{"id":5183,"date":"2022-04-20T14:45:34","date_gmt":"2022-04-20T13:45:34","guid":{"rendered":"https:\/\/www.danskofoods.com\/?p=5183"},"modified":"2022-04-29T06:48:05","modified_gmt":"2022-04-29T05:48:05","slug":"supplychain","status":"publish","type":"post","link":"https:\/\/www.danskofoods.com\/en\/supplychain\/","title":{"rendered":"Global Supply Chain Challenges and their Impact on the Dairy Supply Chain"},"content":{"rendered":"

As most are now acutely aware, 2021 was one of the most disruptive years on record for our supply chains, and 2022 doesn\u2019t seem to want to let up either. We have all faced challenges posed by Brexit, Covid-19 and the Coup de gr\u00e2ce: a transport crisis!<\/p>\n

Brexit\u2019s ongoing impact on the dairy supply chain<\/span><\/h3>\n

2021 certainly had its fair share of challenges for the Dairy Supply Chain in particular. The year started with uncertainty around Brexit (you could argue that it ended similarly) and operating under the new rules and processes for imports and exports from EU to UK and vice versa.<\/p>\n

We saw wave after wave of Covid, and national lockdowns as a result. And then\u2026. the real problems started to kick in leaving the overall Supply Chain strained at many different points.<\/p>\n

Bottlenecks at various points of the supply chain interacting with each other<\/span><\/h3>\n

Global shortages appear to be caused by several interconnected factors: \u00a0COVID creates a shortage of workers, which has reduced production capacity around the world, distorted typical demand due to changing customer purchasing behaviour, and the fact that manufacturing and logistics systems are often operated at or near maximum capacity. Factories, ports, and trucking capacity are expensive, so they’re designed to continuously run at maximum capacity meaning there is little to no excess capacity. While running close to capacity makes production and distribution more cost-effective, it also means it doesn’t take much to overwhelm them. Because this is happening at more than one point in the supply chain, it becomes difficult to rebalance supply and demand. When ports are backed up with cargo ships, they often don’t have enough space for so many containers to be unloaded. Adding extra storage capacity for containers will require more trucks to transport the goods quickly, but there are not enough trucks to transport the goods, as so many trucks are holding goods for loading on ships.<\/p>\n

Each bottleneck needs to be fixed and that exposes another bottleneck immediately. This process requires patience, careful analysis, and the cooperation of all stakeholders.<\/p>\n

Labour shortages and their impact on the food supply chain<\/span><\/h3>\n

Labour shortages are being seen in all sectors. A national and international shortage of lorry drivers and workers for food processing plants has led to disruption for food outlets and warnings of empty supermarket shelves that are still prevalent today.<\/p>\n

When we look across the water, to our neighbours in the UK, following worker shortages and transport disruption from Covid and Brexit, major retailers’ stock levels are at their lowest since 1983. A year in which the UK saw Margaret Thatcher win a general election, Jeremy Corbin, Tony Blair & Gordon Brown were newly elected members of parliament, mass unemployment, high inflation\u2026\u2026and to top off the Misery, Liverpool won the old First Division.<\/p>\n

To paint a clearer picture of how the global food supply chain has been disrupted, we need only look to the bigger companies, and the struggles they have faced:<\/p>\n