Effective Execution in a Demand-Driven World

Just as critical as managing new product introductions and end of life retirement of product offerings, is managing the creation, introduction, adoption and expiration of value-add services offerings around these products. Services may include a manufacturer’s rebate offer to end consumers, special handling during warehousing and transport of products, even the timing and offer of providing consolidated invoicing and/or special payment terms for early payment. Excellence in all of these areas can help food and beverage manufacturers manage, influence and shape customer demand.

Insuring Product Quality

During the actual manufacturing of products, the quality-related properties of individual inventory lots used during production become part of every resulting lot produced, from ingredients, through intermediates, to finished product lots. The quality properties of ingredients often introduce lot-by-lot variability, which impacts both product formulation, and the actual manufacturing operational processing steps necessary to deliver standard products every time a product is made.

For example, manufacturers of meat and dairy products often achieve consistent quality products by uniquely blending and processing differently for each production lot – being forced to use a variety of ingredients across multiple production lines, each with unique processing steps. While they would certainly prefer to use standardized ingredients that always match their target quality specifications, nature inherently delivers a daily variety of bounty with unique quality traits, from various harvest sources. Cows can’t be programmed to provide fat-free, 1 percent, 2 percent, and 4 percent milk – either to drink, or use when making cheese or other dairy products. And for meat processors, poultry, pork, lamb, and beef don’t follow a “one size fits all” target quality specification. Still, these manufacturers must deliver consistent products to customers, internally managing product and process formulation, based on the varying properties of key ingredient found in each inventory lot, every day. For these manufacturers, it is both a key requirement and business strategy to deliver consistently high quality products within their demand-driven supply chain, while also maintaining the lowest material cost possible.

Private label manufacturers are also constantly searching for ways to offer customers value-added services, such as tailoring products based on a customer’s unique specifications and target markets, and even offering graded quality and quality-sensitive pricing for some products, based on the properties of each lot (i.e. PH, brix, protein and/or fat percentage moisture content, etc.). It’s easy to see how quality introduces another level of complexity in a demand-driven supply chain, sometimes requiring manufacturers to manage each inventory lot of product uniquely, when graded levels of superior quality are desirable, and can influence both customer interest and market price. Food and beverage manufacturers are often constrained when considering ingredient suppliers, as well, based on the customer quality mandates placed on them – they may simply not have the luxury of a large list of alternate suppliers that meet the demand-driven quality requirements of their customers.

Both governing regulatory agencies and customer compliance mandates mean food and beverage manufacturers, and their entire supply chain, must be able to track and trace all consumed ingredients, intermediates, and produced finished goods by inventory lot – from field, through manufacturing, distribution, and out to the end consumer. This includes food products that begin with the “disassembly” of key ingredients (i.e. meat, grain, fruit, milk, etc.) into literally hundreds of co-product and by-product intermediates – which in turn can go into hundreds of finished products. Add to this the requirement to provide forward and backward inventory lot history, from primary material sources to end consumers – and it’s easy to see why providing safe and secure products is a critical value add service of food and beverage manufacturers in a demand-driven world, all while keeping inventory fresh and in constant motion.