Five Issues in the Food Supply Chain and How to Address Them

Under the demand for enjoying various, fresh foods at any time of the year, the food supply chain has had to expand geographically and involve more suppliers. This has made supply chain management in the food industry more cumbersome and complex than ever.

Producers, distributors, and logistics service providers face significant pressure to bring food products to market quickly, safely, and in the best possible condition.

A typical food supply chain includes six stages:

• Sourcing raw materials

• Production
  

• Processing and packaging
  

• Storage
  

• Wholesale distribution
  

• Retail distribution
  

If any one of these stages encounters an issue, numerous problems can arise, and the entire supply chain of the business will be at risk. This article will explore some of the issues that food supply chain managers need to address and how to solve them.

Lack of Traceability

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To manage food safety issues in the supply chain, F&B businesses need to have the capability to trace food products.

Traceability, or the ability to track a product through all stages of the supply chain, is no longer just a nice-to-have but is becoming a mandatory requirement.  Many consumers today want to know where all the products and even the smallest ingredients come from.

 “Sharing information from every step of the food supply chain helps enhance food safety, strengthen brand integrity, and increase customer loyalty.” - Jad Asaad, Horeca Trade

On the other hand, the lack of traceability and transparency can create blind spots in a company's supply chain, leading to unnecessary risks. Legal issues may arise, delaying the launch of new products. Moreover, this can undermine consumer trust in the brand, directly reducing the company's revenue and profits.

The lack of traceability in the food supply chain is often due to companies using outdated systems or manually tracking paperwork in a traditional manner.  The obvious weakness of this operational process is that it is prone to errors and delays in information sharing.

Solution

Although still not widely used in the food industry, blockchain technology is considered by many leaders to be a promising technology for enabling traceability in the food supply chain.

Blockchain technology is a shared digital platform where users can store and share information across a network. This system allows users to view all transactions simultaneously in real-time. One of the main advantages of blockchain is that once information is added to the system, it is internally distributed within the network and permanently stored. The information cannot be attacked, manipulated, or damaged in any way.

This technology can provide the transparency, traceability, and trust that the food industry has lacked for a long time.  Thanks to its security and transparency, the blockchain system can give producers, suppliers, distributors, retailers, and consumers access to reliable information about the origin and status of each product or ingredient.

2. Lack of Ensuring Product Safety and Quality

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Today, ensuring product quality and safety is an increasing challenge for producers. Some common reasons affecting food safety and quality include:

• Limited storage and warehousing facilities

• Delays in transportation
  

• Harsh weather conditions
  

• Lack of modern equipment
  

These are some reasons why the number of product recalls continues to increase. Product recalls are extremely costly and can cause irreparable damage to a company's reputation and brand.

Solution

To produce high-quality and safe products, businesses should start by selecting the best ingredients, following international standard production methods, and testing and proving the effectiveness of those methods.

Therefore, food businesses should consider choosing a laboratory equipped with modern measurement devices and testing tools to ensure production quality and product reliability.

Packaging also plays a crucial role. Businesses need to choose the right materials for the packaging process to ensure the freshness and safety of their products.

Finally, businesses should select a logistics company experienced in handling food products to ensure efficient production and distribution.

3. Inefficient Communication Among Partners

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Incomplete information due to communication gaps among parties can have a significant impact on the food supply chain. For example, it can cause  unnecessary inventory shortages or waste, manpower, and costs . This is because the supply chain has too many participants, but they know very little or nothing about each other's activities. Ineffective communication can even lead to a lack of trust between suppliers and customers. This problem can become even worse when businesses operate in multiple regions.

Solution

N Today, the lack of information among parties is no longer a major concern thanks to food supply chain monitoring solutions. This technology also supports easier, faster, and more affordable communication between partners. Cloud-based platforms provide quick communication and a range of services that can be built and customized according to the business's needs. Besides having a comprehensive view of their supply chain, parties can also communicate online or post announcements like on social networking sites. Accordingly, manufacturers can easily exchange with suppliers privately or publicly with other partners.

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Communication between producers and their suppliers is crucial . Food businesses cannot maintain the quality of their products with poor-quality raw materials. Investments to improve the quality of input materials will always pay off : businesses can acquire the freshest agricultural products or ingredients for production. From there, businesses can easily focus on maintaining quality throughout the rest of the supply chain without worrying about supply shortages. This is also the basis for improving customer and consumer experience.

Learn more about solving information issues in your supply chain:

4. Rising Supply Chain Operating Costs

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Running a food supply chain involves many costs, some key ones include:

• Electricity and fuel costs
  

• Logistics and transportation costs
  

• Labor costs
  

• Investment in new technology
  

These costs are significant, making regular cost monitoring a challenge for food businesses.

Solution

The first step to controlling costs is to understand the existing costs in business operations. In simple supply chains, this can be done using spreadsheet tools. But if the supply chain becomes increasingly complex, businesses will need a technology solution. Highly complex supply chains can be better managed with network solutions , allowing you to integrate into a common network without connecting with each individual supplier. Businesses should upgrade their technology; tasks like sending spreadsheets via email or making phone calls need to be eliminated.

Another point is that if leaders are overly concerned with cost savings, the efficiency and long-term development of the business may be hindered . An "expensive" technology solution can bring significant ROI and save many costs in the long run. From there, businesses operate efficiently and become more attractive to customers. Businesses can also become more resilient in competition or crises like epidemics. Instead of focusing on immediate costs, leaders need to evaluate the long-term savings and effectiveness that technology brings.