Since the beginning of the COVID-19 crisis, countries worldwide have been going through quarantines and various lockdowns, leading to one of the worst economic downturns in this past decade. Many countries in the South East Asia region have put in place several initiatives to help their economies, however the policies and the schedules of lockdown easing and trade restrictions differ from one country to another, businesses continuously suffer from consumers’ and suppliers’ uncertainty. This uncertainty created a considerable cost burden on numerous companies, especially within the food and beverage (F&B) sector.
According to the supply chain management department’s chair, Scott Grawe, from Iowa State University. F&B is one of the sectors that is extremely vulnerable when facing any significant changes. The industry includes all companies involved in producing, processing, packaging, transporting, and distributing edible goods, making the businesses highly inter-dependent. Consequently, any tiny change within a fragment of the upstream will create a ripple effect that disrupts the entire network. Even without facing any problems from the upstream, the COVID-19 lockdowns and social distancing regulations have resulted in countless downstream restaurants and cafes to close due to the lack of demand. Particularly for SMEs, the pressure is being widely felt, and some even have faced sudden oversupply problems.
The F&B issues not only affect people within the industry but since it plays one of the leading roles of an employer in many of our society, it has also generated substantial economic impacts. As per the UN states, the F&B industry is one of the world’s largest industries regarding both revenue and employment.
Recent data shows an evident shortage of essential food commodities in most Indonesia’s provinces, with over 20 in short of garlic, sugar, chili, and eggs. Even staples like rice are in shortage for 7 out of the 20 provinces.
On May 4, half of the state governments refused the national government’s order to relax restrictions in fear of the second wave of COVID-19 infection. Among were states of leading agricultural production and food manufacturing hub, causing lumpy F&B supply chain operation across all states.
The government has slowly eased the lockdown regulations. Nevertheless, the damage has already been done as countless restaurants and cafes were forced to closed permanently with the lack of demand.
In April, the Vietnam rice exports were limited to 500,000 tons causing a vast market loss for the local traders, and at least 300,000tons of rice piled up, slowly degrading.
Though COVID-19 disrupted the normal, the current situation highlights the important yet missing dots in the existing supply chains, including the lack of real-time tracking, visibility, traceability, transparency, and lack of diversification - it gave us a chance to reform our businesses. It was indeed a key focus for various foreign trade ministers during the most recent Asia Pacific Economic Cooperation (APAC) forum.
There are several ways you can restructure your current business to better prepare yourself for any future challenges. A good first step is to move away from traditional approaches to supply chain management and embrace digitization to optimize efficiency and work together to reform the economy.
Key benefits of digitalizing your supply chain management
Reduce Cost of:
•Labor- administrative works, such as order taking, reporting, reconciliation.
•Office consumables- paper, printing, file folder and etc.
•Poor communication within the company and with upstream and downstream.
•Oversupply through real-time information and data-driven purchase strategy.
Enhance Efficiency of:
•Collaboration with real-time information visible for all parties involved.
•Supply chain operation and management.
•Tracking products for better quality control and customer satisfaction.
What Crystal Link Technology offers
We offer a standardized subscription based digital supply chain management platform from Customer/Outlet Ordering, Warehouse, Transport to Billing all within a single platform tailored specifically for the F&B industry, helping companies like yours embark on digitalization journey in shortest time with low cost.
Take every crisis as an opportunity to learn, reflect, improve, and strive to bring your business to the next level.
Read more about our products: https://www.clt-apac.com/index.do?product