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The Importance of Digitalised Food Supply Chains

20 June, 2023
Food Supply Chains - Image generate by IA with Midjourney v.5.2

 

How food comes from producers to our houses: The Food Supply Chain

When a food is consumed in our houses, it has come a long way from where it was first produced or harvested. The various processes it underwent are called Food Supply Chain (Sinfo One, 2021a; Georgiev, 2023a). Even if every type of food can have its own peculiar Supply Chain, depending on the processes it requires or if it is ready for consumption after the production, there are always five fixed stages, that will be later explained, and three main sectors – the agricultural sector, the food processing industry and the distribution sector (Bukeviciute et al., 2009; Asaad, 2022; Georgiev, 2023b).

The first stage of the Food Supply Chain is Production, here food is grown or developed by the agricultural sector - animal farms, farmers, and food manufacturers – which must follow local and international guidelines, laws, and legislation (Lewis, 2022; Georgiev, 2023b). Then, the second stage is Handling and Storage, where food is washed and prepared right after being harvested (Lewis, 2022; Georgiev, 2023b). When it is ready, the food is then sold to other firms in the agricultural sector, to the food processing industry or directly to retailers if it is ready to be consumed (Bukeviciute et al., 2009). Third, there is Processing and Packaging which refers to the processes that make the food edible comprising several activities, like refining, milling, cleaning, cutting or drying and slaughtering and disassembling (Bukeviciute et al., 2009; Lewis, 2022). This step must respect requirements too, they are set by local and international institutions, as well as retailers (Georgiev, 2023b). The fourth part of the Food Supply Chain is Distribution and Retailing. It is the most significant part when the final product is delivered to retailers, interacting directly with the customers (Bukeviciute et al., 2009; Lewis, 2022; Georgiev, 2023a; Georgiev, 2023b). This is also one of the most delicate steps of the chain, as during transportation the environmental conditions must be kept within specific standards to ensure food quality and safety. The last step is Consumption when consumers eat the food at the end of the supply chain. To understand the importance of this process, it accounts for 6% of EU added value and 12% of EU employment (Bukeviciute et al., 2009).

Moreover, according to Lewis (2022), there are six supply chain models: Continuous flow, meant for high-demand production that does not often change; Fast-chain refers to shorter life cycle products that must be delivered quickly; Efficient, for more competitive environments; Agile, to be able to adapt the supply chain to changes on the demands side; Flexible, similar to Agile, but meant for a more extensive variety of products; and last, Custom configured, to provide customised service, it is a hybrid between the agile and continuous flow models.

 

The Problems within Food Supply Chains

As the world is “getting smaller” and the economy is globalised, Food Supply Chains are getting longer and more complicated, and products have to travel longer distances. These characteristics are creating new problems that risk jeopardising supply chains and causing economic and social problems (Georgiev, 2023b).

First of all, being Food Supply Chains longer, consumers are more disconnected from food sources, therefore, they require a certain degree of transparency and traceability. These requirements must also be met due to laws, like Article 18 of the European Regulation 178/2002 on food safety. Traceability and transparency are essential because consumers want to know where their food comes from and which kind of processes underwent before being sent to their grocery stores. Furthermore, in case of recalls or withdrawals, due to food contamination or other problems, traceability helps producers and retailers to understand at which stage the issue arose, preserving them from excessive costs (Sinfo One, 2021a; Sinfo One, 2021b; Asaad, 2022; Lewis, 2022; SafetyCulture, 2023). Last, transparency and traceability are the foundations for ensuring quality. In fact, quality labels like PDO, PGI and GI need transparency to be appointed.

Nevertheless, the need for more transparency and traceability sometimes originates from another problem of modern Food Supply Chains: Fragmentation. The different companies and firms forming the chain links use different systems, so communications among them are complex and confusing making the supply chain challenging to manage (Asaad, 2022; Lewis, 2022; Georgiev, 2023b). However, the supply chain is not the only thing fragmented: also the legislation is complex and confusing as it comprises of local and international regulations and unifying it could enhance the whole process (Georgiev, 2023b). Last, a fragmented supply chain with many different regulations struggles to guarantee the safety and quality of products (Asaad, 2022).

 

The technological solutions for a more efficient Food Supply Chain

To cope with the problems described in the section above, it is helpful to turn to new technologies that will improve the whole chain. To promote this idea, a consortium made up of 25 organisations created a Horizon Europe Project called ALLIANCE (A hoListic framework in the quality Labelled food supply chain systems' management towards enhanced data Integrity and verAcity, interoperability, traNsparenCy, and traceability). Focusing on GIs and quality labelled Food Supply Chains, they aim to use innovative methods and tools to make them more transparent. They will use Distributed Ledger Technologies, like Blockchains, to register every single step in the product life cycle. Also, creating a single Blockchain for the whole supply chain will solve the fragmentation problem and help the flow of information from one sector to the other (ALLIANCE, 2023). Last, combining other technologies with blockchains, like IoT sensors, will make monitoring the product at every stage more manageable and more reliable, especially during transportation and distribution, controlling environmental conditions. In this way, reducing the possibility of human errors and collecting so much data, the food will be much safer, and the consumer could trace the product back to its harvesting using just a smartphone.

The importance of the Food Supply Chain is crystal clear as it is the way through which we get food. Nevertheless, there are problems that must be solved to avoid risks and technology and projects like ALLIANCE can help us to get there.

 

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