How Food and Beverage Companies Can Overcome Supply Chain Disruptions
The food and beverage industry faces many challenges. Responding quickly to fast-changing consumer demands, increasing requirements for food safety and regulatory compliance and improving productivity while increasing product quality are just some of the obstacles for the industry to overcome. In 2020, a light was shone on the weakest and strongest areas of supply chain management. Overcoming and adapting to challenges of disruption is still a priority today to ensure ingredients and products are delivered on time and in the right condition.
Adapting to a Changing Landscape
The requirement to comply with new standards and regulations includes the need for businesses to adapt to changing consumer demands. They must also meet expectations regarding product integrity and sustainability, or they risk falling behind the competition.
Fabien Bergeron, Key Account Manager at Global Trade Magazine, highlights some of the key issues Food and Beverage Companies are facing, and the solutions needed to navigate beyond 2021:
- "A higher volume of direct-to-consumer (DTC) transactions. With more consumers shopping from home, setting up and fulfilling these distribution networks have become full-time jobs for food and foodservice organizations.
- Disruption in end-to-end supply chain continuity has increased the global price of food and beverage products and made the global food supply more inaccessible.
- Disruption of the transportation networks needed to be able to deliver these DTC orders (e.g., truck driver shortages, ocean container shortages, transportation capacity constraints, etc.).
- Workforce presence, composition, and location. Despite the current economic situation, available labor is still difficult to find in certain areas.
- Reductions in passenger air travel have impacted air freight considerably, the method by which most perishable products are transported. (According to DHL, air freight capacity declined over 80% on routes between Europe and Latin America in 2020.)
- Raw material and component inventory shortages affecting production.
- Inventory shortages that impact manufacturing and distribution companies’ sales".
Bergeron goes on to explain the three steps that all food and beverage companies can take now to make their supply chains more resilient and responsible. Some of the proactive measures to take include:
1. Focus on go-to-market versatility
2. Step up end-to-end supply chain management
3. Leverage technology ecosystems
Implementing forward thinking solutions has never been more important. Industry 4.0 technology capabilities boost the ability to meet productivity requirements and enhance efficiency of resources, in addition to supporting quality processes.
Flexibility of future-proof systems can support and grow with the needs of the business. For continued operation, continuity and performance to meet compliance with food and drink legislation, retailer requirements and consumer demands.
Read more about this topic: What’s Keeping Food and Beverage Companies Up at Night in 2021? - Global Trade Magazine