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Fresh food lettuce

Challenges in the Australian Food Supply Chain

It’s a $45 billion industry annually and the food sector is crucial to all human function and productivity. As a result, both organisations and consumers keep a close eye on the quantity and quality of food being produced and delivered.

When it comes to quality, expectations are rising, and trust seems to be rare now. News about food poisoning and tampering are fast to make headlines and social media. After all, there could be dozens of steps between the farm and the plate. At each point tampering, addition or substitution is possible which compromises the food product. Environmental conditions might also be far from the ideal which makes product quality questionable.

Trust, quality and affordability are the main concerns of consumers. They’ve become aware of the risks of consuming potentially unsafe food. And yes, it’s disturbing to think that the food we eat might be from questionable sources. For example, in 2015 Chinese authorities seized more than $400 million worth of smuggled meat (source). The worst part is that some of the meat actually dates from more than 40 years ago. Some were rotting and other meat had been probably thawed and frozen several times already. This should make you think about what’s really on your plate.

Australia might be no exception either, since there are also dozens of processes here before a slice of meat arrives at the table. To think that more than 25 million people depend on the food supply chain means that it’s quite possible that there can be mistakes, fraud and shortcomings along the way. Tons of food is delivered daily and with dozens of steps between harvest and consumption, the level of food safety can be questionable.

China, Australia and other countries are applying measures to improve food safety and quality levels. Specifically, the logistics sector is taking steps to ensure the right delivery and storage conditions are being met from point A to B. After all, much of the action happens in storage and transport, and this is where the fraud could also happen. This is becoming more pronounced as our food and ingredients now come from places hundreds or thousands of kilometres away. More points of vulnerability are slowly introduced as the supply chains get longer.

Aside from compromising trust and quality, the cost of the product also suffers because of rising demand and increasing complexity. The transport and storage increase the final price (perhaps half of the final purchase price of a kilogram of meat might be due to transport costs). More quality inspections are required which further adds to the cost. The end result is that customers have to pay more for the item, which then affects their spending power and overall quality of living (they have less money to spend elsewhere).

The food supply chain depends on other supply chains

Although our country is a nett exporter of food, it doesn’t mean it’s self-sufficient or it doesn’t require other sectors to survive and thrive.

For example, in food production, we might need to import fertilisers and pesticides. These have their own supply chains which could also be affected by the cost of fuel, water and electricity. This also applies to food packaging and processing where we need to source materials and chemicals. In other words, the food supply chain is far from being a straight line. There are several branches and networks where slight changes can affect the quality and quantity of food being delivered to the supermarkets.

The supply and flow can also be disrupted by fire, flood and earthquakes. The links might be destroyed or make the passage of delivery vehicles difficult or impossible. Aside from the availability being affected by the delay, this also results in price changes since there could be a higher demand for the limited number of goods. Temporary panic buying might also happen which then depletes the inventory. And yes, the producers and middle businesses lose the opportunity to sell their produce.

It’s a dynamic and complex network of changes and interdependencies. Even with computers, keeping up with fluctuating supply and demand is a never-ending challenge. Even if warehouse operations are optimised and maintained as safe (minimal number of collisions and accidents), new challenges sprout or the business owner or manager starts to become aware of serious problems.

What should we do then to solve those challenges? A straight-line approach is never going to work now because of the complex interdependencies. We have to think of it as an organism with different functions and systems. It’s like how the human body works that if there’s something wrong with the digestive or circulatory system, the person becomes ill while other functions are also affected.

In the food sector, time is really of the essence and consumers are vigilant about food safety and quality. It’s a more sensitive business because of the high risks to public safety. Consumers and organisations should keep a close eye on businesses engaged in producing, processing and distributing food.

To address those challenges, it often requires a combination of technological solutions and human initiatives. In the warehousing and logistics sector, for example, speeding up operations extracts every bit of efficiency. This results in less transport time for goods, which helps minimise food spoilage or any deterioration of goods. Accuracy in inventory is also crucial so that what first came in will be the first to go out.

Businesses involved in transport and storage also use indicators to ensure that goods are being stored or transported under ideal environmental conditions. If there’s a huge temperature anomaly, it could compromise the quality of food (i.e. accelerate microbial and enzymatic activity).  Indicators help by recording the conditions during transport that went beyond the prescribed temperature range.

What about trust and making sure the goods indeed came from known and certified sources? A chain of trust and integrity is crucial here because of the dozens of steps between the farm and the table. Transparency is key and it can be enforced by regulators as well as food producers, processors and retailers. It is still a long chain of risk, but with the correct implementation of measures the customers benefit, and everyone involved in the supply chain will gain trust and continued business.