Food industry supply chain management: moving food of the future
Food industry supply chain management, whether conducted on a local or international scale, is riddled with challenges. The supply chain refers to an end-to-end process – from raw material sourcing to packaging, sale to the customer, and final delivery. It’s easy for these elements to become disjointed. Add to this the burden of shifting regulations and fluctuating consumer expectations and it becomes clear that logistics managers are fighting a war on many fronts.
As a starting point, logistics managers are responsible for systems that achieve high customer value, low cost, and uninterrupted free flow of goods in the realisation of these aims. Smart technologies have the potential to directly address these challenges and guide supply chain management in the food industry into the future. Let’s take a closer look at the challenges in the cold chain (food), find out why preventing interruptions is important, and examine the role that smart technologies play in alleviating issues.
COVID-19’s exposure of food industry supply chain management challenges
Supply chain management challenges in the food industry during COVID underscored the need for smarter processes. From labour disruptions to logistical bottlenecks and managing supply and demand, one of the main roots of the problems experienced during COVID lay with people.
When people and cargo cannot move, so emerges the risk of a standstill. Myriad challenges stem from lockdown scenarios, but one thing is clear: it has forced us to change how we work and how we eat to address all the potential disruption points along the supply chain. Food supply chains require precision and speed in delivering food to market, highlighting the need for smarter, technology-based systems. Now that it seems the worst has passed, the industry’s pivot points may have left a lasting legacy when it comes to streamlined processes, traceability, and supply chain monitoring.
Challenges in food industry supply chain management
Food fraud or economically motivated adulteration is the intentional substitution or dilution of food with cheaper or illicit products. This practice is extremely damaging for brands and has resulted in a break in consumer confidence. It’s also estimated that EMA costs the food industry in the United States $10-15 billion each year.
Smart supply chain technologies like the solutions available from Smarter Technologies Group collect data on even individual products in real time, viewable at any time from a cloud-based remotely accessible dashboard. These solutions can be pre-programmed to send instant alerts around undesirable changes. This minimises the chance of interference and fraud.
Food Industry Regulations
Cold chain regulations change regularly and are relatively complex. Where there is regulation, delays inevitably follow. If you are dealing with global supply chain management in the food industry, this creates additional layers of complexity – especially as there is no global regulator to ensure standardised enforcement. For instance, America’s efforts to prevent food fraud place a heavy burden on logistics – one that has seen a reduction in driver numbers and increased costs.
Again, this is a challenge that stands to be counteracted through smart cold chain logistics from Smarter Technologies Group. These data-driven systems collect and store detailed, accurate data. This makes for simplified administration, effective record-keeping, and reduced risk of human error in ensuring compliance.
Increased risk of food waste and shortages
COVID-19 has also affected demand. This, in turn, has a knock-on effect when it comes to cold chain management in the food chain. While, on the one hand, perishables run the risk of waste, in other parts of the world, the risk of food shortages becomes a reality.
While this is especially the case in third world countries, this does not mean that first world countries are immune to the effects. In the United Kingdom, 30% of the country’s food is sourced from the EU. With more links in the chain, this increases the nation’s vulnerability to disruptions. Additionally, in a post-Brexit Britain, it is anticipated that food prices will increase dramatically.
The negative effects of food waste are multi-faceted. According to the FAO, it is estimated that a quarter of the world’s food is wasted post-harvest – an estimate that does not include food wastage in the retail stage. These figures are at odds with the more than 820 million people who go hungry every year. Food waste, in turn, wastes natural resources and is responsible for significant greenhouse gas emissions and has tremendous social, environmental, and economic consequences.
Smart technologies have the potential to prevent supply chain disruptions and so mitigate the effect of these on food shortages. They also present an opportunity to reduce food waste by reporting on temperature fluctuations in real time, empowering logistics managers to address issues quickly to prevent spoiling, maintain quality, and alleviate the consequences of food waste.
Worries around the movement of safe, healthy foods
The World Bank has said that food insecurity as a result of COVID is attributable to supply chain disruptions rather than actual food shortages. This has exacerbated a pre-existing problem around providing a steady supply of healthy, nutritious food to feed a growing world population.
In addition to food security concerns, food safety has become increasingly important. The cold chain in the food industry requires perishables and foodstuffs to remain at regulated temperatures at every step of the supply chain – and this includes careful monitoring of every step from loading and unloading, packaging and handling to equipment and transport. Interruptions can result in reduced food quality and even contamination.
Consumers are more conscientious than ever when it comes to food safety. One of the requirements in response to this is a policy of transparency, predicated on supply chain visibility. Traceability throughout the entire lifecycle of individual products may sound extreme, but this is precisely what smart technologies are achieving – giving customers insights into the products they buy, their compliance with regulations, and their safety for enhanced consumer confidence.
Few solutions provide visibility like smart technologies. This is a powerful tool in traceability and this system of tags, sensors, and pressure pads monitor the entire lifecycle of goods, across the whole supply chain, for simple, accurate reporting and improved customer experience.
Consumers are also increasingly concerned with the question of sustainability in the food industry. With changing regulations around sustainability and climate change, it is a moral and regulatory imperative for the cold chain in the food industry to go green.
Temperature regulated storage and transportation is a major cause of greenhouse gas emissions. 40% of the world’s food requires refrigeration and it’s been reported that 15% of the world’s fossil fuel energy is used in food transport refrigeration. To keep up with global green trends, the cold chain in the food industry is going to have to make some adjustments to achieve more sustainable standards.
The data insights provided by smart technologies are the foundation of sustainable change. These data readings simplify the process of identifying energy-intensive and wasteful practices and streamlining operations for sustainability.
Increased food prices
Additionally, meeting new protocols comes at an increased cost to suppliers. This, in turn, translates into increased food prices. According to the World Bank, global food prices rose 14% last year. While this has mostly stabilised, some of the poorest countries are still feeling the effects of rising domestic food prices.
This context of elevated food prices takes place against the backdrop of consumer expectations around low cost and quality, as well as high retailer service levels that show low tolerance for inaccuracies and operational disruption. As a result, the food industry is burdened with feeding a growing global population with safe and healthy food with a range of other benchmarks to achieve in an increasingly competitive industry.
This makes an elevated system of control, powered by smart technologies, fundamental to future food industry supply chain management.
Smart solutions for cold chain management in the food industry
According to a report by Bayer, we can expect cold chain management in the food chain to become a data-based operation. Automation, robotics, and the use of data insights to create optimal supply chain models and forecasting have proven to be an effective change during COVID-19. These technologies are here to stay and form the foundation of data-based smart agriculture working together with smart supply chains to meet customer and consumer needs.
Deloitte has also stated that the solution to problems in cold chain management in the food chain may be solved by end-to-end supply chain management, with a focus on digital processes. This has the effect of reducing the reliance on manual labour. It also stands to mitigate bottlenecks through real-time data alerts, as well as long-term fine-tuning of systems around accurate, granular data insights.
Through a smart system of tags, sensors, pressure pads, and gateways, Smarter Technologies Group provides smart solutions to directly meet the challenges of cold chain management in the food chain. Ideal for preserving perishables, these solutions report on undesirable temperature fluctuations in real time. These solutions can be implemented throughout the supply chain for end-to-end visibility of foodstuffs from when they leave the farm to when they end up in your shopping basket.
This is both cost-saving and time-saving, with notable advantages for compliance reporting and improved shelf life of goods.