Just when it seemed the supply chain had largely recovered from COVID-19, the paper towels had gone missing again at Costco in late November. A new study from Resilience360, based on its worldwide supply chain network tools, indicates that COVID-19 has revealed weak links in the supply chain, and they may not be going away any time soon. Resilience360, once part of DHL, is now a standalone company, and DHL remains a partner and investor.
The Resilience360 report, “COVID-19 Exposes Vulnerabilities in the Global Food Supply Chain,” affirms much of what we’ve already experienced: The pandemic has upended the food and beverage industry, reducing its operational capacity in production, processing, packaging and distribution. The scourge has caused a shift toward a greater need for efficiency in production amid the long-term realities of staff capacity shortages and an unpredictable regulatory environment.
The Resilience360 report also shows other key issues:
- The pandemic has upended the food and beverage industry, reducing its operational capacity in production, processing, packaging and distribution.
- With consumers not eating on the go, but instead consuming individually packaged products at home, plastics manufacturers have enjoyed a new window of opportunity, but have created a mess of single-use plastics in the environment. For example, during Singapore’s eight-week lockdown, an additional 1,470 tons of plastic waste was generated in takeouts alone.
- The uncertainties of virus transmission have led many countries to adopt food protectionist policies, interrupting supply chain continuity.
- Reductions in passenger air travel mean fewer routes for which perishable products travel.
- Processors, producers and distributors still have to adhere to local health measures and monitor for the virus, which can disrupt supply chains.
- The pandemic has shown the pitfalls of an industry historically reliant on manual labor.
Lessening the impact of future problems
At the end of May 2020, 23 U.S. states reported COVID-19 outbreaks in meat and poultry processing facilities, totaling 16,233 cases across 239 facilities since March. During the month of June, 11,000 positive cases were reportedly tied to three companies: Tyson Foods, Smithfield Foods and JBS. Tyson has since implemented strict operational protocols to prevent another wave of virus transmission, says the Resilience360 report.
Meat supplies in U.S. grocery stores are expected to shrink by as much as 35%, with prices spiking as much as 20% at the end of 2020, says the study. Unknown at the time of this article is how the resurgence of COVID-19 will affect meat producers and prices, though most producers and processors are now better equipped to handle further outbreaks.
The study suggests that food and beverage supply chain professionals in the short term can adhere to the regulatory mandates of health professionals, including reduced staff and social distancing guidelines and take advantage of intelligence monitoring tools to stay abreast of new virus outbreaks and associated local regulations.
In the long term, food and beverage supply chain partners need to:
- Consider diversified sourcing as a long-term business strategy.
- Adapt to shifting consumer behaviors and packaging demands.
- Prioritize a higher degree of automation in factory floor operations.
- Invest in technologies that will enhance the longevity of food and beverage products.
To read the Resilience360 Special Report, “COVID-19 Exposes Vulnerabilities in the Global Food Supply Chain, follow this link.
For more information on supply chain issues, see:
“COVID-19 hits meat and beverage hard,” FE, July 2020
“COVID-19’s effect on the supply chain could have been lessened,” FE, June 2020
“How robots help processors navigate the COVID-19 pandemic,” FE, August 2020