Challenges and developments in the food and beverage supply chain

Data has become a rare commodity among supply chain managers, as the use of technology to map and monitor the movement of goods has become intrinsic to the optimal functioning of food and beverage companies.

Being able to see the big picture and drill into the finer details of the supply chain has become even more important as major global events such as COVID-19, the war in Ukraine and Brexit create uncertainty and shortages.

Phlo Systems Founder and Managing Director Saurabh Goyal said: “Recent shortages have highlighted the need for future-proof supply chain management systems that replace what has been offered by conventional inventory control processes.

“There is no doubt that companies are now willing to move away from the traditional supply chain management model to increase efficiency and visibility – and we are seeing growing demand for our products that help streamline international trade, finance and customs management, making it easier, faster, cheaper, safer and transparent.

“The ultimate goal of the digital supply chain is, of course, to provide information that leads to improved efficiency, reduced waste and increased revenue. So who wouldn’t want to save money in all areas of their business while reducing their environmental footprint. »

Automation is seen as the natural progression of the digital food chain. Simple mobile apps make the hassle of ordering multiple items and repeat orders a thing of the past – human error on both sides is eliminated, reducing the delivery of wrong products and ultimately reducing food waste.

Automation is key

Alex Kiely, UK Managing Director of delivery platform Choco, said: “Automation is especially important in an industry where suppliers are working 24/7 due to limited manpower, and restaurants are working around the clock to provide the ultimate dining experience to customers. clients.

“The UK has a real appetite for technology. The food industry in particular knows that digitizing their business is no longer an option, and they must act now. »

Managing Director Daniel Khachab said the idea was simple – reducing ordering errors eliminates waste at every stage of the process.

“Reduce ordering errors and eliminate waste at every stage of the process. We estimate that by using the Choco app, restaurants save an average of 1.27 kg per week, reducing their ordering errors and saving up to two hours per week, improving their efficiency in the kitchen.

“By building a powerful ecosystem which we are now extending to the UK market, we will help bring the industry into the 21st century.”

Of course, there are many other ways food is wasted throughout the supply chain. The logistics of getting food to and from different ends of the country require supply chain managers to anticipate the condition of their products along their journey.

Packing and shipping

Until recently, there was no major consideration of how a product would be packaged and shipped. Sturdy packaging protected the products from damage and large amounts of plastic wrap kept them from moving around too much in the back of a truck.

But with the use of carbon and our impact on the environment ever-present in business considerations, it’s no wonder that new bills such as the plastic packaging tax have come into force.

While food safety has always been in question as food companies are forced to remove plastic from packaging – despite all the worry pollution can cause, it’s still one of the best ways to keep food fresh and healthy. protected from contaminants – concerns have now been raised about the stability of these products during transit.

In the beverage industry, the move away from plastic rings for canned beverage packaging has caused significant movement problems in transportation (MIT). Eco-friendly alternatives such as fiber-based secondary packaging fall short in preventing goods from being damaged in transit.

“This has resulted in many pallets of beer being damaged and rejected by customers,​” explained Rick Sellers of Lindum Packaging. “Damaged packs cannot be resold, so they must be discarded or redistributed at great expense to the business. Throwing away large quantities of beer is not just a financial loss: it creates food waste which is a major contributor to carbon emissions.

“Furthermore, all the carbon that goes into making cardboard packaging and aluminum cans and transporting them to the customer is also wasted. This far exceeds the carbon that has been saved by moving away from plastic packaging.

Defects of cardboard sleeves

Working with a large brewery, Lindum found that cardboard sleeves were more susceptible to MIT than plastic rings and that printed cardboard wrappers and cartons were sliding against each other on pallets due to the glossy printing surface. Ultimately, the effects of the switch from plastic to paper on the entire packaging system had not been taken into account, especially in the area of ​​pallet packaging.

Subsequent tests during palletizing revealed that the pallet wrapping machines at the end of each line were not calibrated and were using the wrong stretch wrap. Regular maintenance had also been neglected, adding to stability issues.

Correcting these issues and using a much stiffer plastic stretch film reduced MIT’s problems by 86%, resulting in significant cost savings for the company.

“While it may seem ironic to use plastic stretch wrap to reduce stability issues caused by switching to plastic-free packaging, the lesson should not be lost on any brewer looking to make a similar move,”Vendors added.

“The root cause of most of MIT’s problems could have been avoided with proper testing when the decision to move away from plastic was made. But that’s the problem with the law of unintended consequences, you don’t know what that you don’t know, until you see the effects of a decision.

Nearshoring and diversification of the offer

After such an unprecedented degree of disruption, food and beverage companies need to be aware of the risks to their supply chains if they are to retain customers and revenue.

“A supply chain risk assessment should look at the entire supply chain, from suppliers to customers,”explained Scala Executive Director Dave Howorth. “The goal is to identify critical points of failure or over-reliance on specific vendors, geographies and technologies.

“Each point in the supply chain presents a unique set of risks that makes it vulnerable to disruptions. In the food industry, reliance on a single product supplier puts manufacturers in a difficult position. if that supplier cannot operate. This has been demonstrated by the Ukrainian crisis, as Europe is heavily dependent on wheat from Ukraine and Russia.

To avoid further price hikes and increase availability, Howorth suggested UK manufacturers should start sourcing from multiple suppliers to minimize the risk of disruption, cut costs and make their businesses more responsive to change. of the market.

“Manufacturers can also consider nearshoring, which is moving operations to a different area within the same region to reduce risk in the supply chain,”he continued. “This is a reversal of the recent trend, outsourcing, when operations are often moved to the other side of the globe.

“Operational costs are clearly going to change with nearshoring, and these can be quite complex to understand, but more importantly, it reduces the risk to the supply chain. This is often the answer for companies wishing to reduce their geographical dependence.

“Sourcing ingredients from the UK and neighboring European countries will shorten supply chains, reduce delivery times and minimize stock-outs. As we approach the peak retail quarter, food and beverage companies should learn from their experience of transport delays fueled by Covid-19 and Brexit last Christmas and consider local suppliers where appropriate. is possible.

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