We hear a great deal about how businesses today must ride the wave of digital transformation to compete, to grow, and in the direst terms, to survive. Thinking about that reality led me to consider how digital transformation can actually help us all to survive – and specifically, how transforming business processes in the food supply chain may well become essential to sustaining the human race.
It’s a paradox: I can walk down to my local supermarket at any time of day and buy a roast beef sandwich, thinking nothing of how it got there. On the flip side, I realize that I should not take that food availability for granted. The world population is growing fast, and so is the need to feed all these mouths. Supply chain efficiency is the key not only to the easy availability of my sandwich, but to the sustainability of the food supply itself.
Let me set the table with some fascinating statistics in this regard. Studies have shown that due to limitations in agriculture-fit land, 70% of the demand increase for food will have to come from efficiency gains in food production and logistics. New technology and machine-to-machine communication are generating huge gains in crop growth and raw food material production.
The same positive change is now needed in the food processing industry, from the agricultural source to the end point of sale. The resulting transformation of business processes will lead not only to supply chain efficiency, but to higher efficiency and competitiveness of every business link in that chain.
Transforming business processes with a real-time platform
Let me give you a few simple examples of what this might look like – instances that I think are relevant not only for small and midsize firms, but for any company that’s an integral part of a complex supply chain.
- We can begin back on the farm where the wheat for the bread is grown. How on earth can digital technologies optimize crop growth? With a real-time data platform, that’s how. For instance, to analyze meteorological and soil data to show when and how much to fertilize – and incorporate workforce scheduling to get the work done efficiently.
- Next, we’ll visit the ranch raising the beef cattle. Surely there’s no way to utilize technology here? Au contraire: The health of the herd can be optimized with sensors that read temperature, breathing, and heart rate, and in that way, signal that an ill cow needs treatment before serious disease sets in. Automatic feeding can help ensure that each animal is getting proper nutrition. And instead of using pen and paper or a spreadsheet to calculate the best time to sell the cattle, analytics tools can help evaluate market conditions.
- On to the trucking company that transports supplies to the sandwich makers. Here, instead of using a standalone software application, the logistics planner can import customer data, weather conditions, even real-time traffic reports to plan the best route. Instead of using a spreadsheet to calculate truckload capacity, an integrated data platform incorporates, for instance:
- Inventory and spoilage dates (of the sandwich supplies)
- Customer data (for individual purchase patterns, upcoming local events and holidays that might help predict demand)
- Workforce scheduling (for loading, transport, and so on)
- Travel distances and number of stops (for fuel efficiency and resource efficiency
- Now the planner can maximize truckloads, resource and fuel utilization, and more. Back in the office, the salesperson can make more effective calls by better understanding how to negotiate with the customer and whether and how to discount.
- Finally, we reach the point of sale. With a real-time data platform, the retailer can use sensors to detect inventory, spoilage, and automate replenishment orders – and decrease or even completely eliminate safety stock of product with limited shelf life. What-if scenario modeling enables the retailer to analyze what happens if 10% more sandwiches are sold, or 50% less. Social media input can show what customers are talking about relative to their plans for the weekend, when beach weather is predicted, or for upcoming football parties – since the local team just made the playoffs.
Boosting efficiency and competitiveness – regardless of your industry
And all of this data and analysis can be available anytime, anywhere, on any device, for fast, effective decision-making on the fly.
If you think these real-world examples are only for large corporations and conglomerates, think again. In fact, small and midsize companies have the huge advantage in that they usually run less complex system landscapes. This agility allows them to consume technology much faster than anyone else, and by consequence, have much shorter time-to-value cycles.
Nor are these examples relevant only to the food supply chain. The idea is that you can transform business processes that needlessly eat up resources with a real-time data platform that integrates data in one environment, and applies sophisticated analytics for instant insights, fast response, and higher efficiency. And no matter what field you’re in, higher efficiency leads to less waste and a more sustainable environment.
There are accessible, affordable, solutions designed specifically to meet the needs of SMBs, along with advisors to support you with evaluation, implementation, industry-specific functionality, and ongoing services.
For more information, please visit the SAP S/4HANA Partner Packages site here.