Accenture urges strained food supply chains to collaborate

Global food supply chains are reacting to a starvation mentality, and such short-termism is hampering the development of resilient food supply networks, a new report from Accenture has concluded. Collaboration and agility, he says, are key to building resilient food supply chains.

The report – Food Supply Chain: Responding to a Starvation Mentality – indicates that food producers are focused on short-term supply chain disruptions caused by the pandemic and the crises in Ukraine and Indonesia.

He adds that with an increasing number of countries declaring limits on agricultural exports, producers must prepare for a more sustainable and transformational challenge on the demand side: the end of “abundance thinking” among consumers. .

Agility is key in the food supply chain, says Accenture CEO Sweet

Julie Sweet, president and CEO of Accenture, is quoted in the report: “It always comes down, again, to understanding the market, being much more agile and being able to respond to the market.”

The report continues: “The new scarcity mentality and resulting demand responsiveness have huge implications for supply chain planning, especially when it comes to embracing innovation for a sustainable growth.

“This volatile consumer demand mindset, combined with supply-side challenges, will be difficult to reverse.”

Accenture adds that the good news is that food producers can “build resilience using existing relationships and increase supply chain agility with creative solutions.”

On collaboration in food supply chains, he says: “For food producers, successful sourcing no longer means sourcing at the lowest cost. Over the next decade, looking at who you know and how well you know them will also be a key factor.

“Post-pandemic, the emphasis on the human connection in negotiations has stimulated new levels of trust between food producers and suppliers. This paved the way for the deeper collaboration needed to react more flexibly in an unstable consumer landscape. »

Food producers seeking closer relationships with retailers

He adds that major food producers are now seeking deeper relationships with retailers “to increase demand forecasting capabilities,” and that these collaborations “allow food producers to think creatively and leverage larger solutions.” , structural and technology-based with a long-term vision”.

Accenture says food producers “don’t have to look far for creative solutions” and that the past “has plenty of inspiration.”

The report continues: “The reintroduction of regional production hubs allows food producers to respond quickly to local market demands, with consumers also benefiting from preferred local tastes.

“Localized food production also has other advantages, such as taking into account the impact of increasing shipping costs in proportion to unit costs.”

As an example, he cites the case of Accenture’s FMCG client who was able to recoup lost revenue by adopting a regional production model.

“By shipping their products more densely, they have reduced unit distribution costs and increased supply chain agility,” he said.

“Embracing such forms of creative thinking can be a necessary step,” the report concludes. “It’s not new. In the 1930s, Campbell’s revolutionized food manufacturing, when it condensed its soup products and pushed product finalization into the hands of consumers.

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