COVID, supply chains & going digital

There’s a slight misconception COVID has forced vast swathes of businesses and supply chains throughout the Asia-Pacific region to suddenly embrace digital.

While it is true many business have accelerated their use of digital as a result of the pandemic’s impact - some with eye-opening speed - according to Michael Simonetta, Chief Executive Officer of Perfection Fresh Australia, in many cases, businesses like his have been thoroughly digital for a long time.

“We're embracing technology wherever we can now, trialling different technologies, using blockchain or traceability and transparency of movement on products,” he told the recent EIU & ANZ: Bringing the Supply Chain Home virtual event.

“We're embracing all of those things. But that's not just because of COVID. That's because we've got look to the future and not just today.”

Ruth McLennan, Commercial Director, South East Asia at Dairy Farm Group, said there are a number of technology initiatives underway at the pan-Asian retailer, including an “online and offline integration solution for brick and mortar retailers”.

“It's very much in its infancy, but I'm sure since COVID the prioritisation of the program has been revisited,” she said.

Both Simonetta and McLennan joined a roundtable at the event which also featured Tammy Medard, incoming Managing Director, Institutional Australia at ANZ, Patrick Vizzone, Head of Coverage, Hong Kong & Head of Food, Beverage and Agribusiness, International at ANZ; and Charles Ross, Asia Editorial Director at The Economist Intelligence Unit.

Manic

McLennan said the disruption created by the pandemic was beginning to ease, although things were a long way from pre-pandemic normalcy.

“At the very start, it was manic,” she said. “We've been working around the clock for many, many months.”

“I don't think we have gone back to the way it used to be. And so we're just now trying to adjust to what could be the new norm, across all elements of our supply chain.”

McLennan said conversations around the impact of the pandemic at the group were still regular, and many were still adjusting to the new “countries of origin, regulations and restrictions,” of the supply chains they’ve been forced to tap.

“I think if nothing else, [COVID] has actually helped us as an organisation build our agility muscle,” she said.

McLennan said the impact of the pandemic on transport and logistics has been a significant challenge. Simonetta agreed.

“That's impacted us, especially from an export perspective,” he said. “It’s a big challenge and continues to be.”

“With a couple of our major customers, we've had positive outbreaks, which has really put pressure on the supply chain right through to retail.”

Simonetta said an unexpected upside of the pandemic was how it had forced collaboration across participants in supply chains “to another level, in terms of openness and sharing of information”.

“I think  it's really been fantastic,” he said. “Both customers and suppliers are more transparent with what they need, and they're certainly talking more about production planning and forecasting, which is difficult in these times.”

“I think that's what's going to set apart the successful retailers and suppliers, the ones that can forecast accurately; the supply chains with longer-lasting and more-strategic business relationships.”

Moving target

Tech will play a big part in this success in the FB&A sector, Simonetta said, with robotics “a big thing that is being talked about”. However, he warned it would be some time before tech would outpace the effectiveness of humans, particularly when it came to harvesting.

“[Robots] can pick grapes for wine, but they can't pick table grapes to put on a retail shelf,” he said. “That still requires hand labour.”

“But it's happening - and it's not driven by COVID, I might add, it's driven by the sheer fact that there is a shortage of labour worldwide.”

The pace of change means tech remains moving target, Simonetta said.

“It'll keep growing,” he said. “Certainly in our industry within we're embracing technology in every way we can.”

Shane White is Content Manager at ANZ Institutional