By Stephen Dombroski, Director of Consumer Markets, QAD

The intricacies of supply chain management are often underappreciated until a disruption occurs, sending shockwaves through global markets. In this involuntary landscape, two critical concepts, interruption and disruption, hold sway over the smooth functioning of food and beverage supply chains. Distinguishing between the two is imperative for businesses seeking resilience and agility in the face of uncertainty. 

Defining Interruption and Disruption

Interruption and disruption are not mere synonyms but represent distinct phenomena within the context of supply chains.

Interruptions are typically minor, short-term issues that cause temporary delays. Examples include minor equipment malfunctions, brief staffing shortages, or temporary supply delays. These events, while inconvenient, do not fundamentally alter the operations and can often be managed with quick corrective actions. While disruptive, interruptions typically have a shorter duration and lesser impact compared to full-blown disruptions. 

Disruption, on the other hand, signifies more profound and enduring disturbances that severely impede or alter the regular operations of the supply chain. Disruptions often stem from unforeseen events or systemic failures, such as pandemics, cyberattacks, geopolitical events, regulatory changes, or sudden shifts in consumer demand. Unlike interruptions, disruptions can trigger cascading effects, leading to prolonged delays, inventory shortages, increased costs, and reputational damage. Disruptions require comprehensive strategies and can lead to long term operational changes. 

Impact on the Supply Chain

Understanding the nuances between interruption and disruption is essential for assessing their impact on the supply chain and determining the appropriate corrective action.

Interruptions, though disruptive, are typically manageable with proactive risk mitigation strategies. Businesses can leverage contingency plans, safety stocks, alternative suppliers, or rerouting options to minimize the impact of interruptions. While these measures may incur additional costs, they help cushion the supply chain against short term disturbances and maintain operational continuity. 

Disruptions, however, present a more formidable challenge due to their scale, scope, and unpredictability. Unlike interruptions, disruptions often transcend organizational boundaries, impacting multiple nodes within the supply chain simultaneously. This complexity makes it difficult for food and beverage manufacturers to respond effectively, leading to extended downtimes, revenue loss, contractual disputes, and even business closure.

Strategies for Managing Interruptions

Successfully navigating interruptions and disruptions requires a proactive and adaptive approach to supply chain management, and any strategy should include:

Proactive monitoring and maintenance: implement a preventative maintenance schedule to reduce the likelihood of unexpected breakdowns and regularly monitor equipment to ensure top-tier functionality. By continuously tracking operations in real-time and addressing potential issues before they escalate, food and beverage manufacturers can ensure smoother workflows, minimize downtime, and maintain operational continuity. This approach helps in identifying vulnerabilities early and implementing timely corrective actions. 

Flexible workforce management: through cross-training employees and employing adaptable staffing strategies, food and beverage manufacturers can swiftly reallocate resources to critical areas. Implementing a robust communication system will also inform and reassign staff as needed. 

Ecosystem management: foster strong relationships with suppliers, partners, and stakeholders to enhance communication and coordination. This means to develop a contingency plan for quick alternative sourcing in case of minor supply chain interruptions, and to maintain a network of carriers and third party logistics partners to handle emergency deployments. This collaborative approach ensures better risk management, quicker response times, and greater resilience against interruptions for a more adaptable supply chain. 

Strategies for Managing Disruptions

Comprehensive risk assessment: the identification of potential threats and vulnerabilities is essential for helping food and beverage manufacturers develop targeted mitigation strategies. This includes evaluating geographical risks, supplier reliability, and technological vulnerabilities. Utilize scenario planning to prepare for various disruptions, from natural disasters to cyber attacks. 

Robust business continuity planning: a detailed business continuity plan (BCP) that outlines necessary steps of action in the event of disruption. An effective BCP should include communication strategies, roles and responsibilities, and recovery procedures. Make sure to regularly update your BCP to ensure effectiveness and the enablement to navigate crises quickly.

Invest in technology: implement advanced tools like predictive analytics, real-time monitoring, artificial intelligence (AI), machine learning (ML), and automation to enhance visibility and responsiveness. Have a sophisticated planning and scheduling system to perform quick "what if" analysis to replan and reschedule when necessary, and equally as importantly, ensure your business has an interconnected ecosystem without any communication silos. 

Diversify suppliers: it is essential to avoid an over-reliance on a single supplier or region. By sourcing from multiple vendors, food and beverage manufacturers reduce dependency on a single source, mitigating risks associated with supplier failures or regional issues. It is also important to establish strong relationships with suppliers and create mutual aid agreements to support each other in times of crisis. 

Build organizational resilience: foster a culture of resilience where employees are trained to adapt quickly to changes and challenges. By creating a culture of adaptability, continuous learning, and proactive risk management, food and beverage manufacturers can quickly respond to and recover from disruptions. During disruptions, make sure to encourage innovation and flexibility within teams to find creative solutions. 

