The Two Biggest Visibility Problems in the Food Supply Chain

Meagan Douglas
Tue, Jan 6, 2015

The food supply chain is tricky. According to Spend Matters, there are many challenges having to do with visibility that those who manufacture food products need to address.

Lack of visibility results in two problematic areas, with a third concern being safety. One issue is that companies don't really know where their food is coming from. This is addressed in an article by Bloomberg Businessweek, which explained that much of the products - including food products - being shipped by freight are in international waters that remain largely unregulated. Additionally, the fuel coming out of cargo ships is much more harmful to the environment than regular gasoline burnt by cars. For a business that probably lists food sustainability and health as a major concern, being able to source food coming from well-built, energy efficient ships that run their shipments ethically and responsibly is a major concern.

"Regulation of air emissions from ships is virtually nonexistent today in China and the rest of the developing world," according to Bloomberg, citing a report by the National Resources Defense Council.

Knowing How Much Food is in the Factory
A second area where the lack of visibility affects the supply chain, according to Spend Matters, is when companies don't know how much food they actually have on hand, and then order too much. This is a concern for grocery stores as well. Many companies don't know how much of a certain product they will make or how much of a certain ingredient they will need in order to prepare it. For example, ordering enough cranberries is largely based on projections and the amount of cranberry sauce that a company uses for a specific item. If a company is projecting its figures based on prior estimations, it will need to know how many pounds of cranberries it ordered last year, and figure out how many it will need in order to meet the currently projected demand.

This requires lagging indicators coming from past years, as well as leading indicators such as good trends. Another thing to consider is the price of cranberries, which fluctuates from year to year.

A Final Issue with Visibility
A third visibility issue has to do with food safety. The top ten food safety stories, according to Food Safety Magazine, include major prosecutions by the government of companies that weren't mindful enough of their food safety. This is a concern for companies because of recalls. If a company can't trace its products' ingredients to specific farms selling particular items like eggs or produce, then doing recalls of certain foods will be very hard. Instead of only taking some products off the market, a company might have to remove an entire line of food because of fears about poisoning or spoilage.

All of these visibility issues can be avoided through data collection tools that would be very simple to implement.

Using Data Collection to Monitor a Supply Chain
Simply by capturing the barcodes on the boxes of raw food materials as they come into a factory, using barcode data collection on all products moving through a supply chain, companies can monitor very closely where their food is coming from. By these means, businesses will know that if a certain product is spoiled, it can look through and identify the sources of all the ingredients, and then carefully determine which of the raw materials had been the culprit that led to a defective end product. This makes everything finely transparent. Additionally, if a company is concerned about ethically sourcing its ingredients, then having a data collection system will shine a light into which items are coming from what farm, and whether this farm is behaving responsibly or not. If the farm is not, then the food with the offending ingredients can quickly be pulled from shipping.

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