Managing Inventory And Supply Chain Challenges As The Covid-19 Pandemic Persists
January 25, 2022
The Great Cream Cheese Shortage, skyrocketing food prices, border delays, and truck driver strikes… When it comes to supply chain disruptions, we’ve seen it all.
Overcoming these hurdles in the wake of the COVID-19 pandemic has been no easy feat for the foodservice industry. In this article, we outline some of the biggest challenges Fresh Ideas has faced in recent months and the steps we are taking to overcome them.
What are the biggest supply chain challenges impacting the foodservice industry?
Rising food costs
In November 2021, consumer prices in the U.S. jumped by 6.8%, representing the fastest inflation spike the country has seen in 39 years. The cost of certain produce, including meat and poultry, is particularly high at the moment, which is largely due to labor shortages in processing plants. The price of chicken breast, for example, has doubled in the past 12 months.
In a post-pandemic world, additional safety measures and new regulations mean factories are unable to operate at full capacity, with many running at just 50-70%. Meanwhile, many of our suppliers are struggling to recruit people into on-site and labor-intensive jobs simply because many workers desire to pursue roles that will accommodate remote working.
Border closures, port delays, truck driver strikes, natural disasters, and incidents like the Suez Canal blockage have all contributed to significant supply chain disruptions.
In some instances, high-demand products are only being manufactured in one plant, which means any disturbance to shipping routes can result in out-of-stock products.
The result of labor shortages, shipping delays, and changing consumer demands is that there is a scarcity of certain food products. While some shortages can be predicted, and thus planned for, others have taken the hospitality industry completely by surprise.
Last year, the U.S. faced a cream cheese shortage, appropriately named the Great Cream Cheese Shortage of 2021. This was partly due to increased consumer demand ahead of the holiday season, but the problem was compounded when Schreiber Foods was hit by a ransomware attack that halted production for several days. The hospitality industry couldn’t have predicted disruption of this kind and with a product like cream cheese being difficult to store for extended periods, stockpiling the item was not an option in any case. And it wasn’t just cream cheese that was hard to come by for a period of time. Other products like beef, bacon, and poultry were in short supply not to mention the scarcity of paper products that bedeviled consumers throughout much of the pandemic.
How is Fresh Ideas working to mitigate these challenges?
- Increasing product inventory
To ensure our operations continue to run smoothly amidst varied, and often unpredictable, supply chain disruptions, we have increased our product inventory level. This allows some menu flexibility in the event of shipping delays or unexpected product shortages.
Making this operational change has proven to be a careful balancing act – assisted greatly by a new tool we developed that enables our teams to closely monitor product inventory levels. Ensuring that all food is kept fresh is of the utmost priority and, in some cases, we have needed to find additional freezer or storage space to hold the extra produce.
- Diversifying the supplier base
The unprecedented disruptions caused by COVID-19 have served as a stark reminder that U.S. businesses must limit their reliance on global supply chains. It’s been important for us to implement robust contingency plans, diversify our supplier base, and end our dependency on single-source suppliers for critical products and services.
- Sourcing locally
To combat logistics challenges and shipping delays we have committed to finding a more significant portion of local suppliers. This has enabled us to access certain high-demand products last minute as well as drive a more sustainable supply chain – reducing our carbon footprint and supporting the local communities in which we operate.
- Supplier risk assessments
We have been working closely with our suppliers and manufacturers to try and better predict and understand looming supply chain disruptions. This includes pre-empting a sudden spike in demand or a product shortage so contingency plans can be put in place and identifying when and where shipping delays may happen so alternate supply routes can be considered.
- Tracking technology
Leveraging tracking technology to follow product shipments and monitor inventory levels has vastly improved our ability to predict and respond to disruption throughout the supply chain. We receive real-time data on the progress of our shipments, delivery notifications, and predictions on factors that may disrupt supply routes. Meanwhile, our inventory tracking system provides regular updates on our stock levels so we can plan ahead and avoid product shortages.
- Menu amendments
No matter what disruptions come our way, Fresh Ideas is committed to delivering a wide range of high-quality menu options to our customers. With that being said, we have chosen to amend our menus or focus on serving more seasonal produce in some instances to mitigate against ongoing supply chain disruptions and drive cost efficiencies.
Our customers have lived through the pandemic and fully understand that there are times when it has simply not been possible to source certain ingredients or products.
What does the future hold?
It’s difficult to predict how COVID-19, and other unprecedented disruptions, will further impact supply chains in the foodservice industry.
What we do know is that our customers’ expectations are extremely high and we are determined to continue providing the excellent service to which they have become accustomed.
It’s expected that the rising of food prices will level out in the coming months but, in the meantime, Fresh Ideas will pivot its offerings and adapt as needed while always focusing on optimizing the customer experience.