Beyond the Barn: Tech’s Role in Transforming Global Supply Chains

In today’s dynamic market environment, leveraging technological advancements is essential for optimising supply chain operations, particularly in the Dairy and Consumer Packaged Goods (CPG) sectors. Companies are pioneering innovative technologies to enhance operational efficiencies and respond proactively to market demands.

A core strategy involves the adoption of “touchless” demand planning. This advanced approach utilises state-of-the-art supply chain planning tools to reduce human bias, enhance performance, and rely on statistical models and AI-driven insights for exception-based planning. This system allows planners to intervene strategically, ensuring the process is efficient and highly effective.

Integrating comprehensive external data sources – including point-of-sale information, public holidays, and weather patterns – into the analytical framework allows for a nuanced understanding of market dynamics. This robust integration supports more accurate forecasting and demand planning, which is critical for effective inventory management and resource allocation.

Enhancing Human Capabilities
The “Augmented Workforce” concept showcases how technology can supplement human efforts. By equipping teams with advanced tools and data analytics capabilities, employees can accomplish more in less time and with greater accuracy. This enhancement boosts productivity and empowers the workforce, enabling them to focus on more strategic tasks rather than routine data analysis.

At the same time, despite the apparent benefits, integrating new technologies into existing systems also presents significant challenges. A common issue is the overestimation of technology’s role in digital transformation. At FrieslandCampina, this challenge is met with a robust organisational change management strategy that balances technology adoption with people and process management enhancements.

Adopting touchless demand planning with AI-driven tools reduces human bias and enhances supply chain performance.

The recent inauguration of two state-of-the-art manufacturing facilities in Asia is a testament to the company’s commitment to technological innovation and sustainability. These facilities, designed to comply with Industry 4.0 standards, incorporate advanced robotics and automated systems that enhance operational efficiency and product quality.

Moreover, these new plants focus heavily on sustainable production practices. By implementing green technologies, the aim is to reduce CO2 emissions by up to 90.5%. This supports the company’s sustainability goals and sets new industry standards for eco-friendly production.

Tech Impact on Market Responsiveness
The integration of IoT and advanced robotics continues to revolutionise the industry by enhancing operational efficiencies and improving product quality. For example, the use of AI and machine learning refines operational processes; image recognition technology ensures optimal in-store execution, and predictive analytics help fine-tune inventory management.

Additionally, the strategic use of technology helps mitigate the well-known bullwhip effect, where small fluctuations in demand at the retail level can cause progressively larger fluctuations up the supply chain.

To succeed in the Dairy and CPG sectors, companies must sense, identify, and predict changes in customer behaviour as early as possible. Technology helps supply chain business leaders maintain short—and long-term synchronisation between demand and capacity, avoiding bias.

The journey of digital transformation in supply chain management is ongoing. By integrating cutting-edge technologies that meet current market needs and anticipate future demands, the company sets new standards for the dairy industry. It reinforces its commitment to sustainable and responsible business practices.

Silvano Lago is the Global Director of IT Supply Chain and looks after all the IT Solutions at Royal FrieslandCampina that underpin the Global Supply Chain, from milk intake to delivering the finished goods to the last mile.

Meanwhile, Satish Mikkili oversees SAP implementations and serves as a Subject Matter Expert (SME).