Supply Chain Challenges in Food Production to Pay Attention to Right Now

Modern supply chains are complex and intertwined, making them vulnerable to fluctuations in fuel costs and the availability of resources. Although the full impact of recent world events on the global food supply chain is yet to be determined, prices have already risen, and there are shortages of ingredients and labor. Food producers need to be more agile in adjusting recipes and bringing new products to the market. Hence, it’s more important than ever to stay updated on what lies ahead so that producers can continue to serve their customers without disruption.

Five Critical Supply Chain Challenges in Food Production

With global supply chain challenges continuing in 2022, here are the top five that will create the biggest impact on food producers:

1. Cost and quality expectations

Regardless of disruptions that cause a rise in raw materials costs, clients like retailers and supermarkets still expect that the price and quality of products remain the same.

2. Labor and production management

Businesses have to plan to have the right people in the right place, in the production process. Pandemic restrictions, increased levels of absence, and replacing employees following the Great Resignation wave are making operational and workforce planning more difficult.

3. Rising raw materials costs

Rising costs of raw materials such as livestock feed complicate things for food producers already dealing with high costs of transport and other production costs. Innovating and pioneering business models that aim to keep certain materials in circulation or create new products to phase out the reliance on others may be the best way to stay competitive.

4. Managing complexities during disruptive times

A fast-changing business landscape means that food producers have detailed and complex planning needs. They require technology that enables the fast evaluation of different optimized scenarios, making them more agile and able to cope with change.

5. Changing consumer preferences

In the current political and commercial climate, the products that consumers purchase are often driven by forces outside of food producers’ control. Whether it is cost, a move towards plant-based foods, healthy eating, or a desire for greater convenience, this disrupts plans or the amount of stock they need to hold to cover peaks in demand.

Managing Supply Chain Disruptions with Intelligent Food Planning

Constant disruptions in the supply chain are making companies scramble to seek better tools for continuous monitoring and management. However, data gathering is not the end goal. A robust planning solution provides value by using the data to provide a single source of truth, provide a clearer picture of goods flow throughout their supply chain, forecast potential bottlenecks, and agility in adjusting the plan.

According to a report by McKinsey, implementing intelligent planning solutions allows early adopters to reduce logistics costs by 15 percent, reduce inventory levels by 35 percent, and improve service levels by 65 percent, compared with slower-moving competitors.

With Advanced Planning Systems (APS), food producers have access to the “big picture.” APS allows them to move away from silo planning and set the goals and KPIs that drive the planning and production process – whether they be financial or driving corporate responsibility. An enterprise that can proactively run predictive scenarios instead of only being able to react when something happens will have a view of the future and be able to stay ahead of the most critical challenges in the food supply chain.

These solutions enable possibilities such as:

Producing digital forecasts using market intelligence to determine which trends will be most profitable
Planning and optimizing entire supply chains digitally
Full visibility and control over what happens throughout the supply chain
Optimizing the workforce for improved availability and productivity
Logistics planning that covers multi-modal, last-mile distribution, and reverse logistics

How The Logic Factory Can Help

The Logic Factory understands the challenges of the food supply chain in tactical and capacity planning and cost-effective operational scheduling.

Intelligent Food Planning combines the industry expertise of The Logic Factory and the power of DELMIA Quintiq technology to deliver a solution specifically designed for food and beverage manufacturing.

We’ve proven that optimization technology adds value for various customers: efficiency and effectiveness can be raised with multiple percentage points.

If you are interested in finding out more about Intelligent Food Planning, contact us via info@thelogicfactory.com

About the Author

Roel van den Broek

As CRO, Roel leads global sales, marketing, and innovation. He takes pride in building lasting relationships and enabling customers to unlock value by solving supply chain planning & optimization puzzles. Roel has over 20 years’ worldwide experience in management consultancy and sales in both Supply Chain Planning & Optimization and Artificial Intelligence. His industry expertise spans a wide range of sectors, notably Food Manufacturing, Logistics, Retail, and Postal & Express. Prior to joining TLF, Roel worked as a management consultant focusing on Artificial Intelligence-driven business transformations.