Managing Tomorrow’s Supply Chain Today
The trend towards longer and more complex supply chains in the food and beverage industry is presenting companies with a new set of challenges. Technological and societal changes are leading to more intricate and flexible supply chains, with companies sourcing specialist products from across the world.
At the same time, the growing popularity of online shopping has put pressure on companies to become more competitive and faster in fulfilling demands. With design, sourcing, and manufacturing occurring at hyper speed, some suppliers have begun subcontracting to other factories to fulfil an order. Unapproved subcontracting is a significant issue, and organisations are increasingly being held responsible for the actions of their suppliers.
The food and beverage sector has been challenged by recent food safety incidents hitting the headlines, including E. coli outbreaks, the horsemeat scandal, and salmonella outbreaks. With legislation tightening, food and beverage recalls are almost certainly on the increase. It has therefore never been more important to understand the suppliers that are part of your supply chain and whether they operate to the required standards.
END-TO-END SUPPLY CHAIN VISIBILITY IS CRITICAL
Building a detailed understanding across the supply chain is essential to respond to shifts in consumer behaviour, understand who you are really doing business with, react to unpredictable weather patterns, or prepare for recalls.
To respond to the new business environment, companies should:
- Determine current production processes and incorporate them into the value chain map in order to align supply chain flows with the value chain components.
- Take time to map, understand, and assess the risks related to each component of the supply chain, categorised as a minimum by product/service, supplier, and geography.
- Implement a programme to identify specific commodities or sectors where forced labour or extreme exploitation are apparent.
- Hold reviews with your suppliers to ensure alignment with your organisation’s values and ethics.
- Undertake audits to ensure compliance to standards and provide guidance on best practices.
- Review procurement and due diligence systems and standards to ensure they are aligned with your obligations and train employees accordingly.
- Think of what contingency measures are available to ensure supply chain resilience and individual suppliers’ continuity.
- Engage with tier-one, tier-two and tier-three suppliers to be able to identify, assess, and exert control over the risks arising within these outsourced elements of the supply chain.
- Build relationships of transparency and trust with your suppliers and seek long-term strategic partnerships.
Greater scrutiny and understanding of those along your supply chain can go a long way to ensuring your competitiveness, reputation, and ethical standards are upheld, and the safety of your consumers ensured.