The food service industry is preparing for shortages in 2022 across many categories from beef and poultry to dairy to even canned goods.
“It is a combination of factors: supply chain issues and driver shortages, scarcity of packaging, labor shortages at manufacturing and production plants as the workforce has not returned as facilities restarted from COVID closures,” Keith Daniels of Carl Marks Advisors told Parade this month.
Food processors, battling supply chain issues since the pandemic started, may find help by utilizing the latest technology which takes advantage of emerging AI and machine learning capabilities.
“Today’s tools are integrated through standards and smarter because there’s more computing power behind the artificial intelligence (AI) that can learn how your supply chain works and make recommendations to keep ingredients and products flowing smoothly,” writes Wayne Lab in Food Engineering.
Bull-Whip Effect and Shift to Local/Regional Suppliers
A hallmark of the current food supply chain problems has been the so-called bull-whip effect where scarcity of supply combined with a lack of labor sent supply shocks cascading up and down the supply chain.
“I don’t think anyone could have predicted the drastic impact COVID-19 had on supply chains and the consumer demand relative to the upstream consequences, but it did heighten any gaps food manufacturers may have had in their supply chain exponentially,” Clay Gentry, president, transportation management division, Transportation Insight told Food Engineering.
Backup options were needed at every logistical level and long lead times from international sources led many food processors to look on the local and regional level for new suppliers.
Tracking Products: End-to-End Visibility Important
“One of the biggest supply chain issues during the pandemic has been visibility of product, location and how to shift from point A to point B quickly,” Liz Sertl, senior director, GS1 US, told Food Engineering.
GS1 barcodes are scanned over 6 billion times each day, allowing the identification, tracking, and tracing of products across the globe.
Lab writes: “Without end-to-end visibility into the supply chain, it’s hard to pinpoint exactly where a product is at all times. When supply chains are identifying, capturing, and sharing product and location data in a standardized way, businesses can quickly be made aware of what supply chain issues may be occurring and adjust appropriately.”
Data Standardization Can Optimize the Food Supply Chain
Data standardization across software providers and food and beverage processors is needed to optimize the food supply chain.
“With standardized data, the need for cross-reference tables and manual intervention is minimized,” said Sertl.
Global Trade Identification Numbers (GTINs) and Global Location Numbers (GLNs) ensure optimal supply chain visibility and interoperability between all partners.
Companies need to understand their data gaps for better forecasting and risk analysis.
AI and Machine Learning Boost Demand and Forecasting Tools
Advances in AI and machine learning have eliminated the need for food processors to rely on a mishmash of standalone software.
“Most ERP (enterprise resource planning) companies today have specialized systems that understand the needs of processors, and in many cases, these tools can be located in the cloud or on premises,” wrote Lab.
Demand planning and forecasting tools are becoming essential to food processing sales and operations.
New technology allows companies to simulate changes in their supply chain and demand, including the capability to compare options in terms of:
- Service levels
- Warehouse utilization
- Transportation costs
- Cold storage requirement
Anticipating Disruptions in the Food Supply Chain
Good supply chain planning systems should be able to keep track of demand, capacity, and sourcing in real-time and be able to provide multiple scenarios to adjust to food supply chain disruptions.
Today’s technological tools, such as FreshByte Software’s inventory control module, can provide food processors with traceability including up-to-the-minute information regarding every item’s availability.
Contact FreshByte Software today to find out how we can help your wholesale distribution company streamline your operations and internal controls and keep you on top of your supply chain.