Years ago, disruptions were considered a common occurrence in the food and beverage supply chain market, changes in customer orders, late arrival of materials and supplies, or even packaging lines that just happened to be out of service for a short period of time. Today, such events are a normal, everyday problem in the food and beverage industry.
Disruptions these days look a little different; pandemics, border closures, weather anomalies, geopolitical issues, clogged distribution channels, labor shortages push supply chains to their limits. These disruptions are pretty rapid and are causing damage in all food and beverage production areas, especially the supply chain. They need to be flexible, resilient, and easily reconfigurable to adapt to changing markets so that products and data keep moving. It is crucial to understand that the physical supply chain and the digital supply chain need to work together. If one wobbles or is out of sync with the other, both fail.
Supply chain management is an integrated philosophy:
High-quality food and beverage products require essential ingredients, so do supply chains. The supply chain must be strategically coordinated and tactically controlled. Supply chain management is an embedded philosophy and thought process, not just a process.
Supply chain management must be shared and interactive across the ecosystem, not just internally within the manufacturing organization. Companies need to add three components to their supply chain management strategy to transform from process to philosophy.
- Collaboration
- Investigation
- Evaluation
These three ingredients have aimed at information. Knowledge is the power to manage your supply chain successfully. In today’s high-tech world, access to information is easier than ever. However, sometimes there is too much information with insufficient time to analyze it all in order to make timely and wise decisions.
Here, these three elements focus on tangible ingredients to keep your supply chain flexible and adaptable to disruptions and changing market trends.
Collaboration:
Communication is critical for making the smooth moving of the supply chain, and here we mean the reciprocal supply chain of products and information. Communication and collaboration do not only mean within the walls of a company or organization. Today’s marketplace requires full collaboration between trading partners and all organizations that influence your business. Suppliers, external logistics service providers, contract manufacturers, shippers and shipping agents and of course, your customers. What about your customers? Why keep a secret? Each of these units has a significant impact not only on the performance of your supply chain but also on your business. Don’t you want to work with everyone often? Think about the data that can be collected and, most importantly, the information and choices that can be made from this collaboration. Collaboration is key to acquiring this knowledge and thereby gaining the power to build adaptive supply chains.
Investigation:
As mentioned earlier, there is huge data available today to help companies manage their supply chains and collaborate internally and externally with trading partners such as suppliers and customers. Research is the second ingredient needed to help supply chains adapt to a disruptive market. An investigation is an interesting word. Your data must be real, accurate, reliable and most importantly, up-to-date. Years ago, there was an old saying in the news business: “If I have to wait until the end of the day to get information, I can wait a lifetime.” It can also be used in food and beverage production.
In the same way we believe that it is critical and crucial for something which Infact needs to be done in best possible way.
Reliable, accurate and up-to-date data enables you to make smarter and faster business decisions. Today’s technology-rich world provides us with things like Industry 4.0, Internet of Things (IoT), Artificial Intelligence (AI), and EDI, some of which organizations can use to access and transfer information. This expert data will enable companies to communicate and interact better than ever before to order ingredients, build products, and get them where they need to go. To do this successfully, your data must be real, as it says. Providing processes and systems to quickly sort and analyze all available data to determine which information is important and applicable to a given scenario will ultimately keep the supply chain moving. An investigation is an important part.
Evaluation:
As the data is available in bulk, more than what can be processed manually. Supply chain data in food and beverage production are no different. In the business world, the data challenge is bigger; not all data is structured, and much is unstructured, not all data is relevant and not all data is of quality. The data changes in real-time, and the volume continues to grow. This massive amount of data provides an opportunity for manufacturers to learn from this data. We repeat it again, and knowledge is power. To make better use of this data, evaluation is a key component to ensure that the best information is available for informed decision making. Quality assurance in the supply chain of any industry is very crucial.
To make the evaluation process effective, a number of technologies can be used to complete the task. Next-generation supply chain analytics, IoT and AI enable companies to transform their business models with connected solutions. To achieve agility in the supply chain, you need the ability to find, analyze, and execute the best business solutions, regardless of the source of supply and demand. To achieve this company-wide goal, you need end-to-end transparency. This requires accurate data and appropriate tools to evaluate these data. Speed and agility in data evaluation are as important as speed and agility in the actual supply chain.
Synchronization of physical and digital supply chains:
Without information, it isn’t easy to make decisions. Without accurate and timely information, it is even more difficult to make good decisions. When discussing supply chain dysfunctions and missed opportunities, a common saying in this industry is “delayed days and short dollars.” This means that if you can’t make a quick and accurate decision, something is wrong. Moving products through the supply chain can only happen if the physical and digital supply chains are in sync and their managers are informed and can work with all parties, explore opportunities and evaluate all possible solutions in the supply chain. This results in a flexible and agile supply chain that can withstand today’s food and beverage market pressures.
The global food supply chain is indeed one of the most complicated but, at the same time, the most important logistics programs that our world needs for sustainability. While we accept that the food supply chain is fine-grained and non-perishable – like any process – it is constantly evolving and facing many challenges. With advances in technology and the increasing need for safe and fresh food, our ability to understand unique barriers and find effective solutions may be the only way to keep our food supplies fresh and safe.
The following are five challenges facing food supply chains today and those that will be faced in the future:
Growing demand for traceability in grocery deliveries:
There was a time when shipping tracking was a luxury feature that very few customers were willing to pay for. The days passed quickly. Today’s food senders and recipients need traceability that not only meets evolving food safety standards but also increases the need to reassure their consumers. Many consumer advice centers report that food shoppers are becoming increasingly aware of the dangers of food contamination along the food supply chain.
