Over the years, executing a risk mitigation plan has transformed from something that’s nice to have to something that every company must have, at all times, in all facets of the organization.
From the influx of cargo theft, cybersecurity threats, food safety and driver shortage to geopolitical tensions, strikes from rail/dock workers, natural disasters and more, even the smallest gap can pose serious threat to people, product and plant.
Liken it to the blind leading the blind, getting lost in a maze or driving while blindfolded.
Not being able to see ahead and predict and plan accordingly is what sometimes plagues many of today’s supply chain companies.
That’s why mitigating supply chain threats is of utmost importance heading into 2024.
Marina Mayer, editor-in-chief of Food Logistics and Supply & Demand Chain Executive, talks exclusively with Adheer Bahulkar, global supply chain lead for consumer goods and services, Accenture, about supply chain resiliency, the rise in cargo theft and what this all means for the future of supply chains.
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Food Logistics: What are some of the cold food chains biggest threats to date? And why?
Adheer Bahulkar: There are many challenges facing cold food chains ranging from weather shocks and staff shortages to inefficiencies in transportation and storage, to name a few. For example, we know a large proportion of food produced for human consumption is lost due to the lack of effective refrigeration.
Manufacturers are constantly dealing with the ripple effects of supply chain disruptions such as changes in consumption, adverse weather events and changing regulations and trade policies. It’s easy to see why this could leave them feeling they’re in constant ‘response mode’ to keep pace.
We are also seeing shifts in food consumption, with many consumers shifting preferences towards convenience and ready-to-eat food. This increases the demand for cold chains.
Food Logistics: 2023 saw a lot of instability within the supply chain, such as geopolitical sanctions, natural disasters, inflation, etc. From your vantage point, how do these factors impact/influence the way companies can mitigate supply chain threats?
Bahulkar: Resiliency is now table-stakes for supply chain, as the next disruption is just around the corner.
The future of supply chain management largely depends on the adoption of technologies in automation, IoT, AI and more in order to bring sustainability, visibility, and reliability to operations.
Along with alternative sources of supply and right-shoring, a combination of full value chain visibility combined with predictive analytics and read & respond capabilities are key for supply chain to mitigate the impact of disruptions.
We can expect resiliency in supply chain to become a critical advantage for companies enabling them to not only ensure business continuity but systematically gain market share as consumers increasingly rely on them through all disruptions.
Food Logistics: According to multiple sources, the average value of cargo stolen during reported events in 2023 was $214,104, equivalent to an estimated $223 million in cargo across 1,778 reported theft incidents. What can be accredited to the rise in cargo theft?
Bahulkar: While rising cargo theft is often attributed to inflation and rising prices, the larger root causes perhaps are quite structural. For example, the rise in ecommerce has meant that more cargo is spending time in warehouses and in transit. Other disruptions and bottlenecks, such as staff shortages or delays in transportation can also lead to more inventories being stuck in transit or sitting for longer in warehouses. This raises the risk of theft, not to mention lost sales.
Food Logistics: Labor disruptions are also substantially higher this year, up 136%, according to Resilinc data. This includes company and site-level strikes, national strikes, layoffs and labor protests, among others. What does this mean for the future of cold food supply chains?
Bahulkar: Labor disruptions and more importantly sustained labor shortages are expected to have a significant impact on future design of supply chains.
Demographic as well as socio-economic trends are resulting in a shrinking workforce ready for skilled labor in manufacturing and distribution and a high turnover becoming commonplace for many manufacturers.
What this means for future supply chains is two things: Rising wages as companies compete to fill the gaps in their workforce in the near to mid-term; and a gradual but steady shift to automation on the shop floors over the mid- to long-term.
CLICK HERE to read the article in full.
