Andy Neilson is a professionally qualified and award-winning procurement and supply chain executive who has delivered business transformational change programmes for global organisations. He has 30 years industry experience having worked for and/or supported large brands such as KMPG, Halfords, C&J Clark, Santander, Coca-Cola, Red Bull, Tesco, Asda/Walmart and many others.
On Wednesday 17 November (9.30 am-12.30 pm) Andy will provide a free webinar to help food and drink producers consider the robustness of their supply chains providing his expert guidance and how to use this to increase sales. We spoke to him about why supply chains are so important.
Why should food and drink producers be working on their supply chains?
There’s a massive focus on product development and sales but from my point of view procurement and supply chains can add just as much value for food and drink producers. It’s easier to save money than get new sales that’s why I think it’s just as important, if not more so than new customers. With the challenges of last year where we’ve seen many supply chains breaking it’s now even more crucial.
With small and medium-sized business there’s a lot of learnt behaviours and rightly so as a small business, you tend to carry on trading and acting the way you did when you started. That’s until someone shows you a better way or you learn yourself. I want to give these businesses a better knowledge of what the supply chain and procurement support can provide for them.
What will you be discussing at the workshop?
The session covers what it means to have supply chain resilience and we look at the process of supply chain mapping i.e where do your supplies come from – packaging, labelling etc.
Many organisations don’t appreciate the supply chain behind their products. Supply chain mapping asks you to look at your own supply chains and map them out to see where they could potentially break and/or where they could be improved.
For example, at the moment sea freight is a massive issue because of the cost and availability of containers. In China and the UK there are workforce issues, that could affect your business. Mapping will help you see this.
Mapping also links to the traceability and sustainability of your supplies.
Why is it important to manage your supplier relationships?
For many SMEs they are at the smaller end of the customer-supplier relationship, they certainly won’t be the biggest customer. So, the question is how do you become the most important customer?
You need to create value in the relationship rather than it being just a transaction. It’s about open communications, respect, understanding and trust.
Back up plans for your backup plans
Contingency planning is vital for food and drink businesses so if you have a backup plan you should to be testing that so you know it will be there for when you need it.
What happens if your haulier who distributes your products has no wagons or drivers? Your plan might be to use another haulier, but what if there is a driver shortage that affects all hauliers? Your backup plan could be to get the customers to collect rather than deliver. You need to think about what you might do.
Always stress test your contingency plans no matter what they are. Don’t assume everything will be ok – this is naïve and short-sighted and has sadly caught many out in the pandemic.
As a food producer or manufacturer, you want direct relationships with your supply base, no matter how big or small they are. You might be buying supporting materials such as packaging or ingredients to add. For example, I’m working with a cider manufacturer at the moment and their biggest spend is apples, but they also have glass, packaging and fruit concentrate for other flavours they buy in. They need to manage all these relationships with a focus on the apple supplier.
Strong supplier relationships
What the last 2 years have shown me is that when there are commodity shortages suppliers have to pick who they want to supply to and it isn’t necessarily the big customers. This is when a strong or weak relationship matters. For example, would you supply to someone who is going to pay you in 120 days or someone who pays you in 30 days and always treats you with respect?
People are just starting to realise the benefits of strong supplier relationships.
Winning business through a robust supply chain
If you can demonstrate you have a robust supply chain this can help you gain ground in submissions for new work or bids.
Part of my work has been on the sales side to look at submissions for work and how to demonstrate added value. At the webinar, I will cover how to demonstrate your mitigated risk so the customer won’t have to worry if they chose you.
More buyers now want this robustness and want potential suppliers to demonstrate their social values programmes, sustainability, traceability, ethical sourcing etc. They want to know how you audit your suppliers and beyond.
If a UK retailer sells something and somewhere in the supply chain there is child labour or slave labour involved, for example, it’s the retailers that suffer. So supply chain investigations have got longer and rightly so because it’s absolutely necessary.
I’m seeing more examples of bid submissions coming in where there is more focus on the non-commercial aspects and a lot more insight is being demanded from those submitting the bid.
Start with your spend
If you are wondering where to start with supply chain resilience it comes down to your spend – what do you buy and who do you buy it from?
As your business develops and you start to buy more you need to focus on what and how you buy. It’s about how you organise this, how do you form those relationships, how do you ensure the price they quote is what you eventually pay and how do you audit trail your outgoings?
As soon as you start employing people and giving them responsibility for your business that’s when control and governance need to be very clear to the people who are spending money on your behalf, setting up ground rules.
I’ll cover what SMEs need to invest their time on, covering a checklist of best practice, the structure you need to follow to provide that level of control, commercial awareness and governance within your business. I’ll help you avoid some of the pitfalls and remove assumptions putting common supply chain myths to bed covering what you should be doing and why.
To find out more book your place for the Food and Drink Supply Chain webinar on Wednesday 17 November.
