Many consumer packaged goods (CPG) manufacturers are affected by supply chain shortages and are taking steps to avoid shortages or overproducing items, not in demand. In October 2022, PepsiCo said it plans to automate and digitize more of its supply chain data to ease ingredient shortages and boost efficiency. PepsiCo CEO Ramon Laguarta and Chief Financial Officer Hugh Johnston said the company is focused on “automating and digitizing our supply chain to support our innovation pipeline with greater agility and speed-to-market”.
Rising commodities, packaging, freight, and energy costs weighed on Nestle’s operating profit margin. Fixing supply issues is also a top priority of Tyson Foods, the biggest meat company in the U.S. and the country’s largest processor by sales. For example, the demand for chicken is further worsening existing supply issues in the meat space and Tyson Foods is investing in automation and worker retention programs to improve chicken production and efficiency.
“Approximately 80% of the supply chain challenges we face today are due to upstream supply disruptions on ingredients and packaging materials,” said Miguel Patricio, chief executive officer of Kraft Heinz. Supply chain disruptions also brought changes to the beer market and to companies such as AB InBev, the world’s largest brewer.
A cloud-based manufacturing execution system (MES) can improve CPG supply chains. Under these dynamic conditions, CPG manufacturers must use raw materials and ingredients efficiently, decrease waste, keep orders on schedule, and boost supply chain resilience.
Amid this scenario, CPG manufacturers should pay attention to the potentially transformative role of a multi-tenant software-as-a-service (SaaS), cloud-native smart manufacturing platform, such as the Plex solution offered by Rockwell Automation, which includes fully integrated, easy-to-deploy solutions for advanced MES, quality management system (QMS), supply chain management, asset performance management, production monitoring, and plant-level enterprise resource planning (ERP) integration.
Cloud-based MES systems offer several advantages over on-premises MES such as:
- An on-premises MES requires time and capital investments. But cloud-based MES solution is easy to deploy, and requires no hardware or customization, costly upgrades, server maintenance, or frequent oversight.
- Cloud-based MES tracks incoming supply, manages the flow of goods in and out of a facility, and tracks lots, inventories, and expiration dates that affect raw material quality, all in real time.
Overall CPG manufacturers can make their supply chains more effective and resilient, enhance safety, and quality control measures, ensure regulatory compliance, and remain competitive using a cloud-based MES.