Most of the world’s food is travelling thousands of kilometres through a complex distribution network often hidden from plain sight that’s leaving suppliers in the dark and consumers with inconsistent quality.
And then there’s the waste generated by supply chain inefficiency, costing the global food network trillions of dollars annually and the environment even more.
These were among key messages from supply chain expert Luke Wood during a presentation to delegates of the Asia Fruit Logistica ON virtual conference on Wednesday (18 November).
Wood described the exercise of moving food from point of origin to destination as the “epitome of a wicked problem”.
Wood said: “The factors leading to waste and inefficiency are so complex there is little chance of solving them all. The best we can do is manage them.
“What we do know for certain is that billions of dollars in wasted food, fuel, energy and other resources and costs is being generated every year because good decisions aren’t being made about the best way of getting food from point A to point B.”
The reason good decisions aren’t being made, Wood said, was because food supply managers were not informed about what their food was experiencing while in-transit.
In a nod to AgDay in Australia on 20 November, celebrating the contribution of agriculture, Wood said farmers were exceptional at increasing production rates, meeting quality specifications at harvest and improving returns via efficiency gains.
However, more work was required to deepen supply chain analysis so that quality was not undermined by poor handling beyond the farm gate.
Wood, who heads Australian supply chain intelligence provider Escavox, said he understood the reasons behind the lack of information.
“To make good decisions in the supply chain you need good data,” he said.
“Technology plays a role in achieving this but you also need to understand your supply chain first and understand your category and product and get all of that to align with your desired result. That gets incredibly complicated.”
Wood advised breaking down the steps to remove stress from supply chain analysis.
“A lot of the time, our clients are sitting well behind the start line, in that they don’t even know what decisions there are to be made.
“First ask, ‘what do I want to do’? ‘What decision am I trying to make’? What is it about my supply chain that I do not know’?”
He said there were three critical elements all robust supply chain monitoring must deliver: autonomous capture, continuous data and timely information.
“It has to monitor the produce from the very beginning, all the way through to the very end,” he said.
“If my product goes to a warehouse that I don’t even know exists, how can I expect to get that data? I wouldn’t even know where to start.
“The data therefore needs to be coming to me automatically with no touch or interference.”
Wood said data relating to time, temperature and location when married with knowledge about the supply chain network, the category and the product would start to inform food suppliers about the key decisions they need to take – operationally and strategically – for their produce to perform.
“Time and temperature are the biggest proxies for food quality across all categories, whether that’s meat products, fresh produce, dairy or seafood,” he said.
“And you must have location. You need to know where events, positive or negative have occurred. Once you know that you can then place it in context within the whole journey.
“That’s the point at which you are ready to pull the levers of change.”
Wood said exporters to the Middle East were using Escavox services to provide evidentiary proof of tight temperature control that was allowing for additional shelf-life days of chilled beef and lamb.
“We have clients sending product to Singapore who must be able to verify they have maintained temperature control to ensure their product is compliant, otherwise they risk stepping outside service level agreements,” he said.
“They are now looking at their supply chain operationally – ‘is my product good enough to land and be sold today’? – and strategically – ‘what do I need to invest in and where in my supply chain do I need to invest to ensure that I’m protected’?
“We also have clients who, when discovering they have an issue with field heat, have increased chilling capacity near their farms to forward-protect shelf life and quality days later in the supply chain journey when the product could be on the other side of the world.”