Optimizing People, Processes, and Systems

Optimizing people, processes, and systems is paramount for combating supply chain interruptions and disruptions. By aligning workforce skills, streamlining operations, and leveraging technology, food and beverage manufacturers can enhance agility, efficiency  and resilience. This integrated approach ensures efficient resource utilization, quicker problem solving, and greater resilience, safeguarding supply chain integrity. 

People: continuous investment in training and development is essential to empower employees with the necessary skills to manage both interruptions and disruptions within the supply chain. A collaborative work environment encourages the open exchange of information and resources, empowering teams to address challenges collectively and devise innovative solutions. With this people-first approach, organizations experience resilience and strength in their overall capability to adapt to dynamic market conditions. 

Process: for supply chain resilience, it is imperative to streamline and standardize processes to ensure consistency and reliability across all operations. This involves establishing clear Standard Operating Procedures (SOPs) to address common interruptions efficiently. Additionally, implementing Lean and Six Sigma methodologies reduces waste and boosts efficiency, fortifying the system against disruptions. Investing in a robust Sales and Operations Planning Process, emphasizing financial metrics, further strengthens strategic decision making and operational agility. 

Systems: leverage Enterprise Resource Planning (ERP) systems to integrate all aspects of the operation, offering a centralized platform for monitoring and managing processes efficiently. Complement this with a robust IT infrastructure, including backup systems, to guarantee data integrity and availability even amidst disruptions, ensuring continuing operations. 

Ultimately, the distinction between supply chain interruptions and disruptions underscores the complexity of managing operational risks in today's interconnected global economy. While interruptions represent temporary deviations that can be mitigated with proactive measures, disruptions pose more significant challenges, demanding a strategic blend of resilience and adaptability. Regardless of the nature of the disturbance, being prepared is paramount. Investing in risk assessment, contingency planning, technology, workforce development, and supplier diversification enhances organization readiness to navigate unforeseen challenges. By following the advice previously presented, food and beverage leaders can navigate the turbulent waters and emerge stronger in times of uncertainty.

By: Danilo Potocnik, Head of Sales, Stoecklin Logistics 

When it comes to supply chain management, advanced technologies are playing a pivotal role in optimizing operational efficiency and ensuring regulatory compliance. In the food industry, recalls can cost food manufacturers millions of dollars and, sometimes, their entire consumer base. And, with government regulations like the Food Safety Modernization Act (FSMA), manufacturers and distributors are required to track and trace products from the moment it arrives in the warehouse, to the moment it’s purchased by a consumer. Additionally, in the pharmaceutical industry, distribution centers (DCs) play a major role in ensuring the safe storage of materials and supplies. 

Fortunately, technologies like Warehouse Management Systems (WMS) are offering a better way for retailers to gain real-time visibility into inventory levels, locations, and movements. An effective WMS will help warehouses and DCs manage inventory in a fast, easy, and efficient way and will harness the ability to track: 

1. Batches 

In the supply chain, everything is fast moving. Products are continuously being created and put on store shelves for consumers to purchase repeatedly. As these products move throughout the supply chain, keeping track of the inventory is critical, and an integral part of this is batch tracking. Batch tracking refers to the process of tracking a group, or batch, of similar items that were produced at the same time, by the same manufacturer, in the same facility. Typically marked with an identification number or date, batch tracking allows companies to easily identify and isolate any defective items, before the entire batch is sold and consumers are put at risk. This level of traceability is crucial for compliance and gives retailers the agility to act fast. And, because each batch can be precisely identified and monitored throughout its lifecycle, a WMS helps distributors reduce errors in picking, packing, and shipping. 

Further, the ability to track batches within the warehouse optimizes order fulfillment by helping distributors understand the characteristics of each batch to prioritize the allocation of stock based on factors such as production dates or specific customer requirements. The level of visibility a WMS provides into batch data gives retailers the insights needed to make strategic business decisions, including inventory reordering, storage allocation, and production planning. 

2. Expiration Dates 

The consumer demand for freshness is higher than ever, largely driven by fitness trends and a result of the pandemic. In response to these demands, grocers are having to put more products on the shelf, while still prioritizing safety and ensuring products are sold before expiring. And, in industries like pharmaceuticals, tracking expiration dates could be a matter of life and death. Luckily, a robust WMS system can help warehouses keep track of all the item expiration dates and helps keep expired products from being picked and packed. 

Additionally tracking expiration dates helps prevent excess inventory and helps DCs free up valuable warehouse space by avoiding overstock citations. A WMS system can help optimize stock levels and ensure there’s enough stock on hand to meet upcoming projected sales demand. And, in the case of understocks, a WMS can tell manufacturers where to ramp up production. By leveraging a WMS, manufacturers and distributors can benefit from timely alerts for products nearing expiration, allowing for timely actions such as discounting, repositioning, or even disposal. Efficient shelf rotation is critical to maintaining product quality and ensuring that older stock is sold before newer batches. A WMS facilitates this by providing visibility into expiration dates and automating stock rotation procedures. 

