5 Measures To Hinder Food Supply Chain Threats

By Melissa Lind, contributing writer

Identifying threats and taking steps to protect your company from them can make the difference between profits and losses. Here are five of the easily-identified threats for risk avoidance.

As a supply chain manager, it is your job to make sure you get the right supplies and deliver the right products at the right time… all while protecting your company’s bottom line. With the food supply chain expanding globally, you may have some weak spots that need protected to ensure productivity while still maintaining profitability.

Guard Against Invoice Padding
Financial fraud is a big risk for any business and the food industry is no exception. It involves vendor and employee misconduct, such as inflation of employee or contractor expenses and labor costs, collusion, and inflated invoices. When it comes down to it, fraud is simply theft.

Overall trends are fairly easy to identify in invoicing, but little attention is paid to individual line items. Few business leaders use analytics tools to detect vendor waste or outright fraud. Even fewer monitor third parties on a regular basis. Purchasing and procurement personnel should have a view of the whole supply chain, not just the final charge on the invoice.

Arm Against Cyber Attack
Even though the evening news is full of cybersecurity attacks resulting in loss of consumer confidence, a lot of company execs have not addressed the need for protection of critical data and how much it can affect its bottom line. Even if you ensure your company is protected, your suppliers may still be vulnerable, leaving you open to threat.

Threats can come from anywhere, both domestically and internationally. By identifying trusted vendors, eliminating exposure of critical components to outside network interference, and collaborating with your IT, security, and supply-chain personnel, risk can be minimized.

Keep Up With Changing Regulations
As the food supply chain continues to expand globally, more governmental organizations are being encountered and each has different regulations. In addition, new regulations are still in development in most areas geographically, especially when it comes to developing nations.

Within the U.S., the FDA is still developing requirements for food traceability and labeling with FSMA, especially in the fresh food sector. Globally, there is a good deal of movement in the establishment of standardization, but that point has not yet been reached. Because of this, it is essential to keep up with the latest requirements for any region or sector you trade with. Knowing the latest regulations and reporting requirements is the only way to avoid sudden surprises, which can cost your company in terms of for-cause inspections and regulatory fines, both of which affect your bottom line. 

Say Hello To The New Crowd
Many supply-chain executives and managers are “baby boomers” and are quickly nearing retirement. There is an apparent void in the availability of knowledgeable, procurement professionals slated to take the place of those retirees. It is essential that your company begins planning now to fill upcoming vacancies with knowledgeable professionals. You may need to look at some of the up and coming supply chain management training programs that are cropping up at academic institutions.

Your company may also need to consider enhancing your training programs to develop your own talent Even though implementation may seem expensive, offering specialized training to current and potential employees can improve your company’s bottom line by enhancing job satisfaction and employee loyalty.

Minimize Conveyance Of Cost Increases
The rate at which food costs are rising is higher than the industry has experienced in recent history. To add fuel to the fire, the hikes are not expected to stop, as droughts across the U.S. continue and food demand goes up in developing economies.

Your company will likely have to pass some of the sourcing and producing costs onto your end consumer, but may be able to cut other areas through consolidation of transportation services and shaving of unessential expenses. In tough economic times, creativity can help your company get the competitive advantage over those who are just passing the buck.