A multitude of issues spawned the supply chain crisis that surfaced during the pandemic, a nightmare scenario for businesses and consumers alike. Unfortunately, as time passes, those same issues persist.
Supply chain problems can be particularly troubling to food production and distribution businesses. One way to address ingredient-related supply chain issues is to change how you approach supplier relationships. Establishing brand agility – and resiliency – demands better development of ingredient agility. Technology that supports tracking, communication, and flexibility with suppliers can help brands remain active and profitable under a cloud of uncertainty.
Lingering supply chains challenges
Historic workforce disruption sparked the early supply chain breakdowns. Those problems hit some industries harder than others, but labor shortages and other supply chain threats have outlived the initial crisis and spread throughout the CPG industry. Finding plant workers has become worse than a scavenger hunt, and there still aren’t enough truck drivers to ship the finished goods that brands can produce. After years of struggle, there’s no easy solution in sight.
In addition to the widespread dearth of labor, inefficient planning made things worse. For example, the early pandemic sales slump prompted manufacturers to cut semiconductor orders so that when sales surged unexpectedly, companies couldn’t fill the orders.
In the food and beverage industry, labor and transportation issues led to empty store shelves. In contrast, a drop in institutional orders sparked surpluses that brands had to destroy.
Unpredictable conditions seem likely to continue through the near future. However, surprises can crop up anytime, even when the economy appears to level off. That’s why it’s essential for every business to take preventive measures — to focus on agility with access to a wealth of supplier options.
Addressing supply chain issues
Increasing efficiency and managing costs can help address brands’ problems due to supply chain issues. But value creation opportunities in digitization, sustainability, and transformation can also play a significant role in the solution. Business owners quickly cite supply chain problems yet fail to implement responses that support resilience, like increasing their number of suppliers and adjusting procurement practices.
Emerging technology-based services can help. For example, digitizing supply chains makes it easy for organizations to pursue brand agility. In addition, having the right talent and tech to pursue agility while keeping up with regulatory changes and meeting ESG challenges more efficiently is a boon to profitability.
Food manufacturing challenges
Keeping store shelves stocked and reigning in food product inflation remain significant issues for food retailers. Transportation challenges, like the record shortage of truck drivers, and production problems, from crop failures to the lack of workers, can’t be predicted or controlled. Yet the success of food manufacturers depends upon a steady supply of ingredients that facilitates uninterrupted production, enabling continuous fulfillment of customer demand.
You’re losing profits if your consumers can’t find your products. NielsenIQ data showed food and beverage retailers missed out on $82 billion in sales last year due to out-of-stock items.
So, finding ways to solve ingredient supply chain issues — without driving up costs — remains a priority for every food and beverage manufacturer.
Brand resiliency via ingredient agility
How can you ensure your brand endures the most uncertain conditions? Agility. Increasing flexibility and adaptability within the food supply chain is a challenge. But digitization presents the most feasible opportunity for shoring up supply chain resiliency.
In recent years, growers, shippers, processors, and manufacturers have become increasingly specialized. As a result, they’ve become more focused on retail sales. So, too much food sat idle when the pandemic hit, cutting into institutional orders, and sales bottomed out since the system lacked the flexibility to adapt.
Imagine an environment incorporating a mutually beneficial relationship between the world’s suppliers and manufacturers. TraceGains is the only ecosystem that provides that access.
How does it work? It’s like a LinkedIn for CPG supply chain enterprise buyers, suppliers, and co-manufacturers. It’s the world’s largest global directory, but with a twist — designed so that every business that needs ingredients and their ingredient information is available in one place. More importantly, we provide data to support your supply chain and relationships. We designed it to link you with contacts in the context of your work, whether it’s safety and quality, compliance, or new product development and formulation.
Technology upgrades and advances in artificial intelligence, machine learning, and data analytics have made it possible to create systems that improve supply chain agility. Technological advancements can also support better data utilization to automate decision-making processes, helping brands better anticipate, identify, and prepare for potential supply chain disruptions.
Less specialized and minimal inventories might also be needed to help mitigate the effects of unexpected supply chain bottlenecks. An unlimited supply network linking worldwide users supports the immediate need and proactive future planning — a win-win system.
Three critical ways food and beverage brands can become more agile regarding ingredients:
- Alternate sourcing.
- Substitution of ingredients when traditional ones are in short supply.
- Opting for lower-cost alternatives with greater ESG (environmental, social, and corporate governance).
Ingredient alternatives and flexibility create business agility. Global markets become a village of sorts when participating in a worldwide networked ingredients marketplace. Agility produces the ultimate competitive advantage and is key to survival amid today’s unpredictable supply chain. Agility combats inflation, allows companies to move at market speed, create growth opportunities, and beat the competition.
Connect and collaborate with TraceGains
Networked supply chain automation facilitates ingredient agility, the secret to brand agility. Most of your suppliers are already on TraceGains Network, where you can instantly connect and collaborate. We can help your business overcome supply chain challenges and become more profitable by supporting ingredient agility. Don’t hesitate to check out our solution and request a demo.