COVID-19: Changes Throughout the Supply Chain

Keeping employees safe and ensuring production remain the main priorities for the companies within the industry during the COVID-19 pandemic. Preparedness for shortages and delays on the distribution chain is paramount. WorldBakers spoke with specialists in the industry in a series of interviews, to outline the challenges they are confronting with and the measures they are taking to ensure work continues. 

By Catalina Mihu, Ioana Oancea

AIB International 

AIB International, which provides know-how on food safety and sanitation, reveals that there are numerous current challenges associated with maintaining an uninterrupted supply chain. They include a lack of workforce due to sick employees, shortage of raw materials from certain origins/countries, slow-down on logistic operations due to infection risk; and less focus on food safety due to a lack of people in management, Richard Brittain, GM, operations, EMEA, told us in an interview. 

There have been several measures put in place by the supply chain to ensure worker safety. The expert from AIB International highlighted:

• the use of adequate personal protective equipment; 
• rescheduling shifts in order to avoid too many employees from different shifts gathering together; 
• monitoring employee health; 
• measuring body temperatures and monitoring employees for symptoms like coughing; 
• requesting health condition statements from supply chain personnel, including drivers and contractors.  

The institution’s ability to conduct on-site inspections and audits of food production facilities has been impacted during the pandemic. They have continued providing service and expertise through several virtual solutions. 

With all businesses considering what stocks it would be optimum to make to avoid both shortages and overstocking, the expert from AIB International also recommends extending product shelf-life either by alcohol spraying, freezing, or packing in a modified atmosphere, as the product type allows. “It is also smart to prioritize the product lines by taking into account changes in consumer preferences during the pandemic,” he explained.

Streamlining Tech Support

German dough expert Diosna told us it has taken its responsibility very seriously. This is why one of the focal points during this time is the ability to deliver, according to Henrik Oevermann, Diosna’s CEO. “For this, it is extremely important to maintain regular operations. Only if we succeed in doing the best work here, we can fulfill our task and at the same time maintain the profitability of our customers and that of our company. Since we have been relying on “Made in Germany” for more than 135 years, we are largely independent here. However, the limited transportation options and rising delivery costs are an aspect that has a negative impact on the situation, too,” Oevermann told us. 

In bread production, ingredients are a basic requirement for good baking results. “Here, bakers should react flexibly and check whether they can optimize their manufacturing processes by using our pre-dough plants and technology (e.g. our DIOStart starter cultures) to produce sourdough. Products based on sourdough gain an extended shelf-life and intensive softness, while ingredients such as sugar and fat can be reduced,” the expert added. Then, it is also important to check whether the machine park is well equipped, that the sick leave can be compensated for by employees. Missing packaging materials and restricted transport routes can also change the daily business, he illustrates.

Oevermann said they often work at their capacity limits, as the majority of their customers are in the industrial sector. He recommends that manufacturers think about modern systems that can produce larger quantities in a faster time and digitally optimized. “We see ourselves here as a service provider who, in close cooperation with the customer, implements the best result for his company and his task,” Diosna’s CEO stated.

In the current situation, Diosna has been prepared thanks to continuous optimization of its processes so that it already has access to many of the modern production facilities via remote maintenance. Their technicians can provide service via video calls for prompt and uncomplicated problems. Diosna has also a worldwide network of selected partners who, as far as possible and permitted, supports the customers on-site. Their maintenance kits in different versions are particularly popular, the CEO highlights. This gives the operator the option of ordering spare parts, e.g. to be replaced by in-house technicians, so that the machine can be used again quickly, for example.

Limagrain 

French company Limagrain also stresses the utmost priority is to ensure the safety of  employees, while organizing production efficiently in order to respond to the bakers’ needs. Pauline Arramy, marketing manager at Limagrain, told us that they defined continuity plans to secure the production and have employees able to work. They are prepared in case of illness or suspicion of illness of some coworkers and have the most sensitive people in their teams (like those with diabetes, or pregnant) staying at home for their safety, the marketing manager said. 

