These are testing times for the food and drink industry, with food inflation rising to 18.2% in the year to February 2023, the highest level of inflation in 45 years. With several factors in play, not least the rising cost of energy, raw materials and transport, alongside geopolitical uncertainty, recruitment gaps and the onset of a recession, supply chain issues continue to hinder progress for many food businesses.
Barriers to overcome
According to a report from Barclays, 59% of UK manufacturers are currently experiencing supply chain challenges, with rising energy costs at the top of the list.
After energy, the rising price of raw materials is the second-most common concern. In fact, a third of food manufacturers say they are struggling with the availability of materials, as the Ukraine war continues to limit the supply of critical ingredients such as wheat and sunflower oil.
Transport and logistics are the next most pressing issues, with trade barriers a concern for almost one in three manufacturers. Elsewhere, recruitment continues to be a challenge for the food and drink industry, with Barclays research finding that food and drink manufacturers have the biggest recruitment target for this year (71,500 vacancies) out of the sub-sectors surveyed.
Responding to supply chain challenges
The last few years have put the spotlight on the need for digital supply chains that go beyond the conventional inventory control processes. Let’s look at some of the ways technology can help you better manage the food supply chain.
Increase business agility and visibility
Going digital is one of the key ways of increasing business agility and visibility. With digital systems, you’ll be able to conduct and document safety checks, manage and rotate inventory, record temperatures and more. This removes several steps in documenting compliance, helping you reduce the number of errors and streamline processes.
Additionally, end-to-end food solutions can centralise data from multiple sources, giving you more visibility over not only your manufacturing and production processes but also your customer data.
This makes it easier to:
- Maintain quality control to ensure the best end product for your customers
- Become more customer-centric by quickly finding the customer information you need to provide excellent service
- Accurately plan for the future with the help of predictive analytics and data
Automation is key
Automated processes can not only optimise your employees’ time but also make for more efficient operations and fewer food safety risks. For example, automation can handle complicated meat cutting processes and accelerate output, as technology can work 24/7 (with the occasional break for maintenance) and typically more efficiently than humans.
Solutions like Lot tracking allows you to track everything from raw food ingredients to finished products in real-time, regardless of where they are in the supply chain. Plus, monitor product expiry dates and take action against expired products by preventing them from reaching your customers, helping you reduce your losses and avoid recalls.
Automated technology can also help you reduce food waste. This is because an end-to-end solution can provide accurate data in real-time on the amount of stock needed, reducing the chances of over or understocking.
Read more about the benefits of automation in the food and drink industry by clicking here.
Increased use of advanced analytics
With IoT sensors and advanced analytics with AI, you can reduce production failures, stay on top of equipment maintenance and refine the production process, no matter the product. This helps you reduce downtime and boost your bottom line.
Another area where analytics has become critical is inventory management and planning. In the produce industry, for instance, planning can be difficult because most items have a short shelf life.
This is especially true when you take into consideration the impact of weather and yields. Industry experts plan to the best of their ability to forecast and meet demand, but often spot market purchases are made to reconcile the difference between product availability and actual supply and demand.
Here’s an example to demonstrate the power of analytics. Say there’s a food manufacturer that processes shelled and unshelled almonds, as well as almond paste. They use a largely manual process driven by one key employee to determine which almonds by quality and size went into which production process. This dependence on manual labour limits the company’s ability to scale operations.
Using advanced analytics, you can model your process to automate production decisions for greater efficiencies in inventory management and improve planning for the future.
Other key benefits include:
- Ability to access and analyse data to control the distribution of almond inventory by quality and size
- Assisting distribution lead in the forecasting of product needs and processing plan
- Enabling scalability by automating production decisions with AI
Overcoming challenges in the food and drink industry
Supply chain disruption is just one of the current issues in the food and drink industry. In our brochure, we look at some of the biggest challenges faced by the industry and how to solve them.
- Ensuring supply chain visibility
- Meeting consumer demands for a more sustainable future
- Navigating the issue of rising costs
- Tackling waste reduction levels
- Managing the global labour shortage
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