Keeping It Fresh: How COVID-19 Has Shaped a New Path for the Food Supply Chain
The effects of the global supply chain disruption caused by COVID-19 are still rippling through every industry. From toilet paper to computer chips, new travel and trade restrictions and numerous production slowdowns have required that businesses completely rethink how they manage and maintain their relationships with supply partners. Digital transformation has largely emerged as the most effective coping mechanism for overcoming these stressors, with more industries than ever turning to machine learning, automation, cloud services, and artificial intelligence to adapt and survive under these new circumstances.
On a granular level, the pandemic exposed just how vulnerable the food supply chain is to outside disruption and volatility.
Massive inventory disruptions, coupled with the rapid rise of e-commerce and home delivery within the grocery industry, continue to influence and reshape the grocery supply chain completely. As a result, there has been a humongous proliferation of startups and technological solutions aimed at addressing these new industrial pain points, tackling everything from the consumer retail experience to quality control (QC).
A tech startup like Clarifruit addresses the biggest challenges in the management of production in the supply chain: freshness. Their mobile app, which is available on SAP Store, digitalizes and automates fresh fruit quality control with the goal of helping companies optimize their supply chain by developing global standards of fresh food quality.
QC inspectors at all points in the commercial produce journey, from growers to wholesalers and retailers, take pictures of fresh fruit which are then analyzed for a number of qualities by machine learning apparatuses based on customer recommendations. This analysis is then uploaded to the cloud where QC directors are provided a real-time overview of the data pulled from these inspections to evaluate and monitor the quality of their products over time. This type of operation can serve as an example for a variety of industries in the post-COVID world, from furniture delivery to raw materials from overseas. The continuous supervision helps to reduce waste across the supply chain and maximize profitability, a critical issue in the sustainability of the current commercial grocery system.
According to a study by the World Resources Institute, 40% of food waste happens with the supply chain before products even reach customers. Another report by ReFED, the nonprofit dedicated to fighting food waste, found that in the US, around $218B is spent every year to grow, process, transport and dispose of food that is never eaten. These massive costs are a strain on natural resources and are increasingly a concern for consumers, causing many organizations to incorporate new and improved sustainability practices into their business strategy to reduce waste. Digital transformation within supply chain management can make distributors more responsible environmental custodians by helping them to identify where, how, and why waste occurs, creating targeted solutions to address these challenges.
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The implications of developing a global digital database to better manage quality control along the supply chain are vast. One of the major benefits is the standardization of visual quality and other factors that reduce the subjectivity and human error related to the traditional means of QC inspection.
For example, by automating this manual process through machine learning and artificial intelligence, customers have seen an up to 300% increase in inspector productivity. Real-time, accessible-anywhere reporting, and analytics will empower stakeholders along the supply chain to make more data-driven decisions resulting in less waste and fewer rejections. Businesses are better able to allocate their QC resources, change their logistical considerations, how they package products or any myriad of solutions to address disturbances efficiently and effectively.
Another benefit of this digital revolution in the supply chain is the ease of integration with existing tools and platforms. As business technology becomes smarter and more efficient, QC assessments for the supply chain will become more effective, leading to an exponential increase in accuracy over time.
Empowering businesses to improve their QC processes through automation will have a significant impact on the state of the global produce industry, ideally reducing waste and resource strain by aiding in the development of new standards and best practices for produce production, transportation, and storage. This will in turn benefit all stakeholders, large and small, dramatically expanding opportunities for growth within and outside of the supply chain.
The fragility of the globalized marketplace was irrevocably exposed last year, further emphasizing the need for intelligent tools that digitalize more processes and help ensure greater enterprise agility.
Companies cannot only focus on issues related to the end customer experience, such as expanding e-commerce or addressing logistical issues. Solutions that address longstanding needs within the global supply chain – or other similarly large, complex systems – need to be built, expanded upon, and embraced to keep companies marching towards the future – and avoid the detrimental effects of another global disruption.
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