How Food Supply Chains Can Rebound from 2020

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When it comes to revitalizing America’s food supply chains, it takes the expertise of a true renaissance manager. 

The year 2020 exposed a number of issues with America’s food supply chains, prompting strong responses from the Biden Administration and U.S. Department of Agriculture. While technology has been used in supply chains for years, it is only being utilized by 41% of organizations for supply chain mapping. In other words, there’s room for improvement.

GS1 US and other industry standards are helping to modernize supply chains, but the changes are slow and hard to implement. The problem with this implementation stems from the fact that many supply chains have pre-existing systems that can’t easily be adapted.

When it comes to building strong and more resilient food supply chains, there are three areas for improvement: digitization, adaptability and flexibility.

Digitalization

Seventy-nine percent of supply chain leaders believe an internet or platform-based approach is critical, but which platform will they choose? Will it adapt to current models and play nice with other platforms? 

Device integration allows supply chain transactions to be recorded and tracked. Consider the role of a single truck in a supply chain. With a connected data marketplace, it becomes possible to monitor when a truck picks up apples from a supplier, how it’s being impacted by traffic through cities and across state lines, and when it’s expected to arrive. The related data points can be as detailed as you can imagine.

When the truck is nearing its destination, supply chain mapping can tell those on the receiving end when to reserve a loading dock, and how many apples should be delivered to which store.

In the case of food shipments, the old adage that one bad apple spoils the bunch is literally true, due to parasites. Digital tracking tools can show where and when that bad apple originated, notify suppliers and buyers if a recall is necessary, and break it down to one small unit, saving the rest of the apples for the shelves. This is a prime example of how digitization creates visibility and traceability in the marketplace.

Adaptability

The year 2018 saw a massive recall of all romaine lettuce in the U.S., taking it off the market completely for around three months. At the time, food supply chains had a lot less visibility than now, and the food industry’s planning and response were lacking.

The ability to adapt to changes in a supply chain is essential. Challenges can come in the form of low fuel supplies, lack of workers to harvest produce, product shortages (like our current pork shortage), or extreme drought.

Technology enables supply chain managers to run scenarios ranging from worst-case to the most common, and allows them to plan accordingly. COVID-19 turned out to be a bigger challenge than we ever imagined. Companies like Walmart and Amazon.com had to quickly automate and adapt. Fortunately, many had already made investments in integration and device technology.

Flexibility 

A recent report from McKinsey & Company noted that 61% of supply chain leaders are anticipating a decline in globalization and offshore manufacturing. For the food industry, this means supply chains that will be more domestic, yet they’ll still need to be robust.

The U.S., with its size and variety of climates, is fortunate in that it can produce a high volume of domestic products. However, as populations grow and land use for agriculture declines, the nation finds itself contending with issues such as climate change that will drastically change which foods can be grown within its borders. These are factors that business leaders need to consider when thinking about food supply chains.

Another benefit of technology when it comes to flexibility is the use of aggregate data to manage and respond to supply and demand issues. Visibility in supply chains can reveal which areas are in need of critical supplies, and which have excess.

Essentials like bottled water and toilet paper couldn’t be kept on shelves during the pandemic. Part of the problem came down to supply chain logistics, with suppliers and plants struggling to manufacture essential items, and part from companies not being able to monitor and manage distribution correctly.

If retailers were able to ensure a slow and steady distribution of resources, the general public would be less likely to impulse buy and hoard products needed by the whole of their communities.

Technology won’t be the savior of food supply chains, but it’s a means to that end if applied properly. Governments and industries can push for standards, but if we haven’t planned on how to implement them, it’s just lip service.

Jim Mason is a blockchain practice leader at Farm to Plate.

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