The food and beverage sector has been significantly challenged throughout the pandemic, with its supply chains having to rapidly adapt to the ongoing effects of the COVID-19 virus.
The pandemic has changed consumer behaviours, and this is having flow on effects on the food and beverage supply chain. Beyond this, other global trends, such as switching to healthier lifestyles, an increased focus on sustainability and the environment, and regulatory change, are also rapidly changing the face of food and beverage distribution as we know it. Thus, how food and beverage businesses respond to these changes will prove to be the critical indicator for their success during times of uncertainty both now and in the future.
Constant change in the food and beverage supply chain
When we think about designing supply chain solutions today, particularly in the food and beverage industry, we need to understand what the current trends are. Additionally, we need to plan how we can build a resilience to the impacts these trends are having, whilst still maintaining a high level of service. If 2020 and the pandemic has taught the food and beverage sector anything, it’s that consumer demand can shift instantaneously, and with this sudden change, suppliers, manufacturers and other stakeholders within the supply chain will have to react accordingly. The rapid changes in consumer behaviours have influenced what food and beverage manufacturers need to offer to the market and the manner in how they deliver them to customers.
There has been huge growth in online distribution as a result of more people turning to online grocery orders due to lockdowns or to reduce the risks associated with being in public spaces. Reflecting on the last year, food and beverage businesses in Australia have also had to deal with significant supply and market cost fluctuations due to other external influences from droughts, floods and bush fires.
What do these market changes mean for today’s food and beverage sector?
The pandemic has highlighted a range of supply chain issues, including sources of material supply, inventory shortages, labour safety, labour retention and movement limitations.
At the same time, Australia stands on the verge of a significant and rapid escalation of food and beverage distribution channels. While this introduces new opportunities for the industry, it also applies further pressure on existing supply chains to distribute in smaller, faster lots or deliver directly to the front doors of consumers.
In response to the step change in online grocery orders, Australian grocers are embracing and rushing to improve their existing infrastructure to support new online models. including the biggest challenge of last-mile delivery. There is now an accelerated pressure on suppliers to keep up, and when they can’t, there are slower response times and delays in the fulfilment and delivery process, impacting customer and end-consumer satisfaction. Pioneers like PepsiCo are embracing the potential of online and piloting the Dematic Micro-Fulfilment solution, small, compact automated order fulfillment systems that can be located in dense population centres close to customers to optimise online orders for last mile fulfillment.
Resilience will be the only way forward
The volatility of the COVID-19 crisis, along with its influence on consumer buying behaviour, has clearly illustrated how difficult it can be to cope with rapidly changing or increasing volumes.
These issues will continue to have far reaching effects on many businesses in 2021 and beyond, encouraging them to consider alternative solutions on how to handle these challenges with greater operational flexibility, greater system scalability and with improved supply chain capabilities. Adaptability will become a critical differentiator in the competitive food and beverage market. As these challenges and opportunities filter through to the supply chain environment, now is the time for smart businesses to reassess, revaluate and restructure their resources and strategies to optimise their operations.
Changes to the market landscape means changes to the way we do business
As these factors redefine the food and beverage sector, how businesses react to them will be the crucial differentiators between upscaling operations and streamlining services or being overwhelmed by the pressure of demand.
As we continue to learn more about how these changes translate into daily challenges for the food and beverage supply chain, businesses need to turn their attention towards seizing the opportunities for business growth and improved productivity with the help of new automated solutions. The move towards high-speed, high-volume, complex operations have now reached their limits within the traditional supply chain environment, which is now driving more businesses to consider a better means for fulfilling demands and expectations with automation.
Innovations to streamline operations for a proactive food and beverage supply chain
The good news is that there are various automation technologies that can increase the resilience and flexibility of food and beverage operations and reduce labour costs. Automated Pallet Storage and Retrieval Systems (AS/RS) provide high-density, high-capacity storage for pallets in a fully automated way and at an extremely high speed. With an ASRS, stock cannot be lost or forgotten, as the system provides complete and real-time visibility of overall inventory.
Another solution that helps to provide complete automation of transport as well as storage and retrieval processes is Automated Guided Vehicles (AGVs). AGVs are purpose built for any environment – ambient, chilled frozen, production, warehouse – and ensure maximum workplace safety and impeccable accuracy, all while maintaining the flexibility levels of manual systems. Redeploying AGVs to different locations is also possible, and by using laser navigation, adjusting pathways can be easily modified.
Likewise, technology such as the Dematic Multishuttle Meat Buffer Storage and Handling system is another innovative solution built for food and beverage warehouse environments, providing advantages to post-production distribution, palletising and despatch operations. As this solution is purpose-built to operate in refrigerated and sub-zero environments, it provides businesses with the flexibility to keep warehouse operations moving without compromising the safety of employees. Additionally, the Dematic Multishuttle Meat Buffer Storage and Handling system has proven its flexibility to accommodate a wide range of carton sizes across multiple temperature environments and provide high-throughput mixed case fulfilment. Its inherent system redundancy, combined with its excellent storage density, makes it a very applicable automation solution to many food and beverage markets.
These advanced automation technologies break the paradigm that a truly flexible solution can only be possible with a manual environment. As the latest generation of automation solutions are more flexible and modular to better address the requirements of today’s food and beverage supply chain, they exist as a fundamental aspect for innovating supply chain operations and building the resilience to withstand whatever the lies ahead.
