Laptop screen showing various food ingredients with global map of suppliers on the left and more food items on the right

A Competitive Advantage for Food Manufacturers

Denis Storey
May 3, 2021

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Research shows – and experts agree – that implementing purchasing collaboration and accounts payable automation are big priorities for mid-market food manufacturers. 

Supplier collaboration solutions allow food manufacturers to move from manual to automated procurement, shipping/logistics, and accounts payable in just a matter of weeks. And because both internal teams and suppliers are simultaneously on board, there is a low total cost of ownership (TCO).

Luis Benavides, Verda De Eskinazis, and Daniel Swan reported in Supply Chain Quarterly that CPG players are looking at collaboration initiatives as a way out of the damaging spiral of antagonistic relationships. That's one reason why collaboration efforts between manufacturers and retail customers have become popular in recent years.

In the annual Customer and Channel Management (CCM) survey conducted by McKinsey & Co., Nielsen, and the Grocery Manufacturers Association, CPG industry CEOs identified collaboration with partners as their highest strategic priority. More than 80% of companies participated in a collaboration initiative, while some had as many as 10 such partnerships.

Supply chain collaboration has delivered real value for participants, but overall, these initiatives are more likely to fail than succeed. The CCM survey said that only two in ten of their collaboration efforts delivered significant results, and the remaining 80% represented more than just lost opportunities to add value. But the high rate of failure among today's collaborations is not inevitable. 

Wallace Center's National Good Food Network

A significant portion of the work by the Wallace Center's National Good Food Network, the Food Hub Collaboration, supports the success of existing and emerging food hubs in the United States. The collaboration builds the capacity of food hubs by creating opportunities for connection, conducting outreach and research, providing technical assistance, and initiating multi-stakeholder partnerships. By supporting food hubs — crucial players in the value chain —we're accelerating the growth of regional food systems, making healthy and affordable food available to more communities while creating viable markets of scale for regionally-focused producers.

Members of the collaboration include the Wallace Center, USDA Agricultural Marketing Service, the National Good Food Network, Farm Credit Council, School Food Focus, Wholesome Wave Foundation, Center for Regional Food Systems at Michigan State University, and the National Farm to School Network.

Sustainability Concerns Growing

Sustainability is no longer an optional add-on for the food industry. Climate change and shrinking resources mandate a responsible approach, and shareholders and customers increasingly want to know about initiatives launched to safeguard food supplies for future generations.

A collaborative approach to sustainability, just like the supply chain, is needed. The close partnership of key stakeholders is essential to increase the sustainability of the food supply chain from farm to fork.

Food manufacturers can find supplier collaborators easily with Market Hub, a complimentary add-on to Supplier Management. Market Hub is a robust sourcing directory for ingredients, packaging, service providers, and more. Manufacturers can procure new items or ingredients and automatically collect supporting quality and regulatory documentation from a growing supplier library. 

Guest Blogger

TR-Cutler,-Manufacturing-Journalist-Headshot_smallThomas R. Cutler is the president and CEO of Fort Lauderdale, Florida-based, TR Cutler Inc. Cutler is also the founder of the Manufacturing Media Consortium, including more than 5,000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler writes more than 500 feature articles annually regarding the manufacturing sector. Cutler can be contacted at trcutler@trcutlerinc.com and can be followed on Twitter @ThomasRCutler.