The food supply chain is facing multiple challenges, not the least of which is heightened pressure from stakeholders and consumers to meet Environmental, Social, and Corporate Governance (ESG) expectations.
With over 9.5 million tonnes of food wasted annually in the UK alone, the effects of improper food management on the environment, natural resources and food insecurity can no longer be ignored. The UK has stated a commitment to Net Zero food production by 2040 – an ambitious goal, but a doable one, now that more and more food businesses are recognising that lower costs cannot come at the expense of sustainability.
And a prime lever in this Net Zero goal will be digitisation and automation to achieve visibility and efficiency throughout the supply chain.
The power of data
Food production generates a constant stream of data with immense potential for actionable insights – if that data is suitably harnessed. From temperature fluctuations in cold storage to machine run speeds, data across the food chain needs to be collected, sorted, stored, studied and made visible to all to make relevant changes.
One of the most powerful applications here is adjusting processes to reflect changes in variables like temperature, small spikes or dips which could completely change food’s shelf life. When this data is analysed and available to the entire supply chain through a centralised dashboard, parties can identify where inefficiencies exist and tune those, such as by investing in better cold storage for the transport fleet.
Developing better products
Digitisation has powerful implications for designing and testing new products through simulation. With centralised supply chain data, producers will know exactly what temperatures, transport and storage conditions the food will encounter, along with the types of food customers buy the most.
They can tweak recipes and packaging techniques to optimise quality and shelf life by testing combinations of nuts, fruits and flavourings to make a most shelf-stable chocolate recipe.
Digitisation helps farmers know which crops to cultivate and what quantities so that consumers get the food they need and resources are no longer wasted on crops that never get eaten.
Greater energy efficiency
With digitisation, energy-saving efforts become systematic and cost-effective. Companies can measure how much energy they use and where, and make adjustments accordingly, such as by switching to LED lights, repairing HVAC systems, or installing biogas-powered turbines.
AI and Big Data can also be used to generate simulations and make predictions about how to reduce carbon footprints overall and how that will, in turn, impact product quality, such as by simulating the replacement of regular packaging with biodegradable materials to see how it would affect the shelf life.
How businesses can use technology for both profits and sustainability
It is unrealistic to expect that the mere availability of technology will translate to food companies embracing it. Technology is an investment, and every investment needs justification – moreover, it takes time for leaders to be mentally ready to rebuild their structures. Experts recommend the following best practices to make the transition a smoother one:
1. Getting the right guidance
Digitisation is a powerful tool, but only when leveraged correctly. Food businesses new to digitisation should consult with digital experts to develop a strategy that yields significant returns on investment. Particular note should be made of the energy and waste management cost savings in both the short and long term so that there is a clear business case.
2. Addressing cultural barriers
Not everyone is equally open to smart technology. Leaders often doubt investments that do not bring any immediate profit or growth, while employees tend to be sceptical of technology that might threaten their relevance.
Every digitisation initiative needs to be explained clearly and minutely so that everyone knows their contribution to the transformed system precisely. In addition, both short-term and long-term gains need to be highlighted.
Even small digital upgrades can have big impacts – something that should be emphasised, as smaller businesses may not have the budget for big upgrades.
3. Investing in technology-first skills
Technology is whatever human intelligence makes of it, a critical point that often gets overlooked. When introducing any digital tool, companies should train their team members in digital, AI and analytics skills, which are subjects that continue to see wide skill gaps at even senior levels. In addition, employees should be able to see how the new technology will supplement their human abilities and leave them free to invest in more critical activities.
4. Sharing data both upstream and downstream
If data is to deliver truly meaningful results, it cannot be used in silos. Every point along the supply chain must share information on how food is manufactured, processed, packed, transported and stored.
Through real-time visibility on these, businesses can make adjustments to preserve and improve food quality, such as by accelerating the transport timelines to retail outlets in case they hear of a breakdown in the warehouse cold storage.
In addition, real-time insights on inventory movement will help producers decide how much more food to send out and when.
5. Continuous monitoring and adjustment
Digitising the food supply chain is not a one-and-done deal by any means. Businesses need to use the data they receive to understand exactly where improvements are being made and to what degree.
As new technologies emerge, decisions need to be made on which to add to the mix. The goal, as always, should be to implement what makes sense for the supply chain and not just to choose what’s “new”.
Over to you
In conclusion, the path to better food management is undoubtedly digitisation, but the key to making it work is to stop viewing digitisation as a “cost” and start treating it as an investment for both profits and the planet.
For those with financial constraints, governments can offer smart financing options to help with the initial transition to digital. The sooner food businesses embrace digital, the more effectively they can navigate the emerging social, economic and environmental challenges in this sector.
