Editors note: This article was provided by our Advisory Board Member, Micha Veen. Micha is the owner of Unique Excellence, through which he develops and delivers feasible operational and supply chain innovations to achieve high-impact growth with their corporate and SME clients across FMCG and Food & Beverage.
The food and beverage industry plays a very prominent role not only in the global economy but in the way that it affects our most basic human needs. According to the United Nations, food production would need to grow by as much as 70% from 2010 to 2050 to meet the needs of 9.7 billion people. There's a lot at stake on how this industry operates and grows.
If we take a look back, the food and beverage industry has faced many operational supply chain challenges, from being able to ensure quality to the safe and timely transport of raw materials.
In the last 5 years, however, these challenges have intensified due to the ever-changing consumer demands and growing focus on leading innovations.
What are the current challenges affecting the supply chain industry?
We can identify various main challenges that are still affecting the industry such as:
1. Lack of end-to-end food supply chain traceability through;
Complex and inefficient inventory control.
Failure to track inventory across multiple warehouses and stores.
Inadequate and miscommunication between supply chain partners.
2. Inability to maintain the safety and quality of food products, e.g.
Food fraud
Maintaining food-grade facilities from “paddock to plate”.
Weather fluctuations affecting product quality (e.g. floods, drought, etc.).
Large variation of distribution and logistics partners and solutions, incl. temperature-controlled distribution, shipment consolidation, and transportation.
3. Rising operational and supply chain costs
Raw materials
Energy and fuel
Distribution, logistics, and freight (minimal freight consolidation)
Resources due to minimal investment in new technology.
4. Environment, social responsibility, and affordability
The “Plastic Ban”
The rise of health-consciousness among consumers including the ascent of meat-free & veganism trend.
The optimum level of stringency in the regulatory landscape.
All of these have led to increased awareness towards the optimal use of operational and supply chain skills, experience and technology solutions to deliver a cost-effective, end-to-end supply chain model. It’s imperative to introduce a fit-for-purpose technology solution(s) that is able to reshape supply chain management.
How Technology Tackles These Challenges
Although all these challenges can be tackled separately, several leading technology organizations, have started to introduce end-to-end blockchain solutions paired with IoT devices to deliver high-impact benefits for;
1. Food fraud – Introducing end-to-end food supply chain traceability to;
Reduced food fraud
Reduced food waste
Improved consumer information
Increased food safety
2. Supply chain costs – Extending into operational cost reductions and financial supply chain services, e.g. trade finance, to deliver;
Increased profitability among food supply chain partners
Reduced cost for the consumer
Reduced costs through freight consolidation
3. Safety and Quality – increase consumer trust through the ability to track individual food products real-time, to enable;
Single item or small-batch recalls,
Reduce food safety risks, e.g. contamination, etc.
Consumers are assured of the food origin and quality
Product packing and distribution accuracy
ConsolFreight is using leading technology to tackle the high-impact challenges in the food and beverage environment. Through the creation of a digital blockchain ecosystem, today we’re able to deliver end-to-end supply chain visibility while empowering the forwarders as enablers of trade finance for our clients.
The key to success in this sector is related to continuous innovation and willingness to increase profitability among its large and small supply chain partners, delivering track-and-trace functionality across their shipments to reduce food fraud and increase safety and quality across the food supply chain, ultimately benefiting the health and cost-conscious consumer.
We want to hear your thoughts. Let us know how you think technology could be best used in logistics and supply chain.