Safeguard Your Supply Chain Against Future Upheaval

Supply Chain as Puzzle Pieces

Before COVID-19, consumers didn’t need to think much about the food and beverage supply chain. If they wanted a product, they went to the store and almost always found it. Nowadays, though, with toilet paper still in short supply and favorite foods continually out of stock, many are realizing for the first time that there are many steps are involved in getting products onto retail shelves and into their carts—and that a global pandemic can mess everything up.

Food and beverage brands, on the other hand, have never had the luxury of ignoring the supply chain. When new entrepreneurs enter the space, they get a hard and fast education on the complexities of the system. However, once they find ingredient sources, score distribution deals and land retail accounts, they might assume that because everything is working like clockwork now, it will continue to. This may lead them to focus their attention elsewhere and pay their supply chains little mind.

Big mistake, which many entrepreneurs have learned the hard way through COVID-19.

But even without the pandemic upending the normal availability and movement of goods, taking supply chains for granted has never been wise. It’s never been something food and beverage brands or even farmers could afford to overlook. The system is designed for continual high output, and it’s rigid, disjointed and ill-equipped to respond to massive disruption, as Brad Rostowfske, founder of Raise the BAR Innovation and director of industry growth at FaB Wisconsin, explains in the latest Edible-Alpha® podcast. So it wasn’t a matter of if a major event would throw everything out of whack—it was a matter of when.

Although Brad is working with key stakeholders to reconstruct the supply chain to be more collaborative, flexible and functional despite curveballs, for now, food and beverage brands must work within the system we’ve got. Which means the onus remains on you to keep a constant close eye on your value chain and take proactive measures to prepare for potential future disruptions. Here’s how:

  • Map out your entire supply chain. Many food entrepreneurs can quickly rattle off which ingredients they get from certain suppliers or where their packaging comes from. But if you haven’t yet done so, sit down and sketch out every source and step in detail to provide a comprehensive picture of the entire chain.
  • Forecast demand. In the midst of a pandemic riddled with unknowns, it can be tricky to predict demand for your products and the ingredients needed to manufacture them. But give it your best shot based on pre-COVID patterns, current market dynamics and expected near-future trends. This will give you a sense of the inputs you’ll need to access and the outputs you’ll be asked to deliver going forward.
  • Identify risk areas and potential disruptions. Beyond the coronavirus-wreaked havoc, think about other possible causes of supply chain snags. For instance, floods, droughts and other extreme weather events can destroy crops and create shortages of certain ingredients. Tariffs could impede exports. An ingredient supplier could go belly up. Prices of key product components could skyrocket. Figure out where your greatest vulnerabilities lie.
  • Craft contingency plans. Should a major disruption to your supply chain occur, what will you do about it? Have you researched alternate ingredient suppliers and identified viable backups you can tap in a pinch? If processes or logistics break down, do you know how you’ll address them while keeping the train moving? Now is the time to figure this stuff out.
  • Track movement meticulously. Today, there is an abundance of supply chain management software and platforms to help food and beverage brands stay on top of their systems. Consider investing in these tools, or at least have a process in place to keep close tabs on your supply chain’s flow.
  • Hire dedicated supply chain personnel. Startup brands may not be able to afford a full-time supply chain guru, but if you can, strongly consider it. Also look into part-time contract help or ensure that someone on your team has a good grip on this area and can take ownership of it.

And now, our roundup of the best food and beverage finance news, events and resources from around the web…

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