SugarCreek: Brandworthy Food Solutions

Why Food Supply Chain Systems Aren't as Good as They Used to Be

Posted by Lance Layman

Jan 6, 2016, 3:37:00 PM

food_supply_chain

Do you ever feel that, despite many advances in supply chain management tools, keeping up is harder than ever? It's not your imagination. These days, most businesses are wrestling with a combination of modern and legacy systems that don't always mesh as they should. The result is inefficiencies, delays and other frustrations. Newer food supply chain technology brings hope for a supply chain that is more cost-effective and efficient than ever before.

The Trouble with Legacy Systems

Like a system of pipes that backs up at its narrowest point, a food supply chain is only as efficient as its least efficient element. When you are tasked with supply chain management, it's important to ensure that every area that you have control over is working at its most efficient.

When it comes to obsolescence, there are two senses of the word: functional and economic. Economic obsolescence is easy to determine. It occurs when an object has reached the end of its depreciation schedule — the point at which it is considered, under the tax code, to be at the end of its useful life. An item that still operates and is not yet economically obsolete can still be functionally obsolete if it is keeping your company from being as efficient and competitive as possible. The trick lies in recognizing when equipment has become obsolete because it is slowing down your operation as a whole.

But making the move to newer technology can be painful. There are costs involved in updating equipment. Often, replacing one item means replacing a whole system of complementary items, as well. Plus, it can be difficult to keep your in-house technologies completely in sync with the ones used by your suppliers. According to experts, adoption of technology tends to follow an S-curve: a few adopt at the beginning of the curve, most in the middle and a few stragglers near the end. It pays to be an early-adopter, but not so early that you do not properly predict which technology will be dominant or that you wind up out of step with others you work with in your industry. To make sure you make the right changes at the right time, it pays to keep up with the industry best standards and predictions.

However, there are also many cases where state of the art equipment can be integrated with legacy systems to make the transition less painful. By examining options one by one, you can see where you need a completely new system and where you can update what you have.

Help from the Internet of Things

Any new technology that allows devices to communicate and interact with one another has dramatic implications for food supply chains. With two-thirds of supply chain directors naming big data analytics as a factor that will revolutionize their organizations, the Internet of Things may just be the biggest innovation yet. Remote wireless devices will allow items to communicate information, leading to massive amounts of valuable data from all along the food supply chain, including:

  • Data about the locations of deliveries and whether they are on course and on-time.
  • Information that confirms that perishables have been kept inside their acceptable temperature range throughout transportation.
  • Information about the use of equipment; we will be able to tell at a glance which assets are being overused and which are lying idle and should be redeployed for another purpose.
  • Data about warehouse inventory to avoid over-ordering and backorders of necessary items.

By adding new technology to your existing systems and replacing outmoded systems, you can ensure that your business becomes as efficient as needed to continue to compete. With better supply chain management, you can improve your delivery speeds, reduce the cost of over and undersupplying, cut the risk of food-borne illness and make sure that you use every asset to its greatest potential.

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Written by: Lance Layman

Topics: Technology