KnowRisk: building trust, not competition, in food & drink supply chainsPosted 18 Feb 2022
In the food and drink industry, trust and collaboration, not competition, need to be built throughout the supply chain.
Lorraine During, Lead for Market Research, Digital Catapult
The food and drink industry must thrive as a cooperative network, including all business sizes, global locations and positions within the supply chain – not as a linear operation.
As the manufacturing sector’s largest contributor, with a supply chain structure that can be subject to unpredictable risk, the food and drink industry needs to take advantage of advanced industrial digital technologies (IDT).
Although it is easy to name the giants in food retail and production, the sector is dominated by small and medium-sized enterprises (SME) and when it comes to new technology, SMEs often have poor adoption rates compared to their larger counterparts.
These findings came from policy engagement sessions held to gain insight for the KnowRisk project, a solution that uses advanced technologies to help protect against supply chain risks and disruptions.
Responding to changing consumer demands
In recent news, the supply chain crisis has dominated the headlines, from the supermarket queues and empty shelves witnessed at the start of the COVID-19 pandemic to the ongoing transport bottlenecks exacerbated by the UK’s withdrawal from the European Union.
Despite assurances of an economic recovery, consumer confidence is still affected. In September 2021, a perceived fuel crisis caused panic at petrol stations, before headlines the following month reported the highest increase in living costs for almost a decade, with rising food costs being a significant factor. Then to end the year, post-Brexit labour shortages in food production, delivery and slaughterhouses even put the family Christmas dinner under threat.
Shocks to food and drink supply chains, although often on significantly smaller scales, are not new. As well as this, the industry is highly regulated, must continuously adapt to changing consumer demand and is often exposed to unpredictable risks – from pandemics, to conflict, trade wars and the growing effects of climate change – meaning that food and drink supply chains can frequently be under stress.
Through the digitalisation of the supply chain, the food and drink sector can reduce risks, increase efficiency and strengthen consumer trust.
Digital Catapult is part of the KnowRisk consortium, which aims to reduce the risk and impact of supply chain disruption using advanced technologies.
For the KnowRisk project to offer a beneficial solution, Digital Catapult led policy engagement sessions to examine the risks and strengths within the food and drink supply chain and identify any barriers to the introduction of new technologies.
Although the industry recognises an urgent need to assess the supply chain, it has been slow to adopt advanced technologies. However, any risks or benefits must be considered throughout the whole industry and accurately reflect a mix of company sizes, global locations and positions within the supply chain.
Compared to large organisations, there are different barriers to adoption for small and medium-sized enterprises. With fewer resources than their larger counterparts, SMEs may not consider existing or proposed solutions on the market to be affordable or easy to use, while larger companies may be concerned with legacy systems or difficulties in interoperability.
Increasing collaboration over competition
The food and drink industry must promote trust and collaboration throughout the supply chain, where solid professional relationships are vital in mitigating risk.
While competition is natural in business, cooperation and communication between parties in the food and drink supply chain can influence positive change, increase visibility within networks and strengthen the industry.
With digitalisation, organisations can collaborate in real time within a network, rather than through a traditional linear supply chain.
Although the food and drink industry is lagging in the take up of advanced technologies and heavily dependent on manual processes compared to other manufacturing subsectors, it has begun to use robotics and basic automation methods to supplement manual labour, which could be recognised as a precursor to digitalisation.
Integrating any new technology requires investment, training and resources, but with collaboration, early adopters can show the benefits to the rest of the industry and initiate a digital transformation that can trickle down throughout the supply chain, instil trust in the solution and collectively reduce risk.
Digitalisation presents many opportunities for the food and drink sector, including improved planning and forecasting, lower costs and a boost in productivity, efficiency and profits.
In conclusion, feedback on the proposed KnowRisk solution suggested it could support these goals for digitalisation. For the food and drink sector, extended visibility and increased collaboration could improve efficiency, reduce the risk for all parties throughout the supply chain and win back consumers’ trust.
Collaboration is also central to transformative change. The insights from policy engagement sessions underscored the importance of cooperation to overcome any barriers to adoption by demonstrating the benefits of advanced technologies while supporting other parties within the network.
To find out more, download the KnowRisk report here.
To read about the work Digital Catapult is doing on the Digital Sandwich project, to improve reliability and traceability in food manufacture, click here.
Two thirds of manufacturing leaders will focus on making their supply chains more resilient in 2022.