The PartnerLinQ Advantage: 5 Key Value Adds for Food and Beverage Supply Chain Optimization

Foodservice on the Rebound?

Consumer interest had increasingly tilted towards experiences like travel, movies, and entertainment over the last decade. So being homebound over a year and a half has naturally created a void in people’s lives, with a craving for activities that create memories and provide entertainment. This was reflected by an immediate increase in restaurant transactions when municipalities tentatively eased restrictions for on-premises dining in 2020. And following a widespread rollout of vaccines in the US, consumers are becoming more confident about eating out. The first signs of a shift in spend pattern are already evident. The US Census Bureau’s Advance Monthly Sales for Food Services1 show a surge in April sales for food services and bars, with dollar sales up 15% from a pre-pandemic 2019 and a whopping 116.8% over last year. As per a NielsenIQ survey2, 62% of Americans miss eating out at restaurants the most and 28% of households are planning more trips to restaurants and bars than they did in 2020.

Reimagining Customer Experiences

Foodservice outlets are also innovating in terms of customer experiences and product offerings as their buyers still prefer contactless, hands-off transactions. Quick-service giants like McDonald’s and Burger King are redesigning premises3 with smaller dining rooms, more pick-up options, and a distancing of store operations from guests. Some like Maggiano’s are presenting a whole line of pre-cooked meals for consumers to take home and eat later. As restaurants desperately try to recapture lost sales, they are boosting up their catalog of digitally-delivered meals to ease household cooking burdens and provide in-home restaurant experiences. New methods of delivery like on-demand food trucks and in-garage grocery delivery services are picking up, while brands like Albertsons, Domino’s, and Kroger are experimenting with sophisticated technological alternatives like robots, drones, and driverless delivery services.

Food and Beverage Supply Chain Optimization: A Continuous Process

But the F&B industry also needs to continue looking for ways that optimize supply chain and partner networks in order to meet quickly evolving market demands. Many food makers and distributors are facing impediments like labor shortages, supply constraints, and high freight costs, which make it difficult to deliver all their products on time. Retailers had overlooked such deviations for months during the pandemic. But they are less willing to accommodate now as companies strive to get back to business-as-usual amid a reopening economy. Big buyers like Walmart are imposing chargebacks on suppliers for late deliveries or incomplete orders, while Kroger has launched a new ‘supplier discovery program’ to add new, diverse, and more reliable suppliers for farm produce, bakery, meat, seafood, and dairy.

On one hand, friction between food retailers and their suppliers adds costs across the food value chain. On the other, end-consumers are struggling to come to terms with job losses or other financial hardships brought on by the COVID-19 pandemic. Buyers are growing increasingly more price sensitive; IRI data4 indicates that a 10% increase in the price for edible products could reduce sales volume by as much as 17%.

The PartnerLinQ Advantage

To fully utilize a period of increased demand, PartnerLinQ provides food service organizations a number of distinct advantages to extract maximum value out of their supply chains.

Easy Partner Onboarding

F&B companies need to rapidly onboard new sales channels and supplier partners to take advantage of opportunities as and when they emerge.  PartnerLinQ supports EDI communication as well as direct B2B transfers to and from non-EDI organizations. It also supports a wide range of common data interchange standards to ensure reliable and secure communication across partner networks. With its EDI-optimized business rule engine and extensive preconfigured business rule library, PartnerLinQ increases the flexibility to connect with partners on their own terms and makes it possible to respond faster to partner-driven changes.

Automated End-to-End Workflows

PartnerLinQ’s infinite job scheduler allows organizations to configure, schedule, and execute multiple transactions simultaneously, including features like a bulk transfer of business-critical data to trading partners without any human intervention and without interfering with other business processes. Removing hands-on processing means that F&B organizations can ensure fewer errors and improved customer relationships, leading to improved delivery of goods and services and reduced customer turnover. A streamlined and automated communication process enhances compliance and helps avoid fines due to SLA breaches, payment delays, and performance gaps. PartnerLinQ’s built in auditing functionality gives F&B organizations the information to combat chargebacks and provide proof of delivery to end customers.

