How the Food Supply Chain is Struggling, And How Best to Navigate It
Disruptive events like the pandemic, war, extremem weather, shifts in consumer demand, and shipping delays continue to create bottlenecks in the global food supply chain.
It’s becoming more and more difficult to produce quality food at competitive costs while maintaining a healthy profit margin. Worse yet, if these trends spiral into something worse, we run the risk of facing food shortages on a global scale. Here’s how industry leaders are navigating these challenges.
Challenges to stay ahead of
Food safety
In recent years, food fraud—the deliberate alteration, misrepresentation, mislabelling, substitution, or tampering of food products for economic gains—has become a growing concern for consumers. Consumers worry not only about the quality of the food they are purchasing but also about the consequences this may have on their health.
In response to growing concerns, many agencies such as the Rapid Alert System for Fraud and Feed (RASFF) and the EU Food Fraud Network have put in place regulations to mitigate the risks of food fraud. One of these regulations calls for increased transparency and traceability, a regulatory measure that is also a response to growing concerns about foodborne illness.
Improving supply chain visibility helps identify vulnerabilities in suppliers and makes it possible to trace problem goods back to their source. These regulatory measures suggest that sharing metrics can significantly reduce risks to consumer health.
However, the problem arises when companies use outdated systems to manage MRO materials needed for food production lines. Not only are these systems slow but they’re also prone to human error. Difficulty in tracing data leads to unreliable results which can be a logistical and public health nightmare when inadequate maintenance results in food safety concerns.
Lack of insight
Many businesses continue to use legacy systems to manage their supply chain operations, including maintenance, repair, and operations (MRO). Not only are these infrastructures poorly equipped to adapt to dynamic markets but they also can’t offer valuable insight for what critical parts are needed.
For instance, the Covid-19 pandemic led to a significant surge in e-commerce and consumer demand. The unforeseen pressure that panic purchasing put on manufacturing and distribution facilities was unprecendented. Any downtime could prove detrimental to meeting essential needs.
The surge of demand added strain to outdated systems, further widening a gap in communication between manufacturers and stakeholders. It led to shipping delays, an inability to meet food safety needs, and challenges related to proper maintenance.
The use of an intelligent system can not only crunch large datasets at ease, but also yields valuable insights to a high degree of accuracy. This ultimately leads to informed business decisions that are based on numbers and performance, rather than relying on historical patterns that may have evolved.
Analytics is no longer a nice to have feature; it is a necessity for businesses hoping to survive a dynamic and uncertain market.
Eliminating waste
Food waste not only affects your potential for a higher bottom line but it also has been shown to harm the environment.
According to the United States Department of Agriculture Economic Research Service, 40% of the entire US food supply is wasted as it passes along the supply chain, often resulting from:
- Poor storage
- Inadequate packaging and care during transportation
- Large orders that are unnecessary
- Production downtime
- Costly recalls
Leveraging the power of advanced technology to minimize downtime and safety concerns can help prevent or stop food waste in its tracks.
How to tackle food supply chain challenges
Increase production visibility
Leveraging new tools to manage your supply chain offers the opportunity for organization-wide insight rather than fragmented partial views. The right material management software should harmonize data across your operation, starting with production. It should bridge gaps in communication between maintenance, production, packing, storage, and logistics. All of this information should be housed in one place so you can make smart decisions that make your supply chain more resilient.
Not only does this help eliminate food fraud, but real-time tracking also helps increase the longevity of food products because they’re maintained at optimal conditions. This methodology maximizes food freshness while minimizing food waste.
Eliminate guesswork
Harnessing the power of artificial intelligence and machine learning will open the doors to endless opportunities for optimization. Smart analytics and powerful algorithms can help you make accurate predictions that are backed by real data instead of relying on estimated guesswork.
Digital tracking coupled with predictive analysis can ease production delays, too. By combining historical data with emerging patterns in shipping delays, a smart system will recommend when and where to reallocate inventory to help avoid downtime. And, because procurement contracts and purchasing histories are housed in an easy-to-access location, you can guarantee that each of your operations is using a contract holder you’ve deemed reliable and compliant.
This is a huge gain in food safety because production downtimes that halt supply chain operations pose a serious threat to the lifespan of certain food products. It hurts not only your consumer but your net profit, too.
Keep your operation healthy by feeding it the right information
The global food supply chain is threatened by a multifaceted problem that requires a dynamic, robust solution.
The right tools can not only streamline the entire process but can also aid in the collection, harmonization, and interpretation of meaningful data. Leveraging artificial intelligence and machine learning can help build a resilient supply chain capable of being flexible enough to adapt to a dynamic market and navigate through any disruptions that come along the way.