This year has been one of uncertainty. The world is adjusting to new and different ways of operating due to COVID-19. This is particularly true for the food and beverage industry. Finding ways to remain flexible is a true challenge amidst new restrictions and continuously changing operational processes. You must adapt your supply chain and business models to overcome these endless changes.
In any environment, both internal and external influencers regularly affect supply chain efficiency. As you might imagine, in today’s atmosphere with COVID-19 restrictions, these influences have an even greater impact on supply chains. Finding new ways to add efficiency is critical to successfully manage through today’s changing conditions.
Managing supply chain challenges in today’s marketplace
In the food and beverage industry, if you’re looking to improve the efficiency of your supply chain, making adjustments in the following areas of your business will help you find new ways to do more with less and better meet customer expectations.
1. Improve supply chain visibility
If you don’t have full visibility to your supply chain, it’s impossible to identify issues and optimization opportunities. Having little supply chain visibility is a challenge faced by many that causes issues in a stable environment. In our current world of unpredictability, it’s even more critical to see your supply chain in order to drive the efficiency needed to accommodate today’s standards. Beyond having the ability to track shipments, it’s important to have the big picture of all aspects of your supply chains – i.e. cost components, service and handling, lead times etc.
2. Reduce back-of-house tasks
Consumer demands pre-COVID were creating the need for back-of-house labor like meal kit packing, cutting and prep. Finding efficient ways to manage these tasks was important then and has become essential now, in a faster paced environment where personnel are being asked to handle additional cleaning and disinfecting procedures.
By moving these back-of-house tasks forward in the supply chain, processing can be automated in service centers so pre-cut items and meal kits arrive to your store locations ready to place on your shelves.
3. Gain insight into demand volatility
Unstable demand—no matter the cause—is difficult to plan for. COVID-19 restrictions may have thrown off your number of customers. Maybe the need for multiple SKUs is affecting how you ship. No matter what the case, maintaining visibility into order status and changing demand is essential. Using this information can help you make smart decisions about your business.
Being able to answer when to place the next order, if consolidation is an option, and other questions can all affect your supply chain’s efficiency.
4. Uncover unnecessary spending
Driving costs down is perhaps more critical than ever before. Paying attention to cost components of individual products as well as cost factors of the overarching supply chain can help you identify unnecessary spending. Once you understand where your money is going, it’s easier to drive those costs down. Pay special attention to small inconsistencies that happen irregularly as these can quickly add up to significant costs.
5. Understand today’s transportation market
Truckload capacity is highly fragmented. Because the majority of the transportation market is comprised of small and mid-sized carriers, if you’re working with a 3pl, you’re able to have access to a large number of carrier relationships in order to cover your freight capacity needs.
Capacity is still at a premium. Carriers can be selective about freight acceptance. We’re regularly seeing overly complex or challenging freight (like fresh products) getting passed over in favor of simpler freight.
Inventory level and demand requirements are bound to remain volatile for some time and the most successfully companies will focus on creating efficiencies through technology, service networks, and expedited transportation to overcome these and other challenging marketing conditions.
6. Find and secure the delivery options you want
When it comes to sourcing the capacity you need—especially in times of disruption—look for 3PL providers that can support your supply and demand requirements. Look for the combination of large service networks and a wide variety of logistics services.
Engaging a higher number of distribution center options in high-demand areas is an effective strategy for restaurants. Keeping inventory close at hand can help speed up orders and better align supply and demand and is an effective overall strategy for supply chains.
7. Work with experts
Perhaps in the past, outsourcing was approached with caution. Providers have historically been concerned about losing control and visibility to supply chain elements and decisions. But more recently, many companies are realizing the exact opposite. Outsourcing supply chain management can reduce resource costs and increase efficiency through expert optimization. Working with a credible, aligned outsource supply chain provider can reduce the time and energy needed from store operators to manage POs and deal with claims.
8. Be adaptable
Any number of influences on supply and demand can affect your supply chain efficiency efforts. Even positive changes—expanding customer base, popularity of sale items, etc.—can reduce the efficacy of your hard work.
Choose your vendors and providers carefully. Focus on those that offer clear communication and are willing to collaborate on the right solution for your business—not a one size fits all, quick fix. Collaboration combined with the scale to offer new technologies and execute on advancements in transportation, warehousing, and operational areas can set your business apart.
There is no maximum potential for supply chains. There is always opportunity for more efficiency. As our business and the market change and evolve, creating the most efficient supply chain possible will help you do more with less, meet consumer demands, and adapt quickly to changes.
No matter which area of supply chain efficiency you choose to focus on first, maintain an adaptable mindset in your approach and you’ll best position yourself to overcome disruptions to the market.
If you’re ready to prepare your supply chain for what comes next, connect with one of our produce supply chain experts today.