What’s Really Happening in the Food Supply Chain?
Keeping a Close Eye on the Food Supply Chain
The COVID-19 pandemic has tested the entire global food supply chains—from farm to table through transportation to warehousing, store restocking, and last-mile delivery.
Even in “normal” times, quality control problems, or inaccurate demand planning waste about 25% of all food produced. But weeks after companies began scrambling to meet rapidly changing demand, consumers shopping in stores or online for food or beverages are still faced with limited stock, bare aisles, or days of delay for some orders. For their part, reports Freightwaves, despite a 50%-70% downturn in food-service operations, restaurants have been able to maintain delivery services and curbside pickups.
Why food manufacturers and distributors need to keep a close eye on the food supply chain
- Some food supply chains are slowing or stalling. Inventory remains plentiful, but U.S. meat processors are currently slowing or temporarily halting production at some plants as sickness and fear keep workers home, hitting operations that play a critical role in replenishing supermarkets.
- Transportation and supply chain bottlenecks are wasting an enormous amount of product and productivity. Restrictions and lack of supply chain coordination mean wasted food products. The New York Times reports (https://www.nytimes.com/2020/04/11/business/coronavirus-destroying-food.html) that there are thousands of gallons of dumped milk smashed eggs and plowed under or rotting crops. Yet farmers and ranchers may gain relief in the form of a USDA stimulus of their own.
- Trucking capacity is fluctuating wildly. Almost all food and agricultural products move via the road at some point, so it’s essential to keep an eye on changing trucking capacity to ensure better results and compliance. Meanwhile, truckers have lengthy wait times in Europe due to disease-related restrictions. At times, local laws have conflicted with country-wide ordinances that deem hauling food an essential service, leaving supplies stuck in storage. Huge spikes in demand for crucial food products have caused lags for loading at some U.S. warehouses.
- Stores are adjusting hours and policies for worker and customer health. Before the pandemic, line productivity and cost optimization metrics drove packaging, customization, and distribution consumer products. But employee and shopper health and safety are emerging as a new standard for reliable, trustworthy supply chain partners.
These complex problems highlight complicated farm-to-table supply chain dynamics and the need for supply chain transparency. To maintain flexibility in their food and beverage supply chains, engage multiple suppliers and fill orders, food and beverage manufacturers are developing COVID-time supply chain strategies that let them:
- Ensure supply chain visibility. By connecting to suppliers and third-party logistics providers using a network, they can see what is happening in the trading partners’ supply chains and mitigate any issues that might arise.
- Spot quality trends. By systemically aggregating data, food producers can statistically spot supplier trends before they adversely affect finished-good quality, resulting in lower scrap rates and improved product consistency.
- Reduce compliance risk. Manufacturers reduce compliance risk through alerts if suppliers have not met appropriate audit activities and results, ensuring regulatory and industry compliance.
- Create new policies. They can identify broad supplier corrective action trends and update supplier policies to prevent issues from impacting quality and delivery schedules.
- Use a digital supply network. Solutions like Elemica Network ensure product quality by the management of ingredients for consistency and through inventory management. Real-time information allows manufacturers to order what is needed when and eliminate shortfalls or overproduction.
Looking to close the information loop between consumer and producer, producer and distributor, and producer and supplier to increase efficiency? Learn how Elemica Digital Supply Network (DSN) (https://elemica.com/a-backbone-for-a-dynamic-food-beverage-supply-chainfood-beverage-industry/) enables you to follow products through the supply chain, optimize processes, ensure accuracy and consistency, and drive improved finished good quality, lower inventory, and improved market responsiveness.