In an increasingly digital world, today’s global supply chain operates on the foundation of outdated systems that prevent stakeholders from responding quickly to opportunities and threats – whatever shape they take.
The fragility of the supply chain became apparent in February 2021, when Texas suffered an unprecedented freeze that virtually shut down the state in more ways than one. Texas endured multiple blackouts that threatened its residents and crippled “the world’s largest petrochemical complex, which turns oil and gas and its byproducts into plastics,” according to the Wall Street Journal.
“What we saw with the freeze is we’re one issue, one weather event away, from supply-demand tightening operating rates, and so it doesn’t take much to tilt the market,” Howard Ungerleider, the Chief Financial Officer of Dow Inc., explained at a conference in March.
Ungerleider added that he thought it would take more than six months to correct the supply-and-demand imbalances caused by the storm.
The supply chain was initially built for scale, but a shifting landscape requires companies to embrace a new way of doing business. Although changing consumer sentiment and global dynamics come with challenges, they also offer a unique opportunity for agile companies to upgrade their supply chain. But a few significant obstacles still stand in the way of better supply chain transparency:
Disjointed Systems: Whether out of preference or necessity, companies often rely on multiple technology solutions that don’t work well together. The problem gets worse when suppliers operate on different systems than the manufacturers they work with. And the data that accompanies the goods that move between stakeholders must travel through these incompatible systems, making communication difficult, driving up costs, and increasing the odds of mistakes.
Not Enough Transparency: Without integrated systems, companies lack transparency into the entire supply chain, making it more challenging to obtain reliable information about ingredients, supplier status, or even inventory, especially during a crisis. In the early days of the pandemic, government mandates forced suppliers to shut down operations, but customer orders kept rolling in. These shutdowns created a logjam that wreaked havoc, leaving suppliers with orders they couldn’t fill, manufacturers with stalled production lines, and retailers with empty shelves.
Too Many Data Sources: Companies today must juggle a never-ending stream of data from various sources. Teams constantly upgrade internal systems to get them synchronized, but this process can break down when it’s stretched across a supply chain where multiple players operate different systems. Last year, “food-service suppliers, for example, faced abrupt order cancellations across their entire customer bases. That left many of them with excess stock they couldn’t easily redirect to consumers because of packaging-size mismatches. Few home chefs have the cupboard space to accommodate restaurant-size cans of fruit and vegetables but creating consumer-friendly formats would require an additional investment of capital and time. And that would put perishable materials at risk, threatening narrow margins among prices, logistics, and transaction costs,” according to McKinsey & Co.
Technology Offers a Better Way
There’s no shortage of data in the CPG business. But all that data is worthless unless companies can analyze and act on it. And these challenges predate the pandemic – they simply highlighted the existing inefficiencies.
Organized Data: Stakeholders lose millions of dollars annually with the digital silos that plague today’s supply chain. Companies need to consolidate the data they receive into a single, shared system, making it easier to share that data—and the insight it offers—with their supply chain partners. With accurate, real-time information that a coordinated supply chain provides, companies can make better decisions—and act on them quickly.
Automation: The speed of the market, advances in technology, and shifting consumer sentiment means companies must upgrade quickly. But simply upgrading legacy systems incrementally can be slow, expensive, and ultimately offers a short-term fix. Companies must embrace next-generation platforms to help them move faster by automating their data flow – internally and externally – and converting that data into digital records. “Moving forward, food and beverage warehouses need to realize that automation solutions are not only impervious to diseases and disruption, but they can also help keep workers safe, improve job satisfaction and enable humans to focus on higher-level initiatives, all while improving productivity and efficiency,” Vecna Robotics VP of sales John Hayes wrote for Food Logistics. “This is crucial to remain competitive, especially in today’s unprecedented times.”
Moving on from a disjointed manual document management system to a digital-first approach isn’t as daunting as it sounds. TraceGains helps companies automate and streamline document management and achieve supply chain transparency every day. On average, companies find that 80% of their suppliers are already on TraceGains Network, allowing them to connect and gain instant access to required documentation.
The data stored in your document management systems contain intellectual property and an untapped gold mine of insight. Why not use it to power dashboards and reports to proactively identify potential issues and recognize emerging trends? With TraceGains, companies can integrate the data in their legacy ERP solution and other systems of record and achieve supply chain transparency.
Data is the foundation of everything we do at TraceGains, so we never permit any unauthorized use of your private information, and we take customer data security seriously. It’s why we recently earned our SOC 2, Phase 1 certification. Find out more about it here.