Lessons from Kerry

WITH the coronavirus pandemic still disrupting normal operations, business plans, and life in general, the real issue is how to stay on track in the months – and even years – to come. Our exclusive interview with Shane Bracken, Regional Chief Operating Officer (Manufacturing), Kerry Asia Pacific, Middle East and Africa (APMEA) serves as an overview of COVID-19’s impact on the food and beverage industry and supply chain and more importantly, shares how Kerry navigates this crisis,  making sure customers and community are well supported during this pandemic and long after.

How is Kerry – with its network across the globe – working to provide customers with products at this time?

As the COVID-19 situation unfolded across the regions, our initial focus was keeping our manufacturing sites open and our end-to-end supply chain active in line with essential services regulations set out by the Singapore government. Kerry utilised both its local and regional manufacturing footprint to ensure supply was not interrupted. Once this was established, our attention turned to demand and forecasting; by working directly with our customers and understanding their pain points, we were able to use our manufacturing footprint to solve multiple supply issues that other suppliers may have had as a result of their single site manufacturing capability.

The most important thing we did was to go straight to the customer to understand their issues and then construct a solution. Given the major investments across APMEA (Asia Pacific, Middle East, South Africa) in the past, Kerry was able to utilise not only its capability but its capacity to supply across the region.

Kerry has also continued to look to the future and the new state of the markets, providing insight into what functional ingredients and products will drive markets post COVID-19. The point is that it is not just about now, it is about working with our customers on the recovery, that is the new reality.

Which markets are badly hit? How is the Southeast Asia market doing?

At this point, most markets have been impacted in one way or another given the substantial curfews and restricted movement mandates. These have driven reduced volumes in the foodservice market but increased retail opportunities across the region. Delivery services are the winners in our current state, having become the sole mode of supply across much of the foodservice market. Although we are seeing reduced volumes as a result of closures and restricted movement across Southeast Asia (SEA), if we look towards China and their recovery, we have a window into the future of SEA. China has started its recovery in a controlled manner and with the lifting of restricted movement orders and re-opening of offices, there is cautious optimism that volumes will start to reach pre COVID-19 levels later in 2020. If China is a model for Southeast Asia, then based on current performance, the next 30 days in SEA will dictate the second half of 2020 for the region.

Tell us about the challenges in the supply chain, maybe disruptions in distribution, inventory, raw material shortage.

Four areas to look at:

#1 The ability for essential services such as food to continue operating was difficult. However, we were able to overcome this early. The main concern continues to be the distribution and supply chain delays. Vessel redirection and cancellation in mid- to late-Feb posed significant challenges which moved many into air freight for essential items. Kerry’s continued connection with customers on visibility of lead times proved essential in allowing the entire supply chain to readjust quickly and prioritise.

#2 The supply of PPE and masks has been an ongoing issue not just for the health industry but the food industry as a whole. Kerry has the highest level of safety and quality processes throughout its facilities and ensuring these are maintained is a high priority. We have always had a separate team that ensures all of our PPE and hygiene requirements are met.

#3 For companies that have invested in contingency plans and suppliers across the region, this time has shown us options. The new reality will now see more locally sourced materials as part of future mitigation plans or at the very least, we will see a proportion redirected to local supply if it wasn’t previously there. I am sure we will see the creation of many local industry capabilities that may have not been there prior to support gaps.

#4 Contingency planning for both operations and supply will be as high a priority as any quality programme in most companies if it wasn’t there before. Cash is king at the moment so many companies will see credit days stretched and payments delayed. This is a significant issue not just for smaller companies but all companies. We talk about disruption to the logistics routes, cash has also been disrupted and this needs to start flowing if the supply chain is to be maintained.

Are there opportunities for overall improvement?

Stay close to the customer, understand their needs and issues, keep communication open and visible. Know what the drivers are in their business and support accordingly. Support isn’t just about the transactional aspect (the product), it can come in many ways, from sharing knowledge and insight to helping connect suppliers of raw materials and essential items, and generally be a partner in times of crisis.

Keep your people safe, everything that has been said about the customer is true for your people. Many are giving everything, including leaving their family at home to help drive the supply chain and keep food on shelves. There are people who are going to be tired and there are people who are affected more than you know from this event, as it gets worse. And there may be cases where COVID-19 gets even closer to some families, so keep close to the team, know when they’re getting tired. Not everyone needs to be on every call but make sure we keep everyone in the loop. Both the customer and our people will direct us to what we should do, we only need to listen to make decisions that will ensure the security of supply.

What best practices are helping Kerry cope with the crisis?

Under no circumstances is a disruption in the supply chain a disruption in safety and quality. These are non-negotiable and staff need to know that no matter what other decisions are being made within the supply chain, we cannot question the standards that have built and sustained a business. Our contingency planning and partnerships across the supply chain must be maintained as much as possible; suppliers and manufacturers know that this has an end date, so by fracturing this and not keeping your eye on the recovery would mean giving up too early.

Thanking your people, being there to support and having empathy will ensure we also have a full team at the end. We cannot forget the foundations of what built companies; keep true to the business, its culture and your fundamentals. Getting back to basics will help your people cope and the company’s sense of purpose will drive why people will go the next mile. Given the ever-changing situation, flexibility and agility is vital. Companies with the ability to switch and rediscover opportunity will be the winners.

Moving forward, how can the company serve its customers during local/global crisis? What changes need to be made?

Listen, communicate and act together. Real contingency plans have allowed suppliers to gain the support they need in this crisis, having plans that have been tested and enacted are where companies have won. Being open and honest will help everyone, understand the new realities and work together to find a solution.

There is only one true solution to this event and that is to drive volumes as fast as possible. Together with utilising both supplier and customer insight to predict what the customer wants post COVID-19 will ensure a win for all. We need to remember that what we knew before will certainly be different post COVID-19. How we prepare for that now is how we help our customer and the consumer: think predictions, more localised supply, shift to functional and value-added ingredients, shift to traditional foods and most importantly, value propositions, as the economy recovers.