3. Serial Numbers 

While batch tracking uses lot numbers to identify groups of products, serial numbers provide a unique identity to each individual item within the batch–giving every single product its own distinct serial number for precise tracking. Serial numbers are stored and tracked within a WMS to help warehouse managers achieve a clearer, and more organized system for tracking and tracing to eliminate bottlenecks, maintain accurate record keeping, and meet consumer standards. By assigning serial numbers to individual inventory items, businesses can keep track of products throughout the entire inventory lifecycle and beyond. 

Further, serial number tracking helps businesses in fraud prevention by enabling them to quickly identify and address instances of theft or unauthorized distribution. And, in the event of fraud, serial numbers help brands assure customers that products are authentic and is a helpful tool in combating counterfeits, which is a rising concern for retailers. 

Implementing a robust WMS 

Track and trace capabilities are essential for businesses and a robust WMS plays a powerful role in optimizing this process. With the ability to track serial numbers, distributors can ensure regulatory compliance, optimize order fulfillment, and improve customer satisfaction. By integrating a smart WMS into warehousing operations, 

businesses benefit from more strategic decision-making along with operational efficiency, risk mitigation, and sustained growth.

‘Lab-grown’ animal-free dairy protein receives approval, paving the way for sustainable alternatives in the dairy industry

By Sylvain Charlebois

The term “lab-grown” often has a negative connotation for most consumers, and it’s not hard to understand why. However, the landscape is changing.

Canada has reached a historic moment in the dairy industry, thanks to Health Canada’s recent approval of Remilk’s “lab-grown” animal-free BLG protein. This approval represents a significant shift in protein production, with Remilk becoming the first company to gain regulatory approval for its animal-free dairy protein in Canada.

While this groundbreaking decision highlights the evolution of food science, it also presents new opportunities and challenges for Canada, some of which may not be met with enthusiasm.

To better grasp this technology, let’s explain what precision fermentation, the technology approved by Ottawa, is. The key difference between regular dairy products and Remilk’s technology lies in precision fermentation’s use of biotechnology to manipulate microbes to produce substances, such as proteins, that are virtually indistinguishable from those found in traditional dairy.

Fermentation not only alters the taste and texture of food but also enhances its qualities, including digestibility. For example, individuals with lactose intolerance often tolerate yogurt and kefir better than conventional dairy products because fermentation aids in breaking down lactose. Millions of Canadians who are lactose intolerant are always looking for more affordable options.

The process may not sound particularly appealing, but it essentially involves working with microbes to generate proteins. It isn’t about creating ultra-processed foods; instead, it’s about catering to consumer preferences while working with nature, but at a different level.

It introduces a new technology that provides an ingredient for manufacturers seeking dietary and nutritional solutions they often struggle to find with conventional dairy-based proteins. Importantly, consumers won’t be able to discern any difference in taste and texture compared to traditional milk, ice cream, yogurt, and cream cheese, all while benefiting from lactose-free, cholesterol-free, and hormone-free options that offer significant nutritional and environmental advantages.

This development is poised to disrupt the dairy industry in multiple ways as consumers increasingly seek sustainable alternatives that don’t compromise on taste or texture, with animal welfare considerations also playing a significant role.

Consumers may not directly purchase Remilk products in stores but can expect to encounter these proteins in various food products they regularly buy, without them being explicitly labelled as such. This trend isn’t entirely new, as the rising cost of milk and dairy proteins in Canada has already led manufacturers to substitute real dairy with alternative ingredients. Remilk now offers a different, more flexible option with numerous benefits, both nutritionally and environmentally.

While Health Canada has given its approval, Agriculture and Agri-Food Canada might hold differing views. Supply management is a cherished concept in the Canadian dairy industry, with a highly protected market worth over $24 billion in quotas, supporting approximately 9,000 farmers. This system is unlikely to change anytime soon, as any potential threats or challenges to supply management are typically addressed swiftly.

However, concerns among consumers about moving away from dairy are growing. These concerns encompass environmental issues, product quality, animal welfare, and pricing. As some Canadians notice declining quality in certain dairy products, particularly butter, they face increased prices. At some point, adjustments may become necessary.

The implications of this milestone are profound. It underscores the shifting landscape of food production and the rising demand for sustainable, dairy alternatives.

Health Canada’s decision is indeed positive news for consumers and food science, but it poses challenges for the traditional dairy sector. Supply management is, well, focused on precisely that – supply management. Dairy boards prioritize ensuring dairy farmers receive compensation for their work over concerns about declining product demand in Canada, and that’s perfectly acceptable.

Nevertheless, it’s worth considering that, over time, this approach could significantly reduce the number of dairy farmers, which may not be a wise strategy.

Whether it is a plant-based lactose-free alternative to milk, vegan ice cream or a meatless steak: The offer of non-animal food is continuously growing. The most important ingredients of these “new food” products are proteins, which have so far usually been plant-based. However, processing of these protein powders poses a challenge: In order to ensure optimum product quality, the proteins must be fully unlocked, starches must be degraded to the required degree, and agglomerates and foam must be avoided during production. All of this is achieved when processing protein powders in the vacuum expansion process.

The following professional article by Dr.-Ing. Hans-Joachim Jacob, Senior Expert Process and Applications is attached below.

Attachments:

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