Economic Realities and the Promise of Technology in the Supply Chain

Jun 14, 2024

By: Doug Baker, Vice President, Industry Relations, FMI

The current economic landscape presents challenges for the grocery supply chain. Multidecade-high inflation has proven durable heading halfway through 2024. The Federal Reserve continues to hold firm on its interest rate policy in the near term. This on-going monetary intervention has a lagging effect, so constraints in consumer spending and sticky inflation continue to be problematic.

There will continue to be unexpected twists and turns that will require continued grocery supply chain agility, resilience and adaptability. Global economic markets, geopolitical and trade risks, all will continue to impact the food industry supply chain both on the demand and supply side.

The grocery supply chain has slowly moved towards equilibrium; however, trading partners will need to carefully evaluate business planning conversations based upon changing market conditions.

The food industry requires strategic investments to boost capacity, agility, visibility and efficiency in a climate of potential softening of consumer demand. Several analysts predict further economic contraction in consumer spending and the best case could be a soft landing engineered by the Federal Reserve. No one is completely sure what will happen, until it happens. Volatility continues to be the norm. Whatever economic scenario unfolds over time, supply chain professionals remain laser-focused on the fundamentals in the areas of demand forecasting, supply chain planning visibility, inventory management, distribution capacity, fulfillment and asset utilization.

The question that is top of mind to grocery retailers and suppliers alike is where will growth come from? This is closely followed by how we can become more efficient faster?

It’s not an exaggeration to state that technology is redefining the food industry. As digital transformation accelerates, the grocery industry is experiencing a seismic shift in consumer behavior and business operations. All in the backdrop of economic challenges that continue to challenge traditional go-to-market strategies.

The potential for technology to further revolutionize the grocery industry is immense. As the industry moves forward, it will be essential for business leaders to stay abreast of emerging consumer behaviors, changing economic conditions and technology innovations.

The FMI Supply Chain Forum will be held in Nashville on Sept. 16-18, 2024. The focus of the forum will be on driving efficiency and resiliency. Two sessions that will be of great value to attendees are:

State of Supply Chain: Economic Realities & Outlook

The food and FMCG supply chains are facing a diverse array of challenges and opportunities. From escalating inflation and evolving consumer behaviors to intricate supply chain challenges and global trade uncertainties, numerous factors shape the industry landscape today and in the foreseeable future. Join us as we delve into the complex relationship between economic influences and the dynamic dynamics of the supply chain within the industry.

Next Generation Product and Packaging Identification

In an era of increasing consumer awareness and regulatory scrutiny, the ability to accurately identify and trace products and packaging is paramount. We will explore cutting-edge technologies and innovative solutions revolutionizing product and packaging identification. From advanced barcoding systems to RFID, discover how these next-generation technologies are reshaping the way we track, authenticate, and manage food products from farm to fork.

Whatever the future looks like, companies must adapt to today’s economic realities and technological innovations and take a long-term view of their supply chain performance capabilities and goals.