Updated: Oct 17, 2022
How do you instill trust and maintain supply chain integrity?
Real time visibility, combined with verifiable, secure data can open up a world of possibilities for greater collaboration across food and drink supply chains – from manufacturer through to the supermarket. The benefits of knowing exactly what’s occurring, every step of the way, can be enormous.
If it hadn’t already been appropriated by Nessa, ‘Oh, what’s occurring?’ would be the catchphrase for the supply chains of our times. We desperately need to know where goods are, whether they are moving on time, whether they are being maintained in the right conditions – in transit or in storage, and whether they are still the same goods that were dispatched.
In the food and drink manufacturing and distribution chains these questions are particularly acute, at a level matched perhaps only by the pharmaceutical industry. As consumers, we buy what may come from a farm next door, or from a forest on the far side of the world. We’re asked to trust producers when they declare where ingredients are sourced and how they were produced, that they haven’t been degraded or tampered with in transit, that they are, given the transportation involved, still ‘fresh’.
Unsurprisingly, the food and drink industries are beset by thickets of regulation plus the added complication of import and export flows for each transport leg.
As supply chain managers, demonstrating the ‘integrity’ of each consignment is part of the job description. But what do we really know about where ‘our’ goods are and how they are progressing? Even if we do know, are we telling – indeed can we tell – the other parties in the supply chain what they need to know? If everything is going well, arguably nobody needs to know – but things don’t always go well even in the good times.
A question of supply chain visibility
Milestones and events are what matter. Both up and down the supply chain, the various parties – which may be a couple of dozen entities – need to know ‘what’s occurring’ if they are to respond to events and, ultimately not just protect their sales and revenue but feed the people. It’s a question of supply chain visibility – and surely that’s a given? Well, up to a point.
We have modern communications, real time monitoring, GPS, ever more sophisticated sensors for every purpose, but how far does vital information actually move, at least in a timescale that allows remedial action to be taken if something isn’t quite right?
The answer, unfortunately, is ‘not very far’. Consider a driver, with a consignment – it might be beef carcasses, it might be whiskey. Both of which are attractive targets for criminal activity, but leaving that aside, time is of the essence. Beef or other perishable products need to arrive in a particular condition within a time-frame constrained, among other things, by the recipient’s ability to handle the consignment. Spirits may be held in bond – there are space considerations. Unusual patterns of activity may flag up to the excise people if, for example, the export consignment doesn’t ship on the vessel it was booked for. The ability to see that the sailing was missed helps alleviate their concerns.
Our driver is detoured – does the haulage company know where the driver is? They may have tracked the driver as being off course but may not know why.
Even if the driver phones in and explains what is happening and the likely effects, how far does this information reach? It is human nature not to admit to a possible problem until it has become a reality. The driver may report to head office – but will head office report to the recipient, who is probably not their client? They may report to their supplier customer, but will the latter inform the destination distribution centre (DC)? And how do you rate the chances of the DC talking to the ultimate retail outlet, which is going to be short of these in-demand goods?
And even if a message gets from driver to haulier, to supplier, to DC, to the ultimate destination, it is quite possible it gets mixed up on the way – the note on the white board that says, ‘arrive at three’ is transmitted as ‘three hours late’. Aside from everything else, being able to show electronic, contactless proof of delivery is useful particularly as the wish to avoid paperwork has continued since the pandemic.
But at least someone, in this case the driver, knows roughly what is going on. When they are parked up for the night, however, they may not be aware of theft or substitution going on at the back of the lorry. An intrusion may not be obvious until the truck has reached its destination, and only then if the recipients are vigilant. An unsuccessful intrusion, that may compromise hygiene, or temperature regime, may remain undetected.
Major food incidents, such as the horsemeat scandal, undermine consumer confidence – and trust is hard to earn. So, it is essential for reasons of trust and, just as critically, for operational efficiency, that supply chains become more secure and joined-up.
Visibility alone isn’t enough – it takes collaboration
How would it be if all the data was made available, in real time, with alerts or warning flags if necessary, to everyone in the supply chain that needs to know? Not just to the next firm in the chain, in sequence, but to everyone in the chain – simultaneously. Take a serious example – a truck load of goods gets caught up in a ‘required time of arrival’ demand. Who needs to know, and why?
The haulier, obviously. The dispatching company because their load isn’t going to get through in time so it is likely they will be asked for a replacement, and that demand will ripple through that branch of the upstream supply chain to other manufacturers, ingredient suppliers, packaging suppliers and so on. The recipient, which might be a distribution centre, will need to know because they need to adjust their plans for the stock they have available to distribute. They may also wish to adjust the labour and resource they have allocated to a shipment that is not, now, going to arrive, or allocate labour for a replacement load that is going to arrive at an anti-social time in the morning. And someone really ought to inform the retailers that supply may be tight on this line for a while.
That is a relatively simple scenario – no missed ships or troubled customs. But even in this model there are multiple opportunities to mitigate losses and inefficiencies and take remedial action – providing everyone can see the current situation and act in anticipation. Importantly, we may be talking about a couple of dozen entities, including customs and border control, sanitation, vets and the like.
Real time visibility from a digital reflection
How hard can that be? After all, a lot of the tech is already deployed – from tachographs to GPS devices, tamper-proof (or at least tamper-reporting) seals and so on. What they need is some joining up. That is what Atamai Freight, a product from Digital Trader Services (DTS), is offering.
Atamai creates a digitally mapped journey, in real time, which can then inform stakeholders so they can take action to mitigate risk or optimise situations in a way they can’t today. It uses distributed ledger/blockchain technology to instill trust. That matters because there not only needs to be assurance that loads haven’t been tampered with physically, but that their ‘identity’ in the fullest sense hasn’t been interfered with.
The result of this digital innovation is a system which, subject to role-based access rights, gives every partner in a given supply chain not only real time visibility of where ‘their’ goods are – whether or not they still ‘own’ or ‘have custody’ of those goods – but also what is happening to them, what unplanned events are occurring that may require a reaction, and so on.
End-to-end visibility, security, traceability, and at the end, the means to instill trust that our consumers want is finally here and it will improve efficiency, collaboration and, ultimately, impact positively on the bottom line. It’s time to act now on your supply chain.