- Mohamed El-Hiti
The Top 5 Challenges in Food and Beverage Distribution Logistics
Updated: Oct 27, 2021
F&B logistics managers are faced with a unique set of challenges, particularly in route optimization.
Supply chain disruptions have become an accepted part of business life in modern times, mostly thanks to Covid-19. When you work in the fast-paced, exciting world of food and beverage distribution, however, these setbacks and delays cost you money.
Food and Beverage Distribution Fuels the Food Service Sector
Challenges faced in F & B logistics include everything from deciding between automated or manual route planning, to finding the HGV drivers to deliver your goods. Global supply chain disruptions have been unprecedented, with 3PL companies stepping in to do the bulk of the heavy lifting.
Current advice to firms suffering because of bad logistical planning, is to identify where you are vulnerable and diversify your suppliers until things steady out.
However, if you are a food and business logistics planner and you need the stock to arrive where you send it, on time, and every time. Failure to meet the demands of your business results in a loss of customers. If there’s one thing we cannot endure in a post-pandemic economy, it is the loss of customers.
The 5 Main Challenges Faced by F & B Dispatch Managers:
If your food and beverage company is currently struggling to keep abreast of the supply chain situation, here are 5 problem areas that you can isolate and improve.
1 – Efficacy of Route Planning
Logistics managers for food and beverage companies not yet using efficient route management software will struggle to fulfill orders on time. Delivery route optimization should be a key focus for your logistics operations, with the option to automate route planning right down to last-mile delivery.
Delivery management software is essential for the betterment of your F&B distribution business. Route optimization software comes in a close second for performance optimization and ultimately for reduced overheads.
To solve this, you can use a route optimization software like Norma and a delivery control system like Altair DC, both of which take some of the pain out of distribution. It can help assign vehicles, meet deadlines, and operate to find the best routes to get the job done.
2 – Interpretation of Product Demand
One of the biggest challenges facing any dispatch manager is ensuring that they have enough stock to fulfill demand, while simultaneously not having too much. Stock left to build too long without being distributed through an innovative coordination system ends up being disposed of as wastage. How you communicate with your distribution centers, therefore, affects the success of your operation.
Automation of stock control is a key variable here. Those who have it, don’t tend to run out of things. Those who don’t, have less control over stock and are therefore at risk of losing profits as a result.
3 – Product Wastage
Wastage can occur because of the inefficacy of oversight in stock control, but there is a bigger problem facing those involved in FMCG distributions. Product wastage can happen on the road, particularly when inefficient pallet wrapping and packaging systems are used.
This costs you money and betrays customer satisfaction. Discarding fresh produce logistic wastage, about 14% of all food is discarded between farm and fork.
Companies should review their packaging processes routinely to tackle the problem of in-transit wastage. Don’t forget that delivery route optimization software could effectively tackle this issue but choose less disastrous routes. It could also result in lesser fuel costs and more deliveries made per day.
4 – Costs of Vehicle Maintenance
Although some F & B distributors choose to use a 3rd party logistics provider, some still go with the old-fashioned in-house delivery model. This means you are delivering the food and drink from your warehouse to the supermarkets, retailers, and vendors that then sell your product.
Fleets cost huge overheads. We have fuel, maintenance, driver hire, insurance, and MOTs to consider, all before our products even hit the road.
Vehicle costs can be controlled through the use of intelligent automated route planning tools. The accuracy of the route will be reflected in fewer fuel costs and fewer trips needed,
5 – Keeping up with Trends
We are seeing social media trends become a real driving factor in the food and beverage distribution market. For example, the recent trend in cold coffee promoted by TikTok and Instagram influencers has led to 29% more young people drinking iced coffee.
This sparked cold coffee to become one of the top 5 delivered items in 2020. If we F & B distributors weren’t aware of that rise, we were losing money to the competition.
Keeping up with trends happens through both observations and software systems. Automated logistical data helps us to meet the demand for these trends by encouraging feedback between the provider and the logistics team.
The Answer Lies in Route Planning Technology:
To create a seamless operation wherein stock is simply and effectively delivered where and when it is needed, your food and beverage business should start with automated route planning software.
Norma is an AI-based route optimization and auto-dispatch software that automates your last-mile delivery by choosing the best route for your fleet. It enables faster and accurate route optimization saving on time spent to make manual routes. It enables you to meet delivery deadlines, improve on customer experience and also generate more profit by cutting on operational costs.
Using a delivery control system like Altair DC enables you to monitor your fleet on transit and also make real-time changes to routes when encountered with delays like traffic jams. It enables you to review automatically generated routes that come from Norma and collect information for better decision-making. Download our case study “Unlock FMCG Possibilities with Norma” to find out the KPIs we achieved with a major FMCG retail distribution operation. For more information, visit softec.ai