The supply chain in the food industry refers to the various processes that explain the chain of ‘from farm to table.’ The processes include production, processing, distribution, consumption, as well as disposal. The food reaches you through a supply chain, with systemic movement, from producers to consumers.
The ‘domino-like’ movement of the supply chain implies one affected part of the food supply chain affects the entire chain. This is usually seen in the variations in price – one of the major challenges the supply chain of the food processing industry face.
According to the Ministry of Food Processing Industries, while the Indian food industry is considered a sunrise sector owing to its huge growth potential along with socio-economic impact, the structure of the industry is not promising. With the organized sector and small-scale industries taking up 25% and 33% shares respectively, the unorganized sector at 42% paints a bleak picture.
Top it up with the problems adding to the woes include –
Challenges galore, ranging from volatile pricing of commodities to inventory management to quality as well as safety requirements, the supply chain management also deals with regular introductions of new products, the uncertainty of high demands and manufacturing constraints that are highly complex, including food perishability factor.
With steady growth in customers’ demands, ever-expanding product portfolios, and supply chains that are growing in length, there is an ardent need for inventory optimization.
Reason: Inefficient inventory management leads to product spoilage
Results include:
The influence of the global pandemic on the food supply chain was seen in two features – supply of the food and the demand for food, as cited by the Food and Agriculture Organization (FAO).
With the food security at risk, the impact of the pandemic became a barrier in the food supply chain owing to reasons like –
As per Italy’s Agricultural Research and Economic Council report, the consumption of fruits went up by 29%, for the consumption of vegetables increased by 33%, and legumes and oil witnessed an increase in consumption by 26.5% and 21.5% respectively. The consumption increased during the quarantine period.
With the pandemic affecting the supply chain in the food processing industry, here’s a quick look at the five big problems that the food supply chain management face along with how to fix those problems.
Before you identify and address the five big problems, it is important to know the six stages of a supply chain –
These steps must be followed in order. With any one of these stages skipped can have disastrous results on the supply chain. With the six stages of the food supply chain clear, some of the common issues supply chain managers face and how to overcome them.
Traceability (the ability to keep a track of the food product at various stages of the supply chain) is not just customers’ requests anymore. In fact, more and more customers demand to know the origin of each food product including the ingredients that go into that food. Traceability of the food product
On the contrary, a dearth of traceability can lead to blind spots in the supply chain thus increasing the chances of unrequired risk. It can also have a waning effect on consumers’ trust in a brand. Implying reduced sales and profits.
Solution: QodeNext offers a single point of contact for all your traceability needs and enables you to integrate their supply chains and facilitate connectivity and visibility from start to end
Substandard storage and warehousing practices; transportation delays, and inclement weather are some of the common issues affecting food products’ quality as well as safety.
One of the reasons there has been a rise in food recall practices. Product recall is not only an expensive activity but also can cause irreversible damage to your brand.
Solution: Best raw materials selection is the first step toward the manufacturing of safe as well as high-quality products. Followed by choosing the correct packaging material, as packaging plays a crucial role to keep the food fresh as well as safe.
Little to no communication between the involved parties can impact the food supply chain majorly. Lack of communication results in wastage, and inefficiency, as well as can also create mistrust between the parties.
Solution: With the latest technologies in place lack of communication should not pose a problem. It is also important to keep the channels of communication open with the suppliers.
A food supply chain comes with a variety of costs including fuel and energy costs, freight and logistics, manpower or labor, and investment in new technologies. While all these costs are important, the challenge is to keep a constant check on them.
Solution: One-time investment in an expensive yet latest technology will help you save a lot in the long run.
Inventory is another challenge for most supply chain managers. To manage all the above-mentioned issues, it is important to manage the inventory, increase efficiency, and reduce errors.
Solution: Investing in inventory management solutions will ease lots of problems and will help manage the inventory properly as well.
Lack of traceability in the food supply chain can lead to disastrous results, but with QodeNext, your requirements are mapped. Connect with us to know how to achieve greater visibility and response agility in a supply chain in case of food safety challenges.
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