Today, businesses operate amidst a complicated and interconnected supply chain network where it becomes increasingly difficult to identify the right channels. Supply chain assurance helps validate the integrity and capabilities of the supply chains and adds a high degree of reliability that the concerned supply chain would suffice the market standards, including food safety and quality. This article explores the merits of assurance in supply chain outsourcing and the key factors associated.
Why is supply chain assurance necessary in the food industry?
Supply chain assurance solutions offer structured methods covering the key areas of concern in the global food supply chain, including security, quality, social and environmental responsibilities, and sustainability.
Supply chain assurance provides end-to-end risk management auditing, training, and technology solutions. These solutions driven by data analytics give a new perspective to the whole value chain, allowing organizations in the food sector to make informed business decisions. It also helps build a culture of committed suppliers who share and understand the brand value and identity. With the increased complexity of the food supply chain, it is no longer feasible for food businesses to undertake all supply chain assurance initiatives. This is why it is advisable to outsource the supply chain assurance solutions to a third-party vendor for high efficiency and expertise.
The COVID-19 pandemic wreaked havoc on the global food supply chain outsourcing system, forcing small to big enterprises in the industry to find immediate solutions. The importance of quality assurance in the supply chain was most well highlighted as it was vital to the growth and development of business expansion and operations.
Food organizations are looking forward to widening their geographical presence and accessibility even to small-tier cities, towns, and villages. This is primarily due to the surge in food demand in these places post the COVID-19 wave, where reverse migration from metros to small towns made people of these small towns get acquainted with the latest food trends.
Many food companies like Nestle, Heinz, Pepsico, etc., have tapped into the D2C market, especially during the COVID-19 lockdown, to ensure a steady supply of goods for people stuck at home. The pandemic had been a catalyst to propel significant D2C presence by prominent food businesses to align with the evolving customer needs.
There is a growing awareness of healthy eating, sustainability, and environmental responsibilities, including food footprint. This change in the perception of food has increased the demand for plant-based meat and milk, which is estimated to reach $162 billion by 2030. Also, the global organic food market is expected to reach $860,725.7 million by 2031, with a CAGR of 14% from 2022 to 2031. All these reasons insist on the importance of assurance in supply chain outsourcing to ensure committed delivery to the end customers.
In order to sustain and grow, food businesses must keep up with the quality standards of the food products and must implement quality metrics at every stage in their supply chain. Supply chain assurance helps bridge the quality gap and meet the optimal standards.
The growing demand for food has led to an increase in food manufacturers who supply finished products to FMCG retailers, Quick Serve Restaurants (QSRs), and other HORECA businesses.
It is pretty arduous to choose the right supplier for your business who meets your goals and quality standards with too many options. Supply chain assurance outsourcing enables your company to partner with the most suitable food supplier complying with the food safety and quality regulations. Supply chain assurance solutions also conduct inspections, quality control checks, and supplier audits to ensure your company doesn’t face the consequences of poor food quality and tarnish your brand image in the long run.
Demand-Driven Supply Chain (DDSC)
DDSC is when you create and modify your supply chain according to the customer demand signals. It is essential to scale up or scale down the inventory levels for high performance and reduced wastage to keep up with the fluctuating market demands. This meticulous task of controlling the supply chain is more manageable with supply chain assurance solutions.
The Department for Environment, Food & Rural Affairs (DEFRA) defines food product integrity as ‘The state of being whole, or undiminished, or entire, or in perfect condition.’ Food product integrity assures its consumers and stakeholders of the product’s safety, quality, and authenticity. Assurance in the food supply chain identifies and addresses the food integrity challenges through scientific and analytical methods and technologies like blockchain for traceability of the origin and adhering to the temperature sensitivity of the products. Thus supply chain assurance helps impart trust and transparency to the entire supply chain through its vigilant processes.
In the past, companies perceived supply chains as ways to reduce logistics costs alone. But today, there is a paradigm shift in this view where an efficient supply chain is more of a revenue enabler that enhances the company’s financial performance and helps meet the organizational objectives. The C-level executives of organizations must focus on nurturing the latest supply chain capabilities that give a competitive edge and enable business growth.
Identifying the latest food trends and quality regulations and understanding how they can affect your food business processes can ensure a boost in revenue and customer satisfaction. Leveraging technology to optimize processes and manage food supply chain assurance allows the outsourced 3PL partner to control the supply chain and maintain consistency. Supply chain outsourcing through a trusted and efficient 3PL partner like RK Foodland is no longer a mere activity within the business workflow but a necessity for overall growth.