Procurement and distribution are an integral part of the manufacturing and sales process of every product produced. They are vital for giving a competitive advantage to the players that want to invest in supply chain management. The supply chain aims to meet customers’ demands timely and efficient. A good supply chain results in lower transportation, storage, and other costs, directly affecting the product’s selling price. Thus, it is safe to say that customer satisfaction and higher profits depend on good supply chain management.
Food is a necessity for every living organism in this world. The biggest hurdle in the F&B supply chain is its perishable nature, and thus its transportation has initiated the development of many great innovations, transforming its developmental path. However, it is still a pain point for the food industry. Food supply chain management is tricky, and the process is further complicated for companies that do not own the entire supply chain. All companies need to be on the same page for a smooth unhindered process, which is seldom the case. Developments such as temperature-controlled packaging have solved some of the impending problems we were facing. It is a multipurpose protection tool against physical stress in addition to keeping it at a constant desired temperature despite the climatic fluctuations during transit.
The Market is a Constant Battlefield
Companies remain relevant in a competitive market by keeping costs low without compromising quality. Technological investment to improve supply chain management is the perfect example of a win-win situation. When you aim at customer satisfaction, the buyer will choose you first above others because of the inculcated trust. B2B food supply chain management aims at providing quality products to customers in lieu of just focusing on their profitability, which is an added perk of the process.
Transparency sets the foundation for trust, and customer trust is a skill that sets a producer apart in the sea of competitors. A select few firms recognize the value of this gem. Reliability tends to result in customer loyalty, the prerequisite for market dominance, as agreed upon by many accomplished enterprises. Connecting-Food was founded with this very principle in mind, along with a concern for maintaining a certain standard of the goods provided to their trusting clients. Food tech and blockchain is an interoperable system that uses real-time data to increase transparency.
Old and Fatigued Needs a Makeover
As brilliant as the concept is, the F&B supply chain is fatigued and saturated. Wrong deliveries aren’t unheard of, quality is renowned for ever deteriorating, and the hassle of customer care is highly undesirable. Everyone, from the chefs to the restaurant owners and catering managers, is trying to postpone the inevitable downfall. It is a vicious cycle of frustration resulting in low-quality produce, resulting in more frustration. Therefore, numerous methods have been employed for supply chain enhancement. Technology, for example, is a brilliant tool that can make the process much smoother. Five main factors that can instantly enhance the supply chain quality are
- IT-enabled after-sale services & marketing
- IT database systems
- IT Infrastructure
- IT-enabled production & logistics, and IT-driven SC integration.
Based on comprehensive studies, many experts concluded that technology could re-engineer the supply chain. These five tools are used in conjunction with strategic managerial practices to gain an advantage in the market by maximizing customer satisfaction.
Effects of COVID-19 on the F&B supply chain
Breaking down the old is an essential step toward building new things. Pre-COVID-19, productivity enhancement, and considerable cost-cutting were bringing improvements to the supply chain process with the help of the constant inflow of investment. However, the pandemic has put a lot of things in perspective, as many businesses and industries faced the possibility of shutdown and realized their vulnerable opposition due to continued disregard toward their shortcoming. One stark realization that struck home for most companies was that their visibility beyond tier-1 suppliers was non-existent. Clorox is one such company that has taken action after realizing its shortcomings and taken a bold step by investing $500 million for upgradation to provide real-time visibility and step up its demand planning.
An unanticipated revolution introduced to the supply chain which functions as an after-effect of the pandemic is a turnaround of communications technology. For example, by introducing tools such as E-Marketplaces and radio frequency identification tags. The use of advanced communication tools became a need of the hour, which invited the use of E-marketplaces and RFID tags. RFID tags are tracking barcodes that act as identification for merchandise that transmits location information to the reader. This makes managing the supply process effortless and gives the customer an option to keep track of their shipment. This has proved to greatly increase the trust customers have for their suppliers and removes the constant worry they might harbor about their goods.
ERP software provides up-to-date data and can provide an immediate warning in case any mishap or delays happening to the cargo en route. This allows the concerned party to take immediate steps for damage control. It has proven to save a lot of hassle and losses for the suppliers.
The 2 biggest shifts after the Pandemic: e-Procurement & Color Sensing Technology
We could witness the biggest two shifts after the pandemic. First, an increased percentage of people opted for E-procurement. Secondly, many countries took conscious steps to decrease their dependency on the Chinese supply system.
Color sensing technology has given birth to a long overdue transformation for F&B supply chain practices. This provides a digital-based color analysis of the freshness of the products with a high level of objectivity and accuracy. It is an important initiative to reduce food wastage. The real-time, traceable analytics guarantees a boost in food quality across the industry through this newest marvel introduced to us by the University of Barcelona through the Food Sensing line.
Finally, the percentage of people that have switched to online shopping has increased by 70% since the pandemic. E-procurement has increased the need for a holistic approach. Also, data sharing and visibility tools discussed earlier have made it much easier for organizations to get closer to their suppliers and build better relationships.
These are some ways supply chain management has been integrated into the market and has shown favorable results for everyone involved.
Nishi Jain is a passion-driven market content writer who creates simplified content and works with a market research company—The Insight Partners. She is a published author in anthropology Till Grey, in addition to several book chapters and research articles.