How to Overcome Supply Chain Disruptions

Some of the significant ways to overcome disruptions in supply chains are Labor and Logistics, Sourcing and Shipping, and Communication and Collaboration.

FREMONT, CA: In response to lower demand due to the pandemic, many food and beverage manufacturers and their ingredient suppliers pulled back operations and slowed production.

In lockdowns, some food suppliers and distributors focused heavily on retail and grocery chains, shifting capacity away from food service. Some suppliers were caught off guard when markets came roaring back in many areas. 

As a result of covid-19, almost half of all companies reported significant disruptions in their supply chains.

Here's how to overcome disruptions in supply chains based on the latest data and insights:

Wildfires and Weather: The perfect storm has been created by weather-related incidents. California's growing regions are suffering devastating droughts and wildfires, Texas is experiencing frozen pipes and power outages, and the Upper Northwest is experiencing historic heat waves.

The drought, heat, and wildfires in western growing regions have slowed production. It is generally true that fires haven't destroyed agricultural fields, but the ash and smoke in some regions have blocked the sunlight, stunting growth and, in some cases, altering the flavor of some crops. In addition, companies have been forced to reduce work hours and, in some cases, even evacuate workers from the region in order to protect workers from smoke and heat. This has resulted in some farmers having to destroy overripe crops.

Logistics & Labor: Labor shortages plagued food manufacturers and other manufacturing sectors even before the pandemic. Since the pandemic began, workforce issues have gotten worse. More than one-third (38 percent) of manufacturers had difficulty finding candidates before the pandemic. Two out of three employers (63 percent) say they are having trouble filling critical labor gaps, and turnover is up 15 percent.

In order to meet demand, some manufacturers are missing production deadlines or asking frontline workers to work extra shifts. With three in four companies expressing burnout as a concern, the potential negative effects of employee burnout and even more turnover are worrying. As a result, companies may have to raise prices or take a hit to their bottom lines as a result of higher overtime expenses. Maintaining workers' safety through social distancing, personal protective equipment, and other methods adds to the strain.

Quantity & Quality: During the pandemic, consumer habits and buying behaviors changed, reshaping the demand for some foods. Restaurants began offering limited menus to streamline their operations and minimize the number of ingredients they needed to keep on hand, and Americans returned to comfort foods and stocked up on nonperishables.

Takeout and delivery operations became the norm as prepackaged meals, frozen entrees, and ready-made food products became increasingly popular. Restaurants struggled to keep employees, paid more for packaging, and gave a cut of profits to delivery services. As a result, it became more challenging to maintain a product's quality and freshness throughout its lifecycle.

Purchasing and Shipping: As if finding food ingredients wasn't challenging enough, getting them from point A to point B has added to the challenge. Some industries are still feeling the impact of the Ever Given cargo ship incident in March 2021, which blocked the Suez Canal, an international trade gateway. Each day, more than $10 billion in global trade is frozen due to the hold-up of 400 other cargo vessels, including crude oil, livestock, grain, and dry goods.

It's not guaranteed that foreign goods will reach their final destination on time once they arrive at U.S. ports. A shortage of qualified long-haul truck drivers is forcing companies to raise pay to attract and retain drivers in the trucking industry, which moves about 70 percent of all freight in the U.S. As shipping and freight costs have skyrocketed, companies have had to increase prices.