In the plant, Limagrain has implemented safety measures including: 

• The workers are isolated from each other while on the job, but also in the break room and in the changing rooms, 
• Hydroalcoholic solutions and gloves are available and they can also ask for a mask for greater safety. 
• Digital thermometers also are available to read the temperature if needed. 
• Locations are disinfected every day, as is the work area after each change of control position. 
• All employees who can work from home are doing so. Daily conference calls are organized to coordinate all aspects of our sales ordering process.

Once the organization for workers’ safety has been ensured, production and deliveries are mainly maintained as usual, Arramy underlined. For international deliveries the timing can be a little bit longer than usual due to the transportation, especially to cross the borders.

Regarding the changes in bakers’ needs, Arramy said that some clients asked for higher volumes in their orders. “The production and planning is made to answer as much as we can for additional incoming orders. All our products are requested without a concentration on a certain type of product,” Arramy added; the company does not experience any shortages at the moment. 

“Since we have no issues in terms of production and deliveries, we don’t recommend manufacturers to make more stock than usual,” the expert said. 

Petrow Food Group 

Petrow Food Group does not have any shortages at the moment, but the management of the company is aware that it could become a problem from some international suppliers. They are therefore anticipating delays and re-organizing supplies and production accordingly to limit problems for their customers, said Ian Tatchell, managing director, Petrow Food Group. 

Safety measures for employees’ health were also taken at Petrow. “All people considered at risk are separated and have reduced contact with other employees on the premises,” Tatchell said. All non-essential staff is now working from home, to lower the risk for the whole site. All the key workers in production and operations are adhering to strict social distancing rules. 

As a food production site, Petrow Food Group has strict hygiene procedures in place and has added to this with extra sanitization stations, imposing strict staff break times, regular sanitization of communal areas, and restricting all visitors to site.

Regarding the changes in working times/capacities, order volumes and delivery logistics, Tatchell mentioned that certain domestic delivery haulers have changed delivery routes according to demand and therefore they have found that sharing the delivery plans with some haulers on a more regular basis benefits all.  

The demand for their products has changed, the managing director said: “There are winners and losers here. We have found higher demand for ingredients used to manufacture retail products, such as nut butter, ready meals, bakery and cereals, with many such customers pulling orders forward. On the other side of the business, orders from the luxury goods market and suppliers of cafes and restaurants are declining. We are working with these customers to put orders on hold, and being flexible in supporting them through this period”. 

Tatchell said the company might have some issues with almond supplies from the US and with walnuts from Europe. However, they have enough stock to maintain current orders, he ensured. For now, there are no problems with the supply of packaging materials either. 

There is a limit to what stock they can manufacture due to shelf-life. With this in mind, Petrow is keeping two-three weeks of such stock for those customers who have contracts in order to keep production moving. 

Unicorn Ingredients 

“Unseasonal and variable demand, plus suddenly stopping production plays havoc with stock levels and supply chains, impacting cash flow materially,” Unicorn Ingredients managing director Frank Horan told WorldBakers. “The supply chain is long and complex compared to the ‘Just in time delivery’ demands and instant cancellation of orders from bakeries. So it cannot absorb rapid changes easily. Bakeries have streamlined ranges to maximize output,” Horan added. 

The managing director shared the company’s recent experience with pandemic-caused changes; in some cases, orders have been canceled with only a 24-hour notice. “This is simply pushing problems back up the supply chain since it cannot be slowed down in this manner,” Horan said. He also mentioned that the demand is very variable, with the fast-food industry ceasing almost completely, while whole/health foods are seeing stronger demand.

There are no shortages yet, but if we slow the supply chain down then shortages will appear in two-three months’ time, he anticipated. “We would recommend that they store around one month [of stocks – eds.], assuming demand picks up rapidly and the supply chain will need time to react,” he advised. 

About 80% of Unicorn Ingredients’ staff and overseas offices are working from home. Throughout the supply chain, they adhere to national regulations. “This situation will end; it is just a question of when, but we should plan for that moment now so that our businesses can recover as rapidly as possible and stabilize the industry, to meet consumer demands,” the managing director of Unicorn Ingredients concluded.  

More from our interviews: COVID-19: Status And Support Resources In France