Build a more resilient post-pandemic food and beverage supply chain

March 7, 2022 | 4 minute read
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By Sushant Sawant and Molly Chakraborty, Trinamix, and Vikram Singla, Oracle

The food industry is one of the largest and oldest non-durable consumer goods industries. In recent years, the food industry has undergone a major overhaul, driven by globalization, climate change, and recent pandemics.

Food safety continues to be one of the major challenges of the industry. Consumer behavior changes due to lifestyle, the pandemic, and seasonality trends continue to play a key role in this industry. Government regulations and policies work continually to support the health and safety needs of the industry, as does the latest technology. Regulations around carbon footprint, water stewardship, sustainability, and social policies continue to impact the food-chain business.

Supply chain perspective

The primary focus of the food and beverage industry over the last 40 years has been on delivering innovations in food engineering. In supply chain, the focus has been limited to taking out costs. However, supply chain performance drivers are becoming more important than ever for efficient and effective planning and execution.

Supply chain challenges include demand volatility, supply uncertainty, labor challenges, capacity, and ever-increasing cost and margin pressures. The entire set of end to end activities—the sourcing of raw materials, production, processing, packaging, storage, wholesale distribution, retail distribution, and delivery to end customers—form a network effect in the F&B ecosystem. A hiccup in any tier along this network has a ripple effect; all of the parties involved (farmers, food service providers, distributors, CPG companies, grocery retailers) are affected, and how they respond adds to the feedback effect.

With all this complexity, there is a clear need to model digital food supply chains—essentially making every product a “digital asset” that can help you monitor and assess the cost, speed, compliance, and service levels of your supply chain.

Key trends and observations: Everything starts with customer experience

Supply chain leaders are now expected to deliver across areas spanning compliance and corporate responsibility, starting with the ability to drive meaningful customer experiences. They need to proactively manage shifting consumer preferences, which has resulted in ever-increasing product portolios to cater to granular customer segments (e.g. vegan). E-commerce, including new business models (especially around fresh produce delivery) has further raised complexity. Diet trends and the pandemic have led to fluctuating demand and panic buying.

Modern consumers are very conscious of the environment and want their food to be produced in a sustainable way. Various standards (e.g. SASB, GRI, etc.) are in place, and organisations are expected to report on and reduce their carbon footprint, water and energy usage.

Regulatory pressures continue to increase, whether it’s due to trade wars or traceability requirements (given consumer awareness around allergies, etc.).

The pandemic has driven an increased focus on worker health and safety. And with the current labor shortage, supply chain leaders need to manage an adequate supply of staff.

Managing disruption: Digitizing for a resilient supply chain

Data is now being seen as a new currency; however, it has traditionally has been a challenge to gather, reconcile, and analyze massive amounts of data quickly and efficiently. Cloud supply chain applications that are inherently designed to automate business processes are foundational to a digital supply chain. This foundation will ensure that F&B companies can effectively evaluate and address the forces of emerging technologies and market demand, helping them to drive continuous innovation.

Oracle Fusion Cloud Supply Chain & Manufacturing (Oracle Cloud SCM) is a suite of cloud-based supply chain applications that helps customers build and maintain resilient and growth-oriented supply chains. Within Oracle Cloud SCM are two solutions—Oracle Fusion Cloud Transportation Management (OTM) and Oracle Intelligent Track and Trace—that are helping F&B supply chain customers navigate their significant challenges.

OTM helps customers manage all transportation activity throughout their global supply chains. By providing capabilities such as fleet management, operational planning, and logistics network modeling, OTM helps customers run their logistics operations more efficiently, reduce freight costs, and optimize service levels. In addition, by identifying the most efficient routes for delivery vehicles, OTM helps food and beverage organizations make a tangible impact on their sustainability goals.

Powered by the Internet of Things and supported with embedded AI capabilities, Oracle Intelligent Track and Trace helps customers gain multi-tier visibility into their supply chain networks. This helps customers to track and trace items of value for faster results, detect and resolve issues, and establish trust between trade partners.

Oracle was recently selected as a winner of leading industry publication Food Logistics’ 2021 Top Software & Technology Providers Award. The award spotlights software and technology providers that ensure a safe, efficient, and reliable global cold food and beverage supply chain. According to Food Logistics, these providers’ solutions provide traceability, visibility, and efficiency, which helps ensure that products move smoothly and safely across the cold food and beverage supply chain.

Learn more about Oracle’s solutions for the food and beverage supply chain.

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