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December 1, 2023

Three Challenges Food Supply Chains Face

Saurabh Lal, Senior Director of Supply Chain Network, Customer Service, and Logistics at Kellogg Company, explores the unique challenges of food supply chains and how digitalization can help address them.

The Unique Challenges of Supply Chain in the Food Industry

In the food industry, freshness and maintaining quality and food safety are two critical factors that immediately come to mind, according to Lal. Supply chains in the food industry need to get the food to the shelf as fast as possible while ensuring the food is of the best quality and is safe to consume. Lal notes that ingredient sourcing is also a significant challenge, as not every country produces all the ingredients needed for food products. Supply chains in the food industry are spread out between different countries and even different continents, which brings logistics difficulties and managing suppliers in different places.

Three challenges that supply chains in the food industry face are:

Freshness

When it comes to food, freshness is a critical factor. Supply chains need to get the food to the shelf as fast as possible while ensuring the food is of the best quality and is safe to consume.

Ingredient Sourcing

Not every country produces all the ingredients needed for food products. Supply chains in the food industry are spread out between different countries and even different continents, which brings logistics difficulties and managing suppliers in different places.

Quality and Food Safety

Supply chains need to maintain the quality and food safety of their products. This covers the entire supply chain, including ingredient sourcing, transportation, and manufacturing.

"Our job is to get the food to the shelf as fast as possible. And ensuring that they reach the consumer in the safest possible manner."

Saurabh Lal -
Senior Director of Supply Chain Network, Customer Service,
and Logistics at Kellogg Company

The Need for Organizations to Embark on a Supply Chain Digitalization Journey

Lal stresses that digitalization is not unique to the food industry but is essential for any supply chain. He notes that supply chains need to respond to dynamic demand, variability in demand from customers, and the accuracy and reliability of supply chains are essential. Lal highlights the importance of planning, as many companies still use manual planning, which requires a significant amount of human effort and is prone to errors. Digitalization is critical to ensuring the accuracy and reliability of supply chains, especially as the volume of information flows throughout the supply chain, from suppliers to manufacturers to customers.

"Therefore, digitalization is something that is the need of the hour. Without it, the type of planning that you are required to do, you're not going to be able to support the business in the manner that you want."

Maximizing the Value and Benefits of Supply Chain Digitalization

Lal emphasizes that companies should not focus solely on people savings but be business-centric and solve real-world problems. He recommends that companies focus on bolt-on solutions rather than a full end-to-end transformation, which is likely to be costly and time-consuming. Lal advises companies to focus on solving real-world problems and think about how the technology solution will add value to their business.

"Don't be focused on people's savings, be business-centric, solve a real problem, and think about putting in bolt-on solutions rather than full end-to-end transformation."

Final Thoughts

Lal notes that digitalization is an imperative that companies need to start now. He advises companies to build their business cases and work out how they will get payback. Lal stresses the importance of finding sponsors, proponents, and allies within the organization who will support the digitalization journey, as it’s an organization-wide effort.

"Bring it all together. Build your allies. Start the journey now."

Digitalization is essential for any supply chain, not just the food industry. Companies should focus on solving real-world problems, be business-centric, and think about how the technology solution will add value to their business. By building their business cases and finding allies within the organization, companies can ensure a successful supply chain digitalization journey.

The Takeaways

  • 1.

    Supply chains are critical to businesses and have the capability to orchestrate change to become a source of strength.

  • 2.

    Supply chains in the food industry require a focus on freshness, maintaining quality and food safety, and ingredient sourcing across different countries and continents.

  • 3.

    Prerequisites for embarking on a supply chain digitalization journey include mindset, people, process, and technology in that specific order.

  • 4.

    To maximize the value and benefits of supply chain digitalization, companies should focus on business-centric solutions that solve real problems rather than just KPI-specific goals and should consider bolt-on solutions rather than full end-to-end transformation

  • 5.

    Supply chain digitalization is an imperative for the future and requires building business cases, finding sponsors and allies, and starting the journey now.

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