The missing link – Delivering digitalisation for contract packing

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If the vision of Industry 4.0 is to be realised, most enterprise processes must become more digitalised – and a critical element will be the evolution of today’s supply chains towards a connected, smart, and highly efficient supply chain ecosystem.

Yet, digital transformation can sometimes seem a daunting and/or complex prospect particularly in contract packing operations. Often, dedicated co-packers or 3PLs offering contract packing as a value-added service have built up these operations over the years on an array of spreadsheets, legacy technologies, and manual processes — and moving off these systems may be perceived as more trouble than it’s worth.

But digitalisation offers significant return on investment, and for many who embrace it, the journey is not as hard as they might imagine.

What do we mean by digitalisation?

Digitalisation is an often-misunderstood word, often one that means many things to many people, so much so that many companies often think they are ‘digitalised’ when in reality they are far from it. First, it’s not a synonym for automation, although the two are often linked, for example, through data capture via machine integration. And it’s not just about computerising. Outdated, on-premises computer systems that stand in as electronic filing cabinets are frequently branded as digitalisation by in-house IT personnel, when in fact they simply house data that depends on significant manual entry and paper-based processes for their inputs. And IT groups will often jealously guard these often cumbersome on-prem creations in a desire to protect their turf and avoid the perceived threat of outsourcing. IT groups with an innovation mindset, however, recognise the value of working with best-of-breed vendors to configure the right cloud-based IT ecosystem to support a growing business.

True digitalisation isn’t simply a matter of converting documentation into electronic form. It’s about capturing and leveraging data in real time, where and when it happens. It is AI driven and intelligent, enabling continuous improvement, while not being dependent on any one individual’s knowledge or experience to work effectively. It is workflow aligned and workflow enabling, rather than a static repository of data.

Continuing to rely on non-standardised, outgrown systems in today’s volatile, fast paced consumer landscape is highly risky. With suppliers of fast-moving consumer goods (FMCGs) increasingly relying on their external partners to help bring products to market quicker and cost effectively, the last thing that co-packers and 3PLs need is for brittle legacy systems or cumbersome spreadsheets and manual processes to let them down. What’s more, major FMCG firms are bringing higher expectations around the responsiveness of their contract suppliers, and with that, expectations around digital sophistication to enable that improved service.

Trading spreadsheets, voicemails and emails is no longer best practice, when collaborative real-time data sharing is possible. Logistical challenges are almost unavoidable when traditional supply chains are relying on antiquated systems. For an example, in the event of product recall, tracking down and quarantining specific products using dated methods can be time-consuming and error prone. Digitalisation permits fast and easy tracking of materials and inventory at the batch and item level, and traceability takes minutes rather than days.

Evaluating if your current systems are adequate to cope with the businesses’ growing needs – now and in the future – is therefore essential.

 Delivering for co-packing business operations

With the common misconception amongst contract packers that legacy systems and paper-based systems do everything they need them to do, the introduction of Nulogy’s Shop Floor Solution has meant for those innovators who have invested in the latest technology, their costly blinds spots of inefficiencies have been eliminated. Time-consuming manual entry procedures, inaccurate materials and inventory management, and error-prone quality controls are eradicated.

Leaders who have embraced digitalisation in the past are now reaping the rewards in the present. For the likes of supply chain firm, The Keswick Enterprise Group, investing in Nulogy’s purpose-built platform for co-packing has played a key part in optimising the operations of their two FMCG-focused co-packing subsidiaries, SGL and APS. Gone are the days of predictable consumer demands and stable value chains, the company found itself increasingly thinking of tomorrow’s likely requirements and questioning if its pre-existing systems could cope. High quality products for customers demand high quality operations and in realising this, investing in Nulogy has been key to driving greater efficiencies through the functionality and developments of software.

And, while improving the day-to-day processes of a co-packer environment, investing in software like Nulogy also enables suppliers to align with more strategic goals of brand customers. Sustainability, for example, has evolved to become a major focus area for FMCG brands, but with external supply chain partners managing materials and inventory, the potential for waste is considerable. Through digitalisation, however, co-packers can better identify and manage inventory to reduce waste by avoiding issues such as overstocking and obsolete inventory.

Co-packers offering efficient, high-quality, transparent operations are those who will win in the market – and brands recognise this as an integral part of their outsourcing strategy.

Staying ahead of the game

For co-packing suppliers who may think they are digitalised, it is vital that they review their current strategies and consider how digitally optimised they truly are.

Indeed, embracing true digitalisation as enabled by Nulogy’s cloud-based software will deliver tangible results in supply chain efficiency, quality, and profitability while reducing risk and costs. Most importantly, suppliers can strengthen and optimise service to their brand customers and earn the reputation that will win them more business. Ultimately, innovative leaders will be those who recognise that seizing growth opportunities demands the readiness to embrace change. And those who implement accordingly will be those who take their organisation to the next level.