The Coronavirus disease (COVID-19) pandemic highlighted a number of underlying issues with America’s supply chains, but perhaps the clearest was the fragility of the food supply. Problems in America’s supply chain spell problems for food supply, leading to waste. If buyers or logistic providers are unavailable when a processing plant has produce ready for transport, they may be forced to dispose of food rather than risk it spoiling. We are in the midst of an unprecedented supply chain malfunction. As the food supply chain became more globalized in recent years with countries relying on one another through a more intricate and interconnected network, the imbalance caused by the pandemic shone a direct light on the immediate need to correct this antiquated process.
U.S. supply chains are antiquated, and that has implications for everyone’s dinner tables if we cannot produce a regular cadence of supplies. Traditional methods of managing supply chains are untenable in our modern world. To get granular, analysts are overburdened with data, causing them to suffer from data analysis paralysis. Resulting slow reaction times and large swaths of data to analyze impact companies’ ability to deliver produce and canned goods to the end user.
On a broad scale, these inefficiencies manifested themselves in the COVID-19 pandemic. When meat processing plants implemented government-mandated COVID-19 distancing restrictions, they were unable to maintain pre-pandemic production levels, and the complex network of suppliers, consumers and carriers was immediately thrown into chaos. While individual demand for grocery staples skyrocketed with consumers cooped up at home, at the same time, restaurants shuttered and their large food orders ceased. The supplier and buyer relationships were out of sync. Farmers who sold to restaurants, hotels and schools no longer had a buyer, while grocery stores didn’t have access to the suppliers as they needed to buy more products.
As the disruption trickled down to all players in the supply chain, how could it have been mitigated? Manual data analysis and logistics management maintains the inefficiencies that keep goods off of shelves. The implementation of machine learning and artificial intelligence (AI) could ease the burden of individual analysts and allow supply chain managers to plan for longer term strategies, rather than fighting every little fire that crops up when the supply chain balance is disturbed. To truly solve the antiquity of the supply chain, more than just incremental shifts are needed to improve — the supply chain needs a full paradigm shift.
The Solution: A supply chain paradigm shift
Supply chains comprise an interconnected network of buyers, sellers, transporters and consumers. But, the complexity relationships between each party prevent adequate responses to changes or issues in real-time. By the time a problem is identified within the supplier, consumer, or carrier cog of the supply chain wheel, it’s too late. The impact has already rippled across to all other players in that supply chain, causing new problems.
Businesses have eyed digital transformation as the means to reducing supply chain inefficiencies, but it’s not enough to merely displace the same, mass amounts of data somewhere else for manual analysis. As humans just aren’t quick enough to gather, analyze and act on supply chain data in real-time to mitigate issues and inefficiencies, technologies like AI are the only solution. With AI, machines take over the decision-making process, evenly weighing the needs, supplies and logistics of each of the supply chain parties to find the most efficient process and solution.
With a supply chain that manages itself, buyers, suppliers and logistic providers can operate at a steady, efficient cadence:
- Shipper. Trucks are used more efficiently, meeting the needs of transport for suppliers and delivering canned goods and produce to consumers as store supplies warrant.
- Supplier. Food processing plants are better able to understand and anticipate changes in demand, and can adjust their schedules and workflow accordingly.
- Consumer. A more agile supply chain will reduce ebbs and flows of food supplies, reducing panic buying and overstocks.
Had America’s food supply chain network been equipped with advanced AI when COVID-19 hit, many of the pain points experienced by shippers, suppliers and customers would have been eliminated. Using the meat production plant example, suppliers could have re-directed meat intended for restaurants and hotels to grocery stores. That shift in goods and their final destination would have been communicated to shippers responsible for transporting the food, filling the bare grocery shelves. And, the change in customer demands for more at-home cooking supplies would have been anticipated and production could have shifted to meet those needs.
COVID-19 shone a bright light on our supply chain inefficiencies. Automating our supply chains would reduce churn, increase efficiency and help reduce unexpected costs when the supply chain is disrupted. To build a more resilient supply chain for the modern age, there needs to be increased communication between all players within the food supply chain. Automation is the only true way to do just that.