Most people thought the supply chain would be working better by the last quarter of 2022. But the weaknesses exposed by the COVID-19 pandemic appear to be well-entrenched. Materials, labor, transportation capacity, and order turnaround remain constrained. Global events including Russia’s invasion of Ukraine, soaring inflation, weather disasters, and China’s sporadic shutdowns to maintain its zero-COVID policy have added pressure as well.
So, disruptions continue and are unlikely to be resolved any time soon. What can be done to minimize the impact on your operations and delivery schedules? At PMMI, The Association for Packaging and Processing Technologies, we addressed this with OEMs and CPGs at our recent Top to Top Summit, and participants noted that there are solutions to deal with our “new normal.”
In this two-part series, we’ll talk about a range of strategies, which include communication with suppliers, selecting the right raw materials and packaging, and more. But for now, we’ll focus on visibility—in terms of tracing each step of your supply chain, and the technology that can help maintain product quality.
Traceability and Digitalization
Traceability, or the ability to track the food product through all stages of the supply chain, is now more of a demand rather than a request among many consumers. This makes it more important than ever to have good data on the food products in your supply chain. Having and sharing authentic information from each and every step of the food supply chain enhances food safety, strengthens brand integrity, and increases customer loyalty.
Lack of traceability and transparency, on the other hand, can create blind spots in your supply chain and expose you to unnecessary risk. It can weaken consumers’ trust in your brand, which can translate into lower sales and profits. The lack of traceability in the food supply chain is typically caused by companies using outdated systems or traditional paper tracking and manual inspections. These introduce errors and delays in sharing information.
This is where digitalization comes in. You’ve probably heard about digitalization since it’s been a hot topic in manufacturing overall, but it’s an important step to overcoming and preventing supply chain disruptions. Digitalization supports the collaboration needed to proactively identify and mitigate supply chain problems, and it’s being embraced by the food industry where it helps meet the product visibility requirements of the Food Safety Modernization Act.
For example, blockchain is regarded by many as 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 enables users to look at all transactions simultaneously and in real-time.
One of the main advantages of blockchain is that once information is added to the blockchain, it is distributed within the network and it becomes permanent. It cannot be hacked, manipulated, or corrupted in any way. This technology can deliver the transparency, traceability, and trust that has eluded the food industry for a long time. Due to its unalterable data, the system can give producers, suppliers, distributors, retailers, and consumers access to trusted information regarding the origin and state of each product or ingredient.
Digital Inventory Solutions
Blockchain isn’t the only digital tool that can help your supply chain—other supply chain management platforms can also provide full traceability, chain of custody, and other services, such as order management, inventory control, and logistics management, in a single, integrated platform.
Ideally, your chosen platform should enable real-time visibility to your inventory throughout your supply chain; on-site off-site and in-transit; and support RFID, Internet of Things (IoT), telematics, and other real-time and automated tracking technologies so that your inventory data is accurate.
Managing inventory with these tools is an important way to meet the required balance: too much inventory will spoil and go to waste, but too little will disappoint your customers. By using digitized tools, you can even tie into supplies of your product at the retail level. More sophisticated network solutions can “sense” demand changes at the store and adjust or create orders on the fly, to keep inventory levels optimal. This can keep service levels high, customers happy, and inventory and waste low.
Greater visibility requires more complete integration between end-of-line operations and enterprise resource planning systems. There is no one-size-fits-all solution, but the food manufacturing industry is well-placed to implement the latest tools for traceability and transparency. Doing so will not only ensure more accurate inventory and product safety, but it is an important strategy to manage supply chain uncertainty.
In our next article on supply chain management, we’ll dive deeper into the other ways industry stakeholders can navigate supply chain issues. In the meantime, don’t forget to register for PACK EXPO International, taking place Oct. 23-26, 2022, and McCormick Place in Chicago. For more information and to register, visit packexpointernational.com.