The supply chain is a source of competitive advantage in many industries. Foodservices giant Sysco, the largest global player, U.S. market leader and a Fortune 100 company, is building and refining its technology to optimize and grow with significant engineering support from its Sri Lanka-based team
In this interview, Senior Director – Delivery of Sysco LABS, Asanga Nugawela discusses how the Sri Lankan teams are helping build one of the most advanced supply chain technology solutions that offer efficiency and transparency across the foodservice value chain, from farms all the way to restaurant tables.
Sysco is a U.S based food services company. Can you explain to us what Sysco LABS is?
Sysco is the largest food services company in the world, catering to all customers who prepare meals away from home. Sysco operates in a different segment compared to other retail giants – selling, marketing, and distributing food products to restaurants, healthcare, educational facilities, hotels and to other customers who prepare meals away from home.
As a captive technology centre for Sysco, Sysco LABS is dedicated to meeting its parent Sysco’s technological needs. Sysco has been leveraging technology to drive its operations from its inception. However, the rapid advancements in technology have necessitated continuous digital transformation to stay ahead of the competition.
This is where Sysco LABS comes in. Our primary focus is to facilitate the digital transformation of Sysco, including application modernization and development. As a result, a substantial presence of software engineers, quality engineers, and product managers is maintained in-house to support key internally built applications.
How does Sysco LABS in Sri Lanka contribute to the improvement and optimization of the company’s supply chain?
The supply chain and how it is managed has evolved over the years. Traditionally, it was viewed as a linear process where a step followed the one before it. However, this approach lacked transparency and real-time information. In a traditional supply chain, if you are at the last step, you will not have visibility into the first step.
Supply chain 4.0 is intelligent, connects all activity and enables transparency and information availability across the entire chain. This is largely possible due to advancements in technology. As a result, modern supply chain information is no longer linear, but radial. By that, I mean that all information is accessible from any point in the chain.
In the U.S. Sysco is an intermediary between food producers, farmers, and the hundreds of thousands of businesses that require fresh produce. What about connecting these is challenging?
Food is perishable, so timing is everything when you consider its supply chain. Responsiveness is a critical aspect of our supply chain. When a restaurant places an order, it cannot wait a week for delivery.
In supply chains, the biggest expense outside of the cost of goods is transportation, fuel and the time spent on the road. One of the main applications of technology is to optimize transportation costs by optimizing routes and loads. Our teams work on ways to optimize these different aspects of the supply chain and to also better integrate new systems entering the network. Sysco has a history of growth by acquisition, so there are instances where these additions come with operations and systems different to existing Sysco ones. Sometimes these different units behave as independent entities. If a supplier had an agreement with one unit, they continue to deal with that one unit even when another site is closer. Now we are overcoming those barriers by providing a customer in a particular region access to a single online cohesive unit even when the goods are located at several sites. Our teams are working to make that happen.
What is supply chain 4.0?
Supply chain 4.0 isn’t a new concept. It addresses a connected and smarter supply chain system where information is readily available to everybody, and decisions are based on data.
For instance, we have algorithms that forecast demand replenishments and transport efficiency to enable the supply chain to be optimized by anticipating events. Our team in Sri Lanka plays a vital role in developing, modifying, enhancing, and modernizing various aspects of Sysco’s supply chain, building an integrated ecosystem aligned with the principles of Supply Chain 4.0. Every ERP system is equipped with a warehouse management module, ensuring efficient management of warehouse operations. However, those applications are not easily scalable and adaptable for a company of Sysco’s scale. As a result, Sysco must build proprietary systems and these systems are now a competitive advantage.
What does it mean for Sri Lankan teams to be building these leading-edge technology products?
Foodservices is a trillion-dollar industry and Sysco is the largest global player in this space. Delivering the technology that powers its supply chain means that Sri Lankan engineers are impacting lives in different parts of the world.
For most businesses, managing the supply chain efficiently extends a competitive advantage. However, managing a foodservices supply chain is quite different to one by a third-party logistics company – simply because we are dealing with an added layer of complexity which is the perishable nature of the goods we transport.
Food is essential for the sustenance and progress of humankind, so I think it’s a matter of great pride for us to be able to contribute to and shape one of the most important industries in the world.