By Melanie Franner
One of the lingering effects of the ongoing pandemic, combined with labour shortages, has undoubtedly been the assault on supply chains. The result, as already evidenced in parts of the country, has been supply shortages with empty shelves are far more common occurrence.
Supply chain disruptions are also playing into the rise in food prices. Statistics Canada recently reported that the food inflation rate in the country has reached 7.4 per cent and that it will most likely rise again in the coming months.
Even before the surge of Omicron, the trucking industry was facing one of the highest job-vacancy rates in Canada, with almost 23,000 driver positions unfilled as of the late summer. This puts into jeopardy Canada’s access to much of the roughly $26-billion worth of food imported from the U.S. every year. About 70 per cent of that is brought to Canada on a truck. The shortage of drivers will continue to persist for the foreseeable future.
Indeed, getting goods ordered, manufactured, and delivered is now a process that requires patience, insight and – at times – sheer luck.
The authors of a Statistics Canada report, Analysis on supply chains in Canada, first quarter of 2022, describe it as follows:
“The COVID-19 pandemic has renewed interest in supply chains and put a spotlight on the strength and resilience of supply chains. The tightening and closing of borders, the restrictions on the movement of people and goods, the closure of businesses as strategies to control the spread of the virus, and the impact of the virus on employees, all had the potential to disrupt supply chains…”
The report goes on to state that nearly one third (32.1%) of businesses surveyed expect difficulty in acquiring inputs, products or supplies domestically over the next three months – up from over one quarter (27.2%) since last quarter.
Of those businesses that expect maintaining inventory levels to be an obstacle over the next three months, half expect these difficulties to continue for six months or more and over one quarter (28%) are uncertain as to how long these challenges will persist.
“We used to have a 12-week turnaround from our plant in Vietnam,” says Frank Gallucci, President, Amici Enterprises Inc. “Now we are looking at five to six months. Cost of materials has increased a minimum of 10% due to resin costs. Shipping costs have gone from US$3,500 to US$18,500 per container…”
Amici Enterprises supplies Envirowrappers, reusable pallet wrappers (an alternative to stretch wrap) for use in manufacturing and distribution. To help mitigate supply chain issues, the company has moved more production to its Calgary facility and is exploring opportunities to add new semi-automation equipment.
Accent on automation
“The pandemic exacerbated an existing situation,” explains Mario Fontes, Director of Sales and Marketing, Vidir Solutions. “It sped up the grocery industry’s adoption of new technologies, new software and new solutions.”
Vidir Solutions provides vertical motorized storage carousels and display systems that provide warehousing and inventory-management efficiencies.
“In the past, the grocery industry had to adopt solutions applicable to ambient models,” continues Fontes. “The pandemic gave everyone a taste of those models and demand for new solutions really began to grow.”
Fontes credits the pandemic with speeding up grocery retailers’ research and adoption of automation technologies. He also sees the emergence of industry standards as a sign that technology and automation are here to stay.
“A lot of investment has already been made,” he says. “But we’re going to see a lot more over the next few years.”
Rosy Amlani, CEO, ColdChase, also speaks to increased automation.
“Today’s customers expect that products of all types are tracked in real time,” she says. “For product shipments to be safe and provide for traceability, environmental monitoring automation is now necessary. In order to support perishable goods in warehousing and logistics, automated tracking and alert systems, like ColdChase, are now necessary.”
Amlani cites the example of how ColdChase was able to detect that one of its customer’s refrigeration system had failed. The company was able to identify the failure and notify the maintenance team before the customer’s product spoiled, preventing the loss of hundreds of thousands of dollars’ worth of inventory.
“The delivery of perishable items around the world is now taking longer, leading to problems with traceability and food safety,” she explains. “Monitoring and tracking is more important now than ever before.”
Tools of the trade
Industry continues to focus on finding ways to help grocery partners deal with these logistical challenges.
ColdChase, for example, has developed Cellular and Bluetooth wireless tracking sensors for every movement throughout the supply chain to provide live and real-time visibility and traceability for products in shipment and storage. The company’s integrated logistics tracking system provides data analytics and alerts for users.
Vidir Solutions’ offers an automated storage and retrieval system that improves storage density, productivity, safety and customer services. The BOPOS Carousel can be used by BOPIS programs, micro-fulfillment and e-commerce solutions, inventory management systems, and locker exchange programs. Designed to improve Last-Mile Delivery challenges, the Carousel has been adopted by Home Depot Canada and other major retailers.
Amici Enterprises’ Envirowrappers offer an alternative to traditional plastic stretch wrap for the transport of pallets of products. The reusable product provides a closed-loop system to reduce stretch wrap costs, damage claims and waste disposal expenses. Envirowrappers are reusable, repairable, recyclable and washable. They have a three to five-year lifespan and can be quickly applied and removed by a single individual.
The way forward
One would be hard pressed to find a grocer that has not recently experienced shipment delays, empty shelves and rising costs. And it appears that these types of challenges may be here for the foreseeable future.
“How long these issues will remain is the million-dollar question,” says Gallucci, who cites the war in Ukraine, the shortage of truck drivers and port delays as just some of the many factors currently influencing supply chains.
Getting ahead of these challenges may mean re-focusing on supplier partnerships and investing in new technologies. The alternative, it seems, is not an option.