Juandre de Jong is Senior Vice President – Products at RedCloud. He is an astute business leader with 20+ years’ experience in business strategy, product management and digital execution in emerging markets. He was previously at Vodacom, setting and executing the product vision and strategy for their lending unit, including their BNPL offer in Africa, prior to this he was leading the portfolio growth of African FinTech, Jumo.
Disruptions to the global food supply chain network are clear. From pandemics to geopolitical conflicts, the food supply chain industry is facing several repercussions and nations across the world are feeling the effects of this. What’s more, all economies are facing challenges too. Wealthier countries might be able to combat some of these but emerging markets and developing economies continue to face heightened risks of food scarcity and even potential famine in the worst-case scenario.
What’s more, as we become increasingly dependent on the global food marketplace, now is the time for food producers, manufacturers and government bodies to pull together to restore the food supply chain’s resilience. It won’t be easy, but technology can help to propel it into a much better position as this guide sets out.
Understanding the challenges in the global food supply chain
When we talk about supply chain, we’re talking about a range of elements, including production and logistics. With numerous factors and processes along the way, it means challenges are rife and can also be difficult to address without risks. That’s not to say they can’t be addressed, and often addressing such crucial issues is required to safeguard the full supply chain and also boost efficiency. This alone can increase profits for those involved in the making, producing and distributing of food as well as lower prices for consumers.
Current statistics show that the Fast-Moving Consumer Goods FMCG sector produces billions of products annually, which involves more than half a million manufacturers and at least 25 million distributors.
Despite this, the United Nations has reported that 200+ million people are on the verge of a food crisis as a result of inefficiencies in product movement as well as an inefficient and disjointed distribution process. FMCG brands have lost just under $2 trillion in sales due to inventory failing to reach the shelves. It cannot be denied that with effective technology rollout, this challenge would likely be combatted.
How technology can improve the food supply chain
In places like the US, Europe and the UK, where online shopping and quick delivery services are now commonplace, it’s hard to imagine a time when technology wasn’t in place. However, for many global food producers and emerging economies, this is still the case and has resulted in several harmful impacts.
For example, many are bound to a cash payment system, which is not only inefficient but costly too. It also lacks digital traceability, meaning businesses don’t have access to reliable tracing records, which can be risky and render them ineligible for credit. Moreover, without financial services or technology, businesses using cash payments don’t have the required data and information they need to make better-informed business decisions. This means they’re ultimately relying on guesswork, which could be hindering their growth and efficiency.
Technological solutions in the food supply chain industry
To create and maintain a resilient and truly secure food supply chain, there needs to be a swift and seamless movement of goods from manufacturers to retailers. As well as this, producers need real-time insights and information into customer purchase behaviour, their location, and demand information. The solution for all of these factors lies within technology, which will not only provide businesses with visibility but allow them to be responsive, too.
It’s clear that significant e-commerce organisations currently dominate the supply chain, having used technology and developed distribution channels that are specific to their needs. Unfortunately, this has also meant that smaller distributors cannot access the goods and tools they need. But with the right technology, such as artificial intelligence and machine learning, all food producers can gain access to the services they need while learning to optimise and improve their operations. A combination of these processes will also mean they have the data required to make informed decisions, which will allow them to stand tall on the global stage ultimately.
It can’t be denied that to do this effectively, everyone in the supply chain must have access to open-source technology.
Technology, the supply chain and external threats
The global food supply chain faces several threats only exacerbated by global health scares, geopolitical threats, and driver shortages. But we have the potential to mitigate all of these risks with technology. Indeed, the right technology could enhance visibility across the entire global supply chain, offer actionable insights, provide access to credit and allow for easier and more streamlined financial transactions. In fact, with the combination of open commerce and artificial intelligence, the global food supply chain could be transformed and be better equipped to meet its role in supporting global food security.