Lowering costs and expanding margins are critical to any business. But there are three other issues you need to address now. Put it off at your own peril. Here, we look at what those issues are and finally, how to address them seamlessly.
1. CO2 emissions
The global food value chain generates 690 Mt CO2e each year. This is equivalent to a third of global emissions, and 30% of EU emissions. How much of that is generated by transport of food varies according to region. Most research is concerned with emissions from food miles, which measures every step in the chain, from cultivation and processing to the end customer’s plate.
As part of the food value chain, we do know that EU transport can range between 1% to 11% of CO2 emissions. For full-service catering, that figure is 3%.
In the UK, transporting food is responsible for 25% of all miles covered by heavy goods traffic. Food transport alone accounts for 19 million tons of CO2 each year, with refrigeration in transit a major contributor. Figures for EU countries are less clear, as they’re mostly focused on lowering emissions of food production itself. The figures for the UK are helpful, as they serve to give us a wider understanding of the EU.
Most European countries have initiatives in place to lower emissions. Denmark has implemented climate taxes, with a particular focus on the food industry. In the UK, foodservice businesses hoping to win large government catering contracts must commit to net zero emissions. They also have to publish clear and credible carbon reduction plans. The alternative is exclusion from tenders.
2. Customer service
Customer service is the foundation of any business, and it’s no different in the food-service industry.
Food service and catering, however, are more complex than most sectors, which makes delivering outstanding customer service more challenging. Transporting food, drink and their ingredients must meet legal requirements for safe consumption. That, in turn, involves transporting foods at the correct temperatures and arriving at the destination on time. Any delay can harm the quality, safety or shelf life of your foods and ingredients – excuse the pun, but it’s a recipe for disaster where customer levels are concerned.
Another issue: food service and catering have been particularly hit hard by soaring energy costs. In March 2022, 60% of these businesses in the UK reported feeling the pinch, as opposed to 38% across other sectors. Petrol prices also significantly impact the industry.
These issues affect margins, and some companies might be tempted to sacrifice customer service in the name of margins, but that’s the last thing they should do. Your competitors will be more than happy to satisfy your customers’ supply-chain needs.
3. Cyber threats
The food supply chain, tasked with providing safe and uninterrupted access to food, is vulnerable to cyber threats. The supply chain is interdependent. Each has a job to do in ensuring a safe food supply. It only takes one weak link in the chain for a malicious actor to exploit to gain entry into networks. This could result in data theft or even shipments of food being redirected and stolen.
Ransomware can comprise networks so that operations shut down, leading to food spoilage. Most food-service companies have little choice but to pay up or go out of business. The pandemic sped up adoption of digitalization, but this also provides more opportunities for surface attacks. It would be a mistake to assume only large companies are targets. SMEs are just as vulnerable. Cyber crime is about opportunity. If your business holds data, then you’re a target.
Three issues, one solution
The solution is digitalization. Specifically, working on the cloud, which can reduce your operating costs by 20% to 30%.
Your task is to get food and ingredients to its destination within an agreed upon time window. The food might require different temperatures during transit. These are complex matters taken into account during planning. Using Excel spreadsheets or outdated technologies will not ensure efficiencies – and it’s working efficiently that enables you to meet your goals and raise customer service levels.
With an end-to-end digital planner, you can automate workflows and do away with errors. Additional technologies can give the driver in-cab solutions. With a tablet or smartphone, the driver can communicate with your planning and optimization systems – and they can communicate back. The driver can receive route lists, send status updates, log events as they happen, record proof of delivery, and carry documentation on the device. These are efficiencies felt by customers.
Another example of what digital solutions can do: traffic jams or unexpected delays can affect the quality of the food. If you can optimize routes at any point in the journey, you can avoid those problems while addressing CO2 emissions and customer service. For example, eliminating unnecessary miles reduces your emissions. So does avoiding traffic, which prevents your truck from idling at a standstill. You deliver safe, quality food on time, to your customers’ satisfaction.
So digitalization lowers your CO2 emissions and raises customer service levels, but what about cyber security? That depends on the cloud service you use. We strongly recommend Microsoft Azure, backed by 3,500 global cybersecurity experts protecting your business assets and data. If there’s a threat, you’ll know about it right away and can take action. Microsoft Azure is built with multi-layered security. Your data is automatically backed up for you. The Microsoft Cloud is also 79% to 93% more energy-efficient than a traditional on-premise data center, saving you energy costs and lowering your own carbon footprint.
This is simply the best cloud-based system out there.
Results: judge for yourself
We’ve just told you about AMCS Route Planner Plus. Users report that they’ve reduced the number of trucks and drivers needed by up to 25%. They’ve also cut the number of miles, driving time, and CO2 emissions by up to 30%. When submitting tenders for government contracts, you can include your own CO2 emission reductions and outline your digitalization actions.
Users also report planning time reduced by up to 90%. Security is also a part of AMCS technologies, which leverage the power of Microsoft Azure. You should also know that AMCS is SOC 1 and SOC 2 compliant.
To learn more about AMCS Route Planner and our advanced modules, we urge you to get in touch.
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