Supply chain continuity

A SINGLE ingredient that isn’t delivered on time can be a source of multiple problems for a manufacturer. While a supply chain is not free of disruptions such as this, players involved are expected to work at maintaining its resilience. In this interview, Noel Dunbar, Vice President, Supply Chain, Kerry APMEA, cites Kerry’s assets in relation to supply chain continuity.

Noel Dunbar, Vice President, Supply Chain, Kerry APMEA

The longer the supply chain, the more complicated. How is continuity best ensured?

We ensure continuity of supply through our extensive manufacturing footprint across not only

SEA but the entire region and globe. This, together with support from our internal Kerry partners and fantastic network of suppliers, gives us a unique contingency platform for both raw materials and finished goods. In fact, in APMEA alone, our 26 manufacturing sites can offer supply to over 60 countries worldwide.

While COVID-19 is a unique situation faced by all companies and industries, we are very fortunate to firstly have this extensive manufacturing and contingency footprint in place and secondly, strong relationships and collaboration with suppliers and customers that ensure we can quickly work together to prioritise our customer needs.

Our absolute priority remains the safety of our workforce, food safety and quality.

Were there choke points encountered during COVID-19? Was there a backlash as a result of China shutting down it borders in the first quarter?

While the initial challenge was in China, we managed to navigate through this phase using a lot of the relationships and networks mentioned above.

In fact, I would say that the situation in China brought some learnings and opportunities in customer engagement not only in Southeast Asia and APMEA, but Kerry globally. Two examples of this: 

• A critical element of any supply chain is the quality of the demand signal or understanding production requirements. Through our experience of consumer behaviour and how it affects timing and demand trend, we have been able to apply these trends to what I now call demand “sensing” rather than demand “planning”. The key difference is that “sensing” is a far more fluid approach and requires a very agile organisation to be able to react in such an environment.

• As part of our actions in China, our QSHE developed a Plant “Playbook” to ensure safe work procedures and processes in our manufacturing facilities, such as social distancing. This playbook is regularly updated to reflect the ever-changing situation and is now used in over 100 facilities in the global Kerry network. 

What can be said about the industry’s situational readiness?

Given the unprecedented nature, scale and speed of this crisis, I am not sure we can say that our industry or indeed any industry was ready for such a unique event. 

What I can say is that the companies that had tried-and-trusted processes both internally and among functions, for example Supply Chain & Commercial (S&OP) and had built trust and collaboration with external parties (e.g. suppliers) were in a much stronger position to react. Our experience has been that transparency and communication across every aspect of your supply chain and wider business is the key to success and maintaining a balanced business outcome. 

Companies have their own systems and methods for “being prepared”. For some, having an inventory for one year is good. For Kerry, what would “being prepared” mean?

First and foremost, being prepared starts with staying calm and in Kerry’s case, not compromising on the safety of our workforce, food safety and quality and service to our customers.

Also, it is important to have a good Business Contingency Plan (BCP) in place and be able to utilise your existing network to maintain best-in-class service while balancing key drivers like inventory and costs.

This can only be achieved by having a clear business strategy both commercially and operationally, and it is essential that all partners, suppliers and customers are aligned to these overarching goals.

Having seen the effects of COVID-19 on the supply chain, companies are likely to introduce new measures to ensure continuity. Are there any such steps that you are taking, or are you aware of any measures to be taken by other players within your supply chain?

Absolutely all companies will be reviewing their reactions and what went well or not so well. Personally, I feel that BCP planning and localisation both for manufacturing and supplier base will have renewed focus.

Secondly, I expect that companies will be looking to greater collaboration between all internal functions and at platforms for information-sharing such as inventory and demand as a full chain (from materials to shelf) to provide quicker and more detailed demand signals.

Kerry puts this in practice, but this crisis has emphasised the need for a fully functioning and robust S&OP and no doubt, we will be reviewing this as we move forward.

Are there tools for managing supply chains?

The current tools are largely designed for the “norm” within supply chain whereas this crisis has brought a new reality and challenge in terms of systems. Already, we are seeing a lot of coverage regarding greater use of AI and digitalisation to ensure a more efficient supply chain and within the wider business context. It will be very interesting to see this quickly gain momentum in the coming years.

That said, the quality and commitment of our people throughout the region, globally and our suppliers and customers are what I consider to be the ultimate “tool” to manage this crisis.