There is a pressing need around the world to prioritize the optimization of food production systems by reducing inputs, maximizing yields and profits, and ultimately, minimizing greenhouse gas emissions. Coronavirus pandemic aside, balancing the timely movement of food has always been a complex issue for global supply chains, which stems from a mix of short expiration windows for dairy, meat, and produce, added to overhead costs for specialized, temperature-controlled storage and transportation, plus border inspections and tariff duties. This results in producing very small profit margins for the industry when everything works – and big losses when just one single element fails.
During the lockdown the world experienced in spring 2020, the food logistics sector experienced a significant distortion between supply and demand. However, there was no actual shortage of food supply; farms were producing, and warehouses were full – and consumer demand was higher than ever. Yet, people struggled to find the bare necessities due to panic buying. Homes, grocery shops and even food banks saw a huge spike in demand, while the bulk of orders that normally came from restaurants, hotels, businesses, and live event catering nearly evaporated overnight.
The sector faced other supply side bottlenecks in the value chain from farm to consumer. The industry’s logistics concerned with packing, storage, and final delivery were hit by a shortage of both workers and replacement parts for worn and damaged equipment. Both shortages were and are to this day secondary effects of the current health and safety requirements. Although the industry did cope and recover from experiencing altered end points, the threat of continued disruption and further lockdowns is looming. The need to pivot quickly is once again rearing its ugly head and many companies will be turning to custom built digital solutions to assist them in targeting specific chokeholds to ensure the food logistics industry doesn’t experience similar issues to that of earlier this year.
Extend digital solutions throughout the value chain
In the last decade, researchers specializing in “Ag Tech” have made significant headway leveraging drones, robotics, AI, and IoT sensors in the field to optimize agricultural resources such as water, fertilizer, and other inputs while maximizing acreage yield. However, this has led to significant food waste because farmers have struggled to adapt to packing potatoes in 50-pound boxes or 2,000-pound bags to the smaller sizes sold in supermarkets.
The solution is to build upon the technology already used by farmers. Software tools can extend and integrate disparate systems so that other specialists in the supply chain can quickly share real-time data and insights. For a farmer, this can mean the difference between locating a supplier with the right packaging equipment versus letting food go to waste.
In the field and on the road, data-gathering technology should be improved, too. Mobile devices, when used by field operators, need to support offline use or work in locations where internet connectivity is unreliable. Companies should be able to track the movement of food commodities and monitor spoilage at every stage of transportation, from field to storage to delivery at the loading bay or to the consumer. This increased visibility enables quick, targeted responses and troubleshooting in the case of unforeseen disruptions.
Devise a nimbler food supply chain
To ensure food security for consumers, logistics providers should leverage predictive analytics and AI tools to enable sophisticated capacity planning. Consider Amazon’s pioneering example of scouring user orders, big data, and geographically relevant business intelligence to anticipate the likelihood of future orders and stock its regional warehouses accordingly to optimize speed of delivery. Food logistics providers can deploy similar AI-enabled tools and data analytics to flag potential surges in consumer demand and direct commodities to warehouses accordingly. The same application will enable truckers and fleet operators to maximize the freight volume of each container.
Agile, optimized responses to route changes—caused by congestion, unexpected demand surges, or fragility of perishable contents—is another strategic need for transportation logistics. Empowering drivers using handheld mobile devices with visibility into back office ordering and billing data or inventory management will enable delivery personnel to execute changes in real-time, reducing supply chain bottlenecks. Such data-driven tools (should also be available to third-party contractors. After all, it is often third-party carriers that deliver the goods to the customer, instead of the farmer themselves. A bad experience in that final mile will impact the reputation of the seller, even when it was handled by a third party. Better access to data would enable them to troubleshoot in real-time and avoid disappointment when the customer receives the goods.
Deploy new apps to enable social distancing
Though required by contract, signatures on freight receipts or bills of loading have become difficult to obtain with limited in-person interactions. Companies can avoid fraud and liability by creating digital “proof of delivery” applications. Mobile apps that tie-in photos taken by a mobile device with a delivery truck’s GPS location tag and timestamp can serve as a digital receipt. By adding blockchain protection to the mobile application, companies can create a secure digital ledger for tamper-proof verification.
Use software to stay ahead in a volatile economy
The importance of leveraging technology to extract operational efficiencies, apply customized solutions, and deploy data-driven innovations need not overwhelm food logistics providers. Today, the widespread market acceptance of robust low-code software development platforms has enabled cost-effective collaboration between sourcing managers, procurement specialists, logistics operators, and IT professionals. Visually driven, low-code development platforms simplify the creation of digital solutions and speed up the development and rollout of g new apps for fast impact and ROI – something the industry needs now more than ever.
Effective communication to enable real-time responses to changing conditions is the key underscoring each of these digital solutions. The market is hungry for providers to fill these gaps in their existing systems. There are tools and skills available to move beyond these instances of hoarding and fear, and return to the long-cherished conditions of plentiful choice and high-quality produce.
Nick Ford, Chief Technology Evangelist, Mendix