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    April 11, 2023

    Why Your Business Should Build Agile Supply Chains and Where to Start

    In today's fast-paced and ever-changing world, businesses must be able to adapt to changes quickly to remain competitive. This is especially true in the food and beverage industry, where consumers' tastes and preferences can shift rapidly, supply chain disruptions can quickly lead to wasted products and lost profits, and evolving regulatory requirements constantly shift the goal posts for compliance.

    To meet these challenges and more, companies must establish agile supply chain systems that prioritize flexibility and responsiveness to change or disruption. In this piece, we explore the benefits of establishing an agile supply chain in today’s environment and where businesses can get started.

    The Benefits of an Agile Supply Chain

    An agile supply chain is adaptable and can quickly respond to changes in demand, supply, or other market and environmental factors. It prioritizes flexibility, adaptability, and collaboration to enable businesses to pivot quickly and efficiently.

    This is particularly crucial in the food industry, which is highly susceptible to supply chain disruptions. We saw firsthand how important agile systems are over the past few years, as first a global pandemic, followed by ships blocking supply chain routes, natural disasters, and geopolitical instability created lasting ripple effects across markets. Highly vulnerable portions of the industry, like the infant formula market, are still trying to recover.

    Agile supply chains can help food businesses mitigate these risks by enabling them to quickly adapt to changing circumstances, source alternative ingredients or suppliers, and minimize the impact of disruptions on their operations. More specifically, they can help businesses navigate:

    • Changing Consumer Preferences: The food industry is highly sensitive to changes in consumer preferences, which can quickly shift based on factors such as health concerns, environmental awareness, and cultural trends. Agile supply chains can help food businesses respond quickly to these changes by enabling them to adjust their product offerings, supply chain processes, and marketing strategies in a timely and efficient manner.
    • Regulatory Compliance: The food industry is subject to numerous regulatory requirements related to food safety, labeling, and traceability. Agile supply chains can help food businesses ensure compliance with these regulations by enabling them to quickly track and trace products throughout the supply chain, implement effective quality control measures, and respond quickly to any safety or quality issues that arise.
    • Economic Uncertainty: Economic uncertainty can lead to changes in consumer behavior, including shifts in demand for certain types of food. For example, consumers may be more likely to purchase lower-priced, staple foods rather than luxury or specialty items. Inflation can lead to higher food prices, which can make it difficult for consumers to afford certain items as well as challenging for businesses to keep their production costs low. Agile systems can help businesses to improve their operational efficiency, keep costs low, and enhance their competitive advantage to mitigate the impacts of economic uncertainty.

    Agile Supply Chains: Enabling Supplier Collaboration

    As noted in our 2023 Traceability Report, businesses are being squeezed by consumer demands, navigating evolving regulatory requirements, and still facing an irregular supply chain. Some are strained even further by labor shortages, an impending recession, and increasingly tight margins. As a result, supplier relationships have become a major focus for many businesses as they iron out supply chain anomalies from the past few years.

    A key component of agile supply chains is the focus on creating a flexible and responsive network of suppliers, manufacturers, distributors, and retailers that work together to share information, resources, and risks, and identify opportunities to enhance their supply chain resilience. This type of collaboration is key to ensuring that your business can:

    • Respond quickly to changes in demand or supply,
    • Have greater flexibility in sourcing materials,
    • Establish trustworthy relationships among different stakeholders in the supply chain,
    • Gain greater visibility and transparency into supply chain operations, and
    • Meet evolving regulatory requirements and keep consumers safe.

    Increased collaboration and partnership between businesses and their suppliers is paramount, but perhaps easier said than done, particularly in an increasingly competitive and growing food industry. So, what can – or should – businesses be thinking about when it comes to taking proactive steps to create a more agile supply chain for their operations?

    The answer: invest in technological systems that can help.

    Investing in Technology for a More Agile Supply Chain

    An agile supply chain can help businesses be successful by enabling them to quickly respond to market changes, enhance their operational efficiency, and better collaborate with their supply chain partners. It also helps businesses keep consumers safe in an increasingly complex global supply chain.

    To truly adopt a more agile supply chain, businesses should invest in a centralized solution, like Trustwell’s Connect platform, that can help them better respond and adapt to economic or global disruptions, streamline processes, and better manage and collaborate with their suppliers – all key components of a flexible, responsive, and resilient supply chain network.

    If your organization is looking for guidance on how to adopt a more agile supply chain or what solution is the right one to meet your business’s needs, connect with our team at Trustwell today.

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