Smarter B2B Integration

PartnerLinQ integrates natively with Microsoft Dynamics 365 and can be integrated with other ERP systems at the same time without the need for additional licensing or subscriptions. It also provides robust support for EDI integration with dozens of ERP systems and ecommerce platforms. This allows foodservice businesses to shift seamlessly between EDI ERP and API-based integrations and with corporate parent companies or wholly owned subsidiaries at the same time, making support and maintenance more efficient, more attractive, and less vulnerable. F&B organizations can enjoy seamless connections with all network partners and a variety of internal systems while deploying multiple supply chain solutions within a single platform.

Hybrid Cloud Architecture

The food supply chain software ensures a simple and robust cloud deployment that minimizes infrastructure costs and enhances analytical reporting powered by Azure’s serverless, scalable, event-processing engine. A hybrid cloud architecture provides the most agile, flexible, and frictionless way to exchange B2B data, enabling further F&B supply chain optimization and empowering foodservice companies to take on the complexities of a multi-enterprise, multi-application integration process. In addition, they can now enjoy real-time visibility to garner insight and control across the entire value chain.

Omnichannel Integration

PartnerLinQ’s multi-channel integration capabilities allow it to combine perfectly with a Headless Commerce architecture, which separates the front- and back-end of an ecommerce solution to enable faster and more flexible customer experiences. It is also aligned with a unique CSP program and a layer of API integrations, delivering tailored experiences unique to customer preferences.

Gearing Up for the Next Normal with PartnerLinQ

In addition to a digitally-empowered F&B supply chain optimization, PartnerLinQ helps foodservice companies increase throughput, establish and enhance supplier relationships, keep track of deliveries and stay on schedule, while reducing chargeback risk and taking on new market opportunities and additional channels in the new normal. PartnerLinQ’s food supply chain solution also helps manufacturers keep traceability in house, remain in line with customer preferences, and increase connectivity across channels – both traditional and e-commerce.

Endnotes:

1. https://www.census.gov/retail/marts/www/marts_current.pdf
2. https://www.nielsen.com/us/en/insights/article/2020/understanding-consumer-sentiment-can-help-companies-adjust-as-the-u-s-begins-to-re-open/
3. https://www.bakingbusiness.com/articles/53819-foodservice-adapts-new-concepts-as-it-recovers
4. https://www.iriworldwide.com/en-us/insights/publications/cpg-pricing-promotion-revenue-growth-during-inflation

Smarter B2B Integration: A Must-Have for Food & Beverages Supply Chain Networks

Consumer spending on food had been remarkably consistent in the US from 2016 to early 2020. As per McKinsey’s study, growth hovered around 4% annually, while total spend was almost evenly split between retail outlets like grocery stores and supermarkets and food service organizations like restaurants, fast-food locations, coffee venues, and school and office canteens. While the COVID-19 pandemic drastically impacted margins for almost all business segments, the food & beverages (F&B) segment rode the storm better than most. From $6196.15 billion in 2021, the industry is expected to reach $8163.61 billion in 2025 at a CAGR of 7%.

Yet, March 2020 upended the distribution of consumer spend dramatically. Amid lockdowns and the perceived health risk in public places, people preferred staying and eating at home. Sales in groceries and supplies grew 29% compared to the previous year, while food service centres saw a corresponding dip of 27%. More cooking at home led to more staples sales, while consumers increasingly turned to comfort food to cope with heightening anxiety. Canned soup sales were up 200% year on year, frozen food 40%, potato chips 30%, and popcorn 48%.

Rebalancing Supplies to Address Changing Demand

Over the years, F&B distributors have been running a balanced and optimized supply chain where upstream orders come in based on the forecast of downstream orders going out. As a result, revenue margins were also largely dependent on a steady flow in both directions.

But with the rapid shift in consumer spend pattern brought about by the pandemic, the previously balanced system was completely upended. Downstream orders came to an abrupt halt with restaurants closed, but upstream orders kept coming in from the farms, food-service producers, and processors. This led to a clog in the logistical chain as well as shortages in storage space. As distributors cancelled incoming shipments from farmers, food products were stranded upstream, leading to food-security risks for the more vulnerable consumer segments.  

