- THE MAGAZINE
Retail food supply chains are constantly evolving to address global challenges and meet consumer demands, making it more complicated than ever to manage their components and stakeholders. Needless to say, with this complexity comes vulnerability.
Here are three key vulnerabilities in today’s supply chain:
Communication breakdown. It may sound simple, but most key stakeholders do not know all of the entities involved in their supply chains. They may know the vendors they work with directly, but they don’t know the folks further down on the supply chain and they have no insight into how they comply with industry rules and regulations.
Think about it. If you were asked today to identify all the players within your supply chain, how long would it take you to gather that information? Hours? Weeks? In the case of a recall, retailers and manufacturers need to ask themselves, “Do we make or sell any products that could be affected?” Can you answer that question with confidence?
The No. 1 vulnerability facing today’s supply chain is a lack of transparency or visibility into the full system and all the documentation that comes with it. Stakeholders who do not know the manufacturers, processes and ingredients within a supply chain cannot react quickly to crisis and take measures to avoid those risks. Furthermore, they cannot communicate about industry information and prices, and therefore miss out on process and cost efficiencies and improvements. It’s a serious problem that seems so simple to solve, but as products and their origins become increasingly global and complex even on a national level, the possible problems that arise within these networks only magnify. Supply chain stakeholders must find ways to collaborate and communicate more openly and effectively.
Slow response times. If supply chain managers don’t know what’s happening both inside and outside of their organizations, it’s nearly impossible to mitigate risks and address issues as they occur. Retailers that have full visibility into their supply chains can react in a matter of seconds, but in reality it takes most groups days and maybe even weeks to identify a problem, alert partners and share appropriate levels of information with the public. These delays can exacerbate the problem and erode consumer confidence.
As consumers become more aware of product origins and ingredients, product responsibility is being shifted to brand owners and retailers. When problems arise, consumers look to the top of the food chain for answers. Gone are the days when brand owners or retailers could rely on a supplier or manufacturer to alert them to recalls or regulatory changes. It is the “seller’s” responsibility to understand and protect the supply chain.
The only way to ensure the security of your supply chain is to exchange information freely and to have processes in place in the event of an unfortunate situation. If you know who all the players are and can pinpoint the issue quickly, safety concerns can be mitigated and customer loyalty and food safety can be maintained.
Mobile and social access to information. As consumers demand more and more product information, many brands and retailers are delivering that information into the palms of consumers’ hands with QR codes and apps. In fact, mobile technology has become an extension of the product label, and consumers expect to be able to access that additional information and communicate about products on social channels. Brands that don’t deliver on that—or do so poorly—open themselves up to consumer loyalty vulnerabilities.
Let’s face it, supply chain information on mobile devices is still in the Dark Ages. The industry has a long way to go internally before it rolls out all the mobile and social bells and whistles. However, as food brands and retailers provide more product information via mobile devices, they can expect consumer confidence and loyalty to increase simultaneously. Again, much of this hinges on access and visibility into the full supply chain, but organizations cannot ignore the benefits they will experience from extending some level of product lifecycle intelligence to on-the-go consumers via the internet.
And, while consumers may not be able to acquire full and immediate visibility into the foods they are buying, retailers should keep in mind that consumers can and do communicate out dissatisfaction with if they feel that the product is compromised in any way or if it does not live up to their expectations. Within seconds, consumers are using social media to instantly communicate to thousands of other consumers their level of satisfaction or dissatisfaction with a product. Retailers often times take a reactionary approach to this instantaneous mass dissemination of information. It’s becoming increasingly more critical for the retailer to take a proactive or immediate response if needed. Without the real time understanding of their full supply chain, retailers can suffer from delayed responses from a lack of visibility and insight.
The greatest supply challenges and vulnerabilities are framed in much of the industry’s inability to collect and share information in real time. First, stakeholders must exchange that data internally to ensure supply chain efficiencies and safety, and then they must find ways to inform, educate and alert consumers to facets of that information. Without collaboration and communication throughout a product’s full lifecycle—from ingredient sourcing to consumption—neither the brand owners nor the consumers can confidently move forward.