According to WHO and several food safety experts, most foodborne illnesses begin or spread within the food supply chain. The requirement of retailers and suppliers to document the who, what, where, and when of every element of the food supply chain, not just the safety of consumer and brand protection – but also for legal reasons, drives the growing need for more accurate tracking standards.
Poor communication between partners in the food supply chain:
Although technology has improved communication channels and skills in recent years, gaps remain in the food supply chain. Various participants are directly involved in the entire supply chain. With so many people, companies, and everyone with unique modes of transportation and communication, there are times when things fall apart. There are cases where different people in the supply chain of the same goods never interact with each other. This can cause many obstacles, including the slow movement of goods, bacterial growth, food poisoning, or spoilage.
To mitigate the potentially dangerous problem, the focus should be on improving communication processes in the food supply chain.
Potential food scam:
When one thinks of food fraud, one often thinks of the two-word phrase – organized crime. Frankly, the concept of The Godfather of the Corleone Olive Oil Company is more realistic than many beliefs. There have been cases of organizations producing and shipping counterfeit food or using food deliveries to transport other illegal products. While this is a major problem in Europe, it affects global food supply chains. The FDA recently expanded its Food Defense division, which specializes in investigating food fraud among mainland importers. As the potential for food fraud increases, so do regulations, which tends to create more bottlenecks in the supply chain.
Lack of transparency and honesty:
Honesty and transparency in logistics is strength. These problems plagued shipping from the start. However, if concealment of facts leads to food poisoning and fatal danger, we must stop it. Several actors in the food supply chain have enabled continuous communication protocols that document a number of key components of food safety, including the location of cargo containers, indoor temperatures, humidity readings, and regular food checkpoints. In some cases, photo and video documentation are used as evidence for inspection and reporting.
Growing Regulations:
It is often assumed that precautions are taken in the supply chain to protect people. However, sometimes they make things worse. One of the regulations recently passed in the United States is the Electronic Logging Device (ELD) Mandate. This regulation requires the carrier to install an electronic registration device to record the driver’s working hours every day. While complying with the federal driving safety standards, ELD mandates force others to reduce their driving hours significantly. In some cases, purchasing cost, integration, and deployment of an ELD system cause smaller carriers to stop.
The effect of the ELD mandate has resulted in a significant increase in delivery rates, fewer available drivers, and delays in the delivery of goods, including fresh and perishable food. While the current struggle with the ELD mandate is likely to end soon, increased regulation will negatively impact the food supply chain.
While the challenges discussed above seem overwhelming, they also offer several opportunities to solve problems rather than just record problems. Specialists and freight forwarders, manufacturers, and suppliers who address challenges in the food supply chain can achieve their goals primarily through open communication and transparency.
What is the future of food and beverage supply chain operations after the COVID-19 pandemic?
COVID-19 has affected food and beverage supply chain operations around the world, changing the way companies plan.
The sudden expansion in the eCommerce industry due to COVID-19 has resulted in a major shift in consumer demand. Social distancing laws and general health practices have resulted in consumers shopping online. Online grocery sales set another record in May, increasing 24 percent over April sales, to reach $6.6 billion, according to the Brick Meets Click/Mercatus Grocery Survey fielded May 20-22. The survey is part of Brick Meets Click’s monthly monitoring of COVID-19’s impact on consumer behavior. It is the third wave of research focused on identifying insights and implications for retailers and brands.
The growth of e-commerce means that supply chains in the food industry must adapt to stay ahead. Business is shifting directly to consumers, and this will make last-mile delivery more difficult.
In addition, consumers expect full transparency and real-time feedback during the food and beverage transportation process. Consumers are increasingly concerned about food supplies, and there is a growing desire for fewer stops from producer to consumer. Improved supply chain visibility and logs to improve customer relationships will be invaluable.
With millions pouring into online groceries, supplies are sure to grow. As supply chains are stretched to accommodate this growth, reducing costs is critical to a successful system. Optimizing fleet routes is not only an advantage but also a necessity. The fastest and most efficient transportation of products lowers costs, increases productivity, and ensures customer satisfaction.
In addition to the route and transportation optimization is very important to increase the number of goods shipped. A fleet of load-optimized vehicles moves more products for fewer trips. In addition to higher revenues, an optimized fleet will have a less environmental impact, which is recognized consistently as a priority for consumers and businesses in the marketplace.
E-commerce also offers markets the opportunity to saturate themselves with competitors’ goods. Consumers will be less loyal to brands, and small businesses will thrive or choke on predatory prices. This growing and dynamic market is an opportunity for supply chain management companies equipped with the tools and technology to differentiate themselves from the competition.
Katalyst developing solutions for today, tomorrow, and the future:
With elements like multi-channel execution strategy, technology, data, analytics, automation, and near-source infrastructure your supply chain can be disruptive, adaptable, and delivers products to the assembly line faster and when needed. These elements strategically map warehouses and distribution centers for storage and eliminates risk throughout the supply chain. It stimulates accurate, efficient, and accelerated execution.
This sustainable supply chain connects all parties involved – from suppliers to consumers. They can see products moving along the supply chain, fleets can maximize uptime, and consumers can better predict the delivery of their purchased products. Companies can comply with sustainability rules, digitize records and make better estimates.
Innovation creates sustainable operations that are ready to tackle the next pandemic or consumer shift.
At Katalyst, the depth and breadth of our end-to-end supply chain solutions enables companies to address disruptions that cause operations and build flexible and efficient operations.
Contact us today!