Food distributors have also been by quick-service and casual-dining outlets switching to takeout-only modes of service. Some have partially adapted by taking the online route and initiating delivery services. But those that do not supply to retail channels have had to completely overhaul their sales routes, making their supply chain transformation even more challenging.

Gearing Up for the ‘New Normal’

F&B distributors who managed to rebalance their supplies are now left with overcapacity in their storage facilities and distribution networks. But the pandemic has also taught them a very crucial lesson – about maintaining reliability in supply even at the cost of price. As consumers grow more comfortable with the ‘new normal’, they will continue to save trips to the store given the increased domestic responsibilities they have picked up. While panic buying has ceased, using digital will only continue to increase. Many buyers who preferred to shop offline before the pandemic are now using digital channels having realized the convenience that online ordering provides.

So F&B organizations are increasing production to maintain their presence on retail shelves, while others are scaling up their e-commerce presence. But dilemmas still remain about the means to address demand peaks and the future demand scenarios to prepare for. In addition, consumers need to be reassured, employees protected, and high quality supply maintained even at elevated costs.

For F&B participants from farm to shelf, it is imperative to come up with creative solutions and integrate their collaboration channels to ensure a reliable supply despite intermittent plant closures and demand disruptions.

Supply Chain Integration for Collaboration and Insights

A flexible and agile supply chain can help F&B companies effectively respond to these ongoing challenges. But they also need increased visibility and data from every node of their value chain to generate actionable insights. Lack of transparency exposes supply chains to unnecessary risk; this is exacerbated by using outdated systems or traditional paper tracking and manual inspections. Fragmented information and lack of communication leave parties in the supply network with little to no knowledge of each other’s actions. This leads to inefficiency and waste and generates mistrust among suppliers and their customers. And the problem gets much worse as organizations begin to expand their markets and partner networks.

Increased visibility will also go a long way in keeping operational costs in check. While simple supply chains can optimize costs using spreadsheets, more complex ones are better served by an integrated network solution that does not require customizations for each individual supplier. Modern B2B integration solutions make a business more efficient, more attractive to customers, and less vulnerable to competitive forces. They enable seamless connection to all your network partners, while deploying multiple supply chain solutions within a single implementation process.

Harnessing the Cloud: The Smarter Approach to B2B Integration

The complexities of the post-pandemic landscape are acting as a trigger as more and more industries feel the push to go digital. Only a cloud-based, integrated solution can provide the convenience, scalability, and reliability that food service organizations need for managing data exchange, workflow, and transactions.

Visionet’s PartnerLinQ ensures a simple and robust cloud deployment that minimizes infrastructure costs and enhances analytical reporting powered by Azure’s serverless, scalable event-processing engine. PartnerLinQ is designed to guarantee business success by quickly setting up connections with new partners, customers, and sales channels and seamlessly integrating with smart devices and appliances. It minimizes repetitive processes and works across all data formats and transaction protocols. With PartnerLinQ, F&B enterprises can automate end-to-end workflows, achieve elasticity and scale, and enjoy a hybrid architecture that also integrates with on-premise legacy systems.

As regulatory mandates demand faster and more extensive reporting, customers want more visibility into all aspects of a transaction, and new business models start being formulated, the need for simplified and end-to-end B2B integration becomes more urgent. F&B organizations can no longer afford to work in silos – a smarter B2B integration on cloud can quickly reduce their time-to-market, optimize costs with standard, industry-specific integration processes, and take an omnichannel approach to order fulfilment.

You are probably familiar with this ‘BIG VAN’ claim repeated early and often by the champions of value-added networks (VANs):

‘The advantage of the network is the network itself.’

The claim, like all wide-ranging quotes, is to some extent only relatively true. Its validity depends upon who you are connecting with and how actively you link up with your trading partners. A closer look at the flow of goods and information within your business network will possibly reveal that no single network or VAN can address all your B2B/B2C communication needs.

