Dive Brief:

• Kraft Heinz will use Microsoft products including Azure to better address supply chain disruptions, the company announced last week.
• The companies will create a "Supply Chain Control Tower" to serve as air traffic control, as well as build digital twins of 34 Kraft Heinz manufacturing facilities in North America to test processes virtually before applying them on the plant floor.
• This move comes after Kraft Heinz announced the next phase of its transformation plans was to "augment our agile expertise and capabilities through partnerships with technology giants and cutting-edge innovators," CEO Miguel Patricio said at the 2022 Consumer Analyst Group of New York (CAGNY) Conference in February.

Dive Insight:

The pandemic has prompted companies to reexamine their supply chains, with some focusing on data-driven technology innovation. Part of Kraft Heinz's Agile@Scale transformation is to build a leading tech ecosystem.

"The past two years have highlighted the urgent need for digital-first supply chain solutions across every industry," Judson Althoff, EVP and chief commercial officer at Microsoft, said in a statement.

The collaboration with Microsoft has been in development for quite some time and "the pandemic has only accelerated our plans," Kraft Heinz said to Supply Chain Dive in an email.

Using Microsoft's machine learning and analytics will help "drive innovation and efficiencies across the supply chain so we can get products into the market faster," Carlos Abrams-Rivera, North America EVP and president at Kraft Heinz, said in a statement.

The food company will migrate its ERP software to SAP on Azure. ERP transitions can go wrong, as seen with Mission Produce. The avocado supplier had issues implementing its new ERP system, which led to a lack of visibility into its on-hand inventory.

Kraft Heinz said, "We are well-prepared for the transition to Microsoft Azure." The food company said over the last two years it has continued to build the Kraft Heinz team, hiring cloud and data engineers, full stack and UI/UX developers, and more.

In addition, both companies are working on creating a joint "Digital Innovation Office" to co-engineer solutions that will help Kraft Heinz redefine its digital manufacturing, according to the announcement.

For example, the company will use actionable insights to shorten the development cycle for new products or help customers better meet consumer demand by using insights that could help with increased sales/velocity, said Kraft Heinz.

A pilot program will begin immediately, with a focus on tech-driven solutions to be created with consumers and customers in mind, Kraft Heinz said.

Microsoft has previously landed partnerships with major corporations to provide data-driven solutions. Earlier this year, FedEx announced it would extend its partnership with Microsoft and offer "logistics as a service." In 2020, C.H. Robinson partnered with Microsoft to provide increased inventory visibility for shippers.

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