Supply chain innovation and excellence
Akash Bedi, Chief Strategy and Operations Officer
Over the past few years, H&H Group’s approach to supply chain has evolved. Core to this shift is the way we approach our supply chain and our mindset that it is no longer just about manufacturing and distribution, but processes and relationships that drive product development from concept to end-of-life. Importantly, this posture allows us to operate more in line with our values, our customers and our consumers.
Supply chain excellence is of particular importance to H&H Group due to our brand heritage and global reach. We have strong expertise across a portfolio of brands that cater to needs within the markets in which we are present. Our large number of products and our desire to seek quality ingredients wherever they may be, means that we have extensive supply chain networks across the world.
Within this transformative change, we have identified four key areas of our Supply and Operations in which we can better leverage innovation and ensure best practice:
Historically, innovation has been synonymous with product development. While our approach to innovation goes beyond launching new products and ranges, our product development processes and how we deliver our products are highly important, and something we review regularly.
We are evolving our Stage-Gate model so that our processes better enable speed, timely decisions, alignment from key internal stakeholders (often located across the world) and consider other important factors such as sustainability. Having this process set up in the right way drives innovation through our product development phase.
We particularly pride ourselves on our nimble approach to development. Concept to launch can be as little as 13 weeks, through collaboration with raw material suppliers and contract manufacturers, as well as our science and packaging teams, ensuring we are more readily able to meet the needs of consumers in a fast-evolving world.
Our strategic partnerships have been one of our key success factors in mitigating supply chain risks and challenges we have faced over the years. This has proved to be particularly important during the current rapidly-changing global landscape under COVID-19.
Partnerships provide greater security and visibility, which in turn enables collaborative problem-solving and opportunities for the business to drive innovation.
In particular, our primary partnerships in our supply chain and with our contract manufacturers are imperative to so much of our business – from innovation and science, through to delivering premium and proven products, as well as gaining a competitive advantage and reducing risk and problem solving in times like this. It’s about collaborating to create a business that we can sustain and grow into the future, so that we all benefit.
NewH2, our innovation fund, is investing in products and emerging technologies to create the building blocks of wellness for the future. The fund provides the overall H&H Group with a complementary alternative to Research & Development and Mergers & Acquisitions, by expanding the Group’s innovation opportunities and allowing it to keep abreast of new, potentially disruptive products, science, trends and technologies.
Science and Innovation are a big part of our philosophy and are central to our growth as a global leader. In fact, we consider research to be the key to unlocking the secrets of wellness.
Research also supports our PPAE model – premium, proven, aspirational and engaging - where “proven” encapsulates how our ingredients and formulations are backed by science.
In 2019, our investment in Research & Development (R&D) increased circa 6% for our major H&H Group R&D Centres, which are located in Switzerland, Ireland, China and France. We also collaborate with world-leading experts to strengthen our capability such as universities and institutes.
Our Biostime Institute of Nutrition & Care (BINC) – based in Switzerland and China – is our non-profit research arm, working with talented scientists and researchers through a grants program. Over the last year BINC continued to invest in research across the microbiota, infant brain development, child nutrition and obesity, allergy and women’s health around pregnancy. In terms of our supply chain, BINC plays an important role in supporting research that can lead to breakthrough discoveries in infant and maternal health solutions.
One of the biggest areas of supply chain management at the moment is a focus on sustainability, a key driver for innovation.
What an organisation chooses to do in the area of sustainability has impacts that reverberate far wider – not just on the environment and society, but also on its own workforce, productivity and profitability, and its reputation. H&H Group consumers are a highly connected and informed cohort for whom sustainability is more than just an aspiration. They have an expectation that the organisations they engage with are leaders in sustainability, therefore we recognise that delivering on our sustainability goals is not just important from an ethical perspective, it is also key to our brand success.
The knowledge we are gathering and the need to impact more positively is becoming integrated in our daily thinking, via our Sustainability Strategy that focuses on three main areas: the story of good health; our footprint on the planet; and honouring human rights and fairness.
It is evident that there are huge opportunities for supply chain innovation under the lens of sustainability and these three pillars. We own our commitment to have all packaging recyclable, compostable or biodegradable by 2023. Some H&H Group ranges are already available in bioplastic and, with our research partner CSIRO, we are exploring further new recyclable packaging options, as we work towards global alignment on a Group Packaging Strategy.
To further mitigate unnecessary waste, we are creating some products with ingredients sourced from waste streams, and we have research arrangements with CSIRO in Australia to explore new extraction technologies to derive nutrients from waste food. Examples of current waste stream ingredients that we use are grape seed sourced from local wineries and apple cider vinegar from apples rejected by retailers. We are continuing to search for ingredients that are not only drawn from nature, but enhance the biodiversity of the ecosystems we draw from and have other important impacts, like increasing soil health, natural irrigation or sequestering carbon emissions, to protect life on earth.
While the four areas above are core to our ongoing strategy, they must now be considered in the context of being managed through the current global pandemic. We have worked hard to ensure largely normal operations and the ability to overcome temporary disruptions, while implementing appropriate safety measures to protect team members. It is hard to pinpoint precisely the long-term effects COVID will have on the world – although unquestionably they will be immense, permanent and far reaching. However, one thing we do know is that the need to adapt has never been greater than in current times, and our ability to do this comes from having both stable core structures and strategies, and agile and innovative thinking.
The full presentation was delivered at the 14th International Conference on Operations and Supply Chain Management (ICOSCM) and the 3rd Strategic Supply Chain Thought Leaders Forum, July 2020.