While EDI and, in some instances, the VAN does help you connect, connecting with all your trading partners translates into a significantly higher ROI.  EDI today means more than simply X12; it means supporting multiple standards, formats, and transactions from X12, UN/EDIFACT, and GS1 XML trade messages to a number of non-EDI formats like JSON, flat files, text files, and proprietary XML message formats.

Read more: The truth behind the “competitive advantage” of value-added networks

EDI also means accessing a diverse set of communication methodologies – like AS2, MFTP, FTP, SFTP, and APIs – each with their own set of variables. While transaction formats and transportation methodologies make EDI more versatile, the complexity of handling such varied data formats and communication methodologies creates its own set of challenges, particularly when you consider the ‘BIG VAN’ value proposition.

The ‘BIG VAN’ value prop proudly claims that all members in your value chain are available on the same network or VAN as yours; while true to some extent, this is not an entirely accurate assessment. A VAN connection is by all accounts handy and, in some cases, necessary to interact with some trading partners. But it certainly is not everything.

The right tool with the right EDI transportation methods delivers far more effectively than ‘BIG VAN’ and at a lesser cost.

The Significance of the EDI VAN Interconnect

The ‘BIG VAN’ claim is largely backed by the EDI VAN interconnect. The interconnect is a tool that helps your value added network communicate with other value added networks and facilitates exchange of EDI transaction documents between connected pairs of trade partners. The more partners you connect with, the bigger the benefit derived from your communication network.

VAN interconnects effectively reduce friction between and among VANs, while also reducing the need for new VANs. The largest of the VANs reduce VAN-related confusion within partner networks by making claims to connect to thousands of trading partners; in effect though, ‘BIG VAN’ highlights the characteristics of EDI under which all EDI solutions and VAN partners operate. 

But what about transactions beyond X12 EDI? 

‘BIG VAN’ and the interconnect rely on a steady stream of ISA and GS identifiers within X12 transactions to move data, without which the ‘BIG VAN’ is about as useful as a cell phone without buttons.  While the VAN connection does handle X12, what about images, APIs, or XML files? These are typically not included in ‘BIG VAN’ offerings and, in most cases, require a different product altogether, adding to your overall cost.

A closer look at the VAN interconnect reveals that the reality of ‘BIG VAN’ is very different from the claim; if the interconnect connects ALL VANs then ALL VANs have the same access to trading partners, which means that ‘BIG VAN’ has a very different concern. ‘BIG VAN’ is concerned that it will inevitably be relegated to the stature of an ‘Ordinary VAN’ and without reservation. 

‘BIG VAN’ makes a big claim and living up to that claim is becoming nearly impossible.  This makes all ‘small VAN’ operators a competitive threat – why else would ‘BIG VAN’ make such claims if not to control and confuse the market? The VAN interconnect and image files remove the confusion from the claim ‘the advantage of the network is the network itself’; what else is there to the reality of ‘BIG VAN’?

The Synergy

Architecturally speaking, an EDI solution is actually made up of three components (or solution layers, if you’ll pardon the expression) – the transportation, transformation, and integration layers. While EDI is very effective when it leverages a ‘VAN’ connection, the VAN component is only a fraction of EDI, less than 30%.

Think about your VAN connection in the same way you think about how your mobile phone functions.  Your mobile phone functions by combining the services provided by the phone manufacturer, an infrastructure provider, and a telecom company; similarly, EDI functions by leveraging the synergy of these component layers to work as a synchronous whole.

Components of the ‘VAN Solution’

• Transportation. Along with VANs, this layer works using many other methodologies such as AS2, MFTP, FTP, SFTP, and APIs. Most of these methodologies have been around for a couple of decades now. Your VAN, in fact, may still be using FTP to connect you with your VAN mailbox; if it is not leveraging FTP, it is likely using AS2. Get in touch with your EDI team representative and ask, they should be able to tell you.
• Transformation. The transformation layer facilitates translation between different (EDI) formats. Formats like X12, UN/EDIFACT, GS1 XML trade messages, JSON, flat files, text files, or proprietary XML messages are transformed into formats that your ERP systems can easily understand and use.
• Integration. In the final layer, the transformed message is available to be consumed by the ERP. API connectors have been introduced in recent years to connect you with your ERP in a normalized way, much like the ODBC connector you may have used in the past.  The integration layer can be an API or a connector like ODBC or ODATA – the main emphasis here lies in providing (a) the route for landing the messages and (b) feedback that lets you know whether the order was rejected or accepted. The latter is the target, which requires the least manual input.

