Josephine Coombe, Managing Director of Nulogy in Europe, highlights how many contract packers rely on inflexible legacy systems and processes that are unable to deliver the wider opportunities that true digitalisation delivers.
This article contains paid-for content created in collaboration with Nulogy.
Embracing digital transformation is increasingly recognised as key to operating effectively within today’s fast-paced supply chains and contract packing and manufacturing services are no exception to this. Yet, digitalisation is an often-misunderstood word that means many things to many people, so much so that many companies often think they are ‘digitalised’ when in actual fact they are not. What they may have is a brittle and outdated computer system that acts as little more than an electronic filing cabinet, housing data that depends on significant manual entry and paper-based processes for its inputs.
What do we mean by digitalisation?
True digitalisation isn’t simply a matter of converting documentation into electronic form. Instead, it’s about capturing and leveraging data in real time, where and when it happens. It is AI driven and intelligent, enabling continuous improvement, while not being dependent on any one individual’s knowledge or experience to work effectively. It is workflow aligned and workflow enabling, rather than a static repository of data.
With true digitalisation, opportunities for human error are reduced because the system eliminates the need for manual inputs that often take place after the fact (e.g., entering production data at the end of the day). In addition, real-time data capture prevents human error by alerting people to problems before they happen rather than after. For example, if a forklift driver receives an instant alert that he has picked the wrong item when he scans a barcode, he or she saves the wasted time, effort and expense of taking the wrong materials to the staging area.
Yet, while the above may seem intuitive, many companies are often held hostage by their internal IT systems that are hard to manage, hard to maintain and upgrade, and dependent on key personnel to run or fix. This situation can quickly become unmanageable and fraught with high risk, drawing resources away from contract packers’ core competencies. And as the business grows, so does the risk and expense of maintaining these systems.
Often, these legacy systems may even be branded by internal IT staff as ‘digitalisation’, when in reality they are usually detached from core workflows, do not capture real-time data, are generally expensive to run, and inflexible.
Delivering for co-packing business operations
At Nulogy we have heard many a contract packer profess that their legacy systems and paper-based systems do everything they need them to do — missing the bigger picture and the opportunities that come with it. Usually, in these environments, we uncover costly blind spots of inefficiency, such as time-consuming manual entry procedures, inaccurate materials and inventory management, and error-prone quality controls. These legacy systems also magnify risk substantially to both co-packers and their customers. As customers increasingly rely on their contract packing partners to act as custodians of their brands’ integrity, their expectations around issues such as recall readiness have markedly increased. But if lot traceability is not digitalised, a mock recall – or worse, a real one – will be a cumbersome, and lengthy process. This puts the customer and the co-packer at risk.
The potential for software and digitalisation to provide a competitive advantage has long been recognised by forward-looking businesses. As far back as 2016, SGL Co-packing, part of the Keswick Enterprises Group, was already looking to modernise its systems and improve the visibility, flexibility and service provided to its customers.
At the time, SGL was relying on a combination of historic IT solutions, integrating manual processes with a variety of spreadsheets and systems to meet the needs of its customer base across the dry food and general merchandise sector. The business knew that it had an opportunity to drive improvements across its operations by having greater visibility and access to its data. According to Gavin Withers, Director at Keswick Enterprises and lead in the Group’s co-packing activities, the question was ‘how to access this and what system would be best for its needs’.
Gavin and SGL turned to Nulogy with specific objectives including delivering greater control of stock and improved access to quality records. Rather than select a more generic ERP system that would need to be significantly adapted to meet SGL’s needs – a highly costly undertaking fraught with risk — they chose to work with Nulogy because of their focus on the contract packing sector and expert knowledge of the contract packing workflows.
“The benefits could be seen almost immediately and from the start the software delivered for us. We had far greater knowledge of our stock and its location and from this we were able to meet customer orders more effectively and efficiently,” said Gavin.
“And having been involved in a number of system changes throughout my career, this change was very much at the smoother end!”
SGL has also been able to leverage Nulogy to enable improved collaboration with major FMCG customers. As a cloud-based platform, Nulogy allows for integration and sharing of key order milestones and other critical information with brand customers, giving Nulogy-powered co-packers another competitive edge in the market, relative to their peers that rely on older “on-prem” solutions.
Enabling the ability to adapt to change
SGL is not alone in using digitalisation to enable wider opportunities for contract manufacturing and packing businesses. Marsden Packaging, based in Blackburn, specialises in primary and secondary packaging services for the food and pharmaceutical sectors and has been using Nulogy’s software to power its operations in the UK for over five years.
The software replaced a combination of computerised and manual systems and allows Marsden to manage its production flow more efficiently and perform all necessary quality checks. This provides the visibility and technological access that customers demand from the supply chain.
Digitalisation through Nulogy’s platform has also driven many benefits including the ability to meet the specific challenges arising from the pandemic, for example enabling a business to track employees in real time to be prepared in the event of a potential COVID-19 infection within a production site. The company was able to generate reports by shift, specific time period, and production line to quickly identify and isolate areas of risk without the need to shut down an entire facility. In addition, contacts could be traced while preserving employee privacy— a shining example of how a truly digital system adapts to evolving situations to deliver for clients.
Michael Briggs, Managing Director at Marsden Packaging, said; “I would never hesitate to recommend Nulogy. Since its first day, the software has revolutionised the way we operate, providing total visibility to the flow of goods within our business.
“This has allowed us to react much more quickly to changes in demand, as well as continuing to deliver efficiencies across our production and QC processes.”
Protecting supply chains from labour constraints
Many warehousing, contract packing, and manufacturing businesses are focusing on developing strategic solutions for ongoing labour shortages – and true digitalisation is helping them to maintain productive operations.
Nulogy is safeguarding co-pack businesses by digitalising their workflows, meaning operational knowledge is embedded in the system itself rather than relying on specific employees who are familiar with production processes. If an employee leaves or is absent, process information and historical knowledge are still retained within the business, minimising the impact and enabling production to continue.
With staff shortages likely to continue into the foreseeable future, business leaders need robust strategies to stay ahead. Digitalisation is helping many manage this situation and proving a powerful tool in mitigating against drops in productivity.
Avoiding waste and maximising efficiencies
With the ever-increasing rise in consumer and governmental pressure for more sustainably produced products, brands are continuously looking for external partners with sustainability-first mind sets. Here, again, true digitalisation has a fundamental role to play, helping a business reduce its impact on the environment through efficient management of stock and avoidance of waste.
By knowing precisely what stock exists in the business, or where it is within the supply chain in real time, digitalisation enables better decision making and avoidance of waste from potential over-stocking and obsolete inventory or the expediting of rush deliveries.
Co-packers offering leaner, transparent operations are those who will sustainably innovate supply chains of the future – and brands and consumers will recognise this as an integral part of their outsourced solutions.
Staying ahead of the game
For external manufacturing and co-packing suppliers who may think they are digitalised, it is vital that they review their current strategies and consider how digitally optimised they truly are.
True digitalisation as enabled by Nulogy’s cloud-based software will deliver tangible results in efficiency, quality, sustainability, and profitability. Ultimately, innovative leaders will be those who educate themselves on the software of tomorrow and implement accordingly to take their organisation to the next level.
