SupplyChainTalk: Is there a silver lining to supply chain disruption?

On 19 April 2023, Supply Chain Talk host Alastair Charatan was joined by Shom Chatterjee, Executive Vice President (Head of Procurement & Logistics), ITC Limited (Foods Division); Soraya Karimi-Ghovanlou, Supply Chain Director, Smithfield Foods; Gary Nowacki, CEO, TraceGains.
 
Views on news

The Government’s plans for new food controls on all imported into the UK from the EU will cause shortages and drive up price inflation – according to the Cold Chain Federation (CCF). Major supply chain disruptions due to Covid and the war in Ukraine have been further aggravated by export bans on products such as palm oil (Indonesia) and sugar (India).

 

Prior to regulations, meat could be imported into the UK by merely filling in one form. Now, a truckload of food products may require as many as 150 pieces of paperwork (often including ESG-related certificates). As a result, major groupage companies have simply stopped doing groupage and only do full trucks to avoid excessive paperwork. Food is also the most fragmented supply chain in the world.  

 

Emerging protectionist trends include non-tariff barriers too, which, again, hinder global food trade. One of the strategies that food exporters are adopting is re-shoring and relying increasingly on local produce. As a result, the 10-20 thousand searches per month for new suppliers have increased to 50-100 thousand. 

Leveraging a marketplace for ingredients

Countries that started a reshoring program before the pandemic to give a boost to their national economies have been reaping the benefit since 2020. Small businesses are hit more by the new food regulations than large ones, many of them going under as they can’t pay for the increased manhours needed. Cloud-based service providers operating on an as-a-Service basis are making these services more accessible for small businesses and Tracegrain has launched a  free version of its Networked Ingredients Marketplace featuring 450, 000 ingredients.  

 

Digital technologies can help food suppliers monitor prices and buy in bigger quantities when prices dip. Food manufacturers can also inspire their suppliers to grow better quality produce adopting world-class technologies. Although companies need to pivot more than previously, established relationships with suppliers are still highly valued. 

 

The panel’s advice

Tracegrain’s network can help you find suppliers offering filters for quality, specifications and location. 

An alternative for the Tracegrain network for big companies is establishing their own portal that works as a directory of suppliers. 

Plugging into digital networks can shave off months from the concept-to-market process and they also democratise access to ESG data.