Supply chain threats come in a number of formats and target various sectors of the supply chains. This is part one of a five-part series by Marina Meyer of Food Logistics.
Even though many of today’s cold food chains continue to face the same disruptions, bottlenecks, challenges and threats they’ve been facing over the past 2-3 years, understanding and overcoming such threats will help companies achieve some stability.
2022 saw a lot of instability within the supply chain. From port strikes and rail strikes to inflation, driver shortage and more, industry experts predict it may take supply chains close to 2-3 years to turn around.
Let that sink in… 2-3 years. Thinking back to when Covid-19 first hit the United States, it’s been 2-3 years since, and look at how much the supply chain has changed, grown and evolved.
Case in point: Pre-pandemic research from the McKinsey Global Institute found that on average, companies experience a disruption of 1-2 months in duration every 3.7 years.
In an outline of the Top 5 threats set to impact supply chains in 2023, here is no.1:
Lack of resiliency
If there’s one takeaway over the past few years, it’s that supply chains need to be more resilient, according to Patricia Riedl, supply chain lead in North America for Accenture.
“Being resilient means having the knowledge and tools to either predict or respond to disruptions – ideally both, and ideally within budget. The question is how to do this. A good start is identifying vulnerabilities across all tiers of the supply network with a supply chain resilience stress test. Once these risks are identified, companies can work to build more resilient supply chains with greater visibility, or ‘intelligent visibility.’ This is a more cost-effective way to create more resilient supply chains – by combining structural and dynamic viability with artificial technologies and artificial intelligence. Companies with greater visibility are more likely to maintain revenue by serving demand during disruption,” adds Riedl.
In fact, a majority of companies are still struggling to build resiliency into their operations, according to a survey from Orbus Software. Although 89% of companies have experienced some form of disruption over the last two years, over half of enterprises are struggling to increase resiliency, with 44% lacking a dedicated team. Those enterprises that suffered disruption stemmed from staff shortages (56%), supply chain issues and increased business costs (48%) coupled with increasing technology costs (44%).
Plus, an unstable environment opens doors for higher risk potential. Moreover, this continuous instability continues to challenge the cold food chains in several ways.
“Supply chain instability has become an ever-growing pain point among food shippers, and yes, much of the problems arise from inconsistent labour. Reliable real-time data is more key now than ever to minimize the bullwhip effect in organisations,” says Daniel Knauer, Midwest regional sales for Emerson’s cold chain business. “For example, retail and restaurant operators want to know when their shipments will be arriving and if those shipments were kept at the correct temperature throughout the route in order to meet their food quality and safety standards.”