has gone through the roof).

The company expects the increased demand – much of it from panic buying, as well as shifting consumer behavior -- to last for at least six months, if not longer. Additionally, its massive shift to make e-commerce platforms such as Amazon, Walmart, and Target a part of its ecosystem, has contributed to the increase in demand.

How to Keep Up with Increased Demand?

Now, you have to ask … with so much uncertainly in the world today, how on earth has this food manufacturer been able to not only keep up with, but successfully manage the demand shock? There are myriad reasons.

For starters, the importance of maintaining healthy and beneficial relationships with all its suppliers and partners has never been more evident. The company has made strategic investments that nurture deep supplier relationships without squeezing them for incremental margins. This has allowed it to build its foundation on long-term supplier relationships, which helps to secure continuous supply, even in difficult times.

Additionally, having flexible, quality controlled manufacturing practices in all of their plants enables the company to run multiple shifts, which drives non-stop production 24/7 across all of its manufacturing facilities. This in essence optimizes its supply chain to handle unlimited demand (in a figurative sense).

The company also has found the optimal balance between control and cost within its logistics chain. Regarding inbound logistics, for example, its processes embrace everything from suppliers to manufacturing sites; internally they stretch to warehouses managed by a collection of 3PL providers. On the outbound side, activity ranges from logistics to stores it controls with direct store delivery (DSD) every single day.

Perhaps most important, however, is the trust it has built with its employees. The culture of building and sustaining a trusting relationship with employees at every level has allowed the company to run its manufacturing, warehousing, and outbound logistics extremely efficiently so as a team the company can meet the staggering demand growth of the last couple of months.

What’s the Differentiator? Modern Integration Technology

Because this food distributor made a decision to modernize its business processes and make significant investments in supply chain management, it has been able to thrive throughout these unforeseen and unpredictable times. By investing in transportation management and ecosystem integration through B2B/EDI technologies, the company can manage its order-to-cash and procure-to-pay processes very well across strategy, planning, and execution.

Integration technology is not only mission-critical at this point, it’s also a value driver. Why? Because given the vast network of geo-distributed ecosystem partners (whether customers or suppliers) and the intensity of the business flows across them, supply chain continuity is mandatory. Our customer’s success requires 24/7 manufacturing and everyday direct store delivery to each and every retail store it serves. This food manufacturer has done all of the above, and more.

Because it has the proper technology in place, it is enjoying a truly agile supply chain, which is what enables its business to continue to thrive, even in the face of adversity.

As always, please reach out to me here on LinkedIn with any questions or comments that you might have. And refer to Cleo’s COVID-19 FAQ guide for more suggestions to help you navigate these difficult times.

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