Do More Connections Provide More Benefits?

The key word is ‘choice’. If one network has the potential to provide a competitive advantage, do multiple networks offer even greater benefit?

The quantity of available networks is only one criteria that determines how effective your network is.  Connecting to multiple VANs is, frankly, a drain on resources, particularly when all VANs make use of the same VAN interconnect. 

While there is a need to be mindful of the connections available to your trading partners, using multiple VAN connections to stay in touch makes no sense at all. It is like having two or more cell phones or cable TV subscriptions, particularly when methodologies like AS2, MFTP, FTP, SFTP, and APIs are available.  Many of these options have low or no cost associated with them while VAN costs are subscription based and incur transaction fees that need to be paid monthly, much like that second cell phone that we referenced earlier.

The AS2 Effect

Application Statement 2 (AS2) is used for a reliable and secure transfer of data over the Internet. It provides a direct, unhindered connection with a trading partner and delivers document receipts and real-time tracking without requiring a VAN or a VAN interconnect. Your standard internet connection serves as the transportation layer; it is payload-agnostic, which means you can use the same tool to transmit images and every business has internet connectivity today. 

Unlike a VAN, AS2 does not typically have monthly charges or transaction fees. It reduces the chances of transaction failure by establishing a one-to-one transmission channel, without the need for a middle man, a VAN interconnect, or a ubiquitous VAN. Also, there is a Message Delivery Notification, but more on the MDN at a later time.

Putting It All Together

Now that we have unpacked the ‘BIG VAN’ claim, we can conclude that your EDI solution should provide more than one communication channel, has to be capable of handling a wide range of EDI formats, and MUST integrate smoothly and automatically with your enterprise systems.

We’ve also come to the conclusion that ‘BIG VAN’ cannot support the features that you need without complicating matters with additional software and subscriptions.

That’s why PartnerLinQ is different. PartnerLinQ is not a VAN; rather, it is a highly scalable, dependable, and configurable EDI and B2B communication solution. PartnerLinQ is ‘integration without complication’ that supports integration with Microsoft Dynamics 365 and other ERP systems. It includes an AS2 solution, FTP, MFT, and SFTP and can connect with any VAN, making it the perfect tool for B2B/B2C communication for your EDI and non-EDI partners.

PartnerLinQ also supports API-based ecommerce platforms like Shopify and Magento out of the box, providing your organization a seamless shift between EDI and API integrations; there’s nothing to add and nothing to buy, it’s all in there.

The solution also operates seamlessly between EDI and non-EDI formats – from X12, UN/EDIFACT, and GS1 XML to non-EDI formats like XML and JSON. While there are too many formats to list in a blog, this is a crucial factor that make PartnerLinQ a perfect choice for your EDI, B2B, and API integration and for smooth communication, while decreasing your reliance on ‘BIG VAN.’

Traditional EDI platforms have multiple limitations. Partner onboarding can be time-consuming and frustrating, and communicating with partners that don’t use EDI requires expensive, difficult-to-maintain customization. Complicated error tracking, poor transaction visibility, and vendor rule management lead to expensive chargebacks that can severely impact your margins.

PartnerLinQ simplifies partner onboarding by supporting business rule-based transactions with businesses with existing EDI setups as well as non-EDI businesses. Its advanced business rule engine and extensive pre-configured business rule library make it easy to configure, save, and reuse business rules for multiple partner organizations and EDI scenarios.

PartnerLinQ can be configured to generate alerts that are triggered when specific conditions are met, and can be used to quickly identify EDI bottlenecks or errors. These notifications are a critical component of PartnerLinQ’s error handling functionality and can help reduce business costs by preventing chargebacks and low transaction throughput.