Supply chain digitalization: How new technologies are shaping industry transparency

17 Apr 2019 --- Digital technologies are providing the tools to improve traceability, trust and ultimately shape food supply chains to withstand the predicted challenges of the future. A rapidly growing urban population and increased consumer awareness regarding sustainability are prompting food companies and manufacturers to employ digital solutions to ensure product quality. They include investing in technological innovations with a focus on food processing, safety and packaging to distinguish themselves in an intensely competitive marketplace. Industrial Internet of Things (IIoT) technologies such as Big Data Analytics and Artificial Intelligence (AI) are expected to play a huge role in accelerating and streamlining the manufacturing process through advanced automation and analytics.

“Although a late adopter of IIoT, the food and beverage industry is showing eagerness to digitize its assets due to the rising need for traceability,” says Nandini Natarajan, Senior Research Analyst, Industrial team at Frost & Sullivan.

“IIoT will allow food & beverage manufacturers to collaborate and connect across different stakeholders involved in various stages of the food value chain. It enables the seamless exchange of information and goods in different directions, unlike with traditional methods where only linear, unidirectional flow was possible,” Natarajan adds.

The National Science and Technology Development Agency (NSTDA) has begun a two-year research collaboration with IBM to improve the yield of sugarcane in Thailand. AI and automation have made processes easier, more agile and faster. These are important factors that have led many industries, including packaging, to gravitate towards implementing pioneering high-tech systems.

Min-Kin Mak, Deputy Vice President of Corporate Development and Digital Transformation for SIG explains how AI and packaging come together to boost the food and beverage industry.

For Mak, AI will impact packaging from three different angles.

“Firstly, analytics/predictive tools allow a better match of demand and supply by recognizing patterns and analyzing fluctuations on the consumer-demand side and allocating supply capacity along the value chain in time,” he tells FoodIngredientsFirst.

“Secondly, on a production level, AI tools can optimize technical parameters to drive higher output and improve reliability/technical availability of equipment,” he adds.

Thirdly, moving forward in digitizing the pack itself (e.g. through SIG’s Connected Pack solutions), AI can enhance the customer experience by personalizing the content that is associated with a specific pack. “Messages and interactions triggered by scanning a pack can, for example, be specific to the shop the product was bought at or the location the product is being used, etc.,” he notes.

Technology spurs transparency
Last year was dominated by headlines about the rapid onset of climate change and the environmental impacts that various agricultural issues, such as livestock rearing and the world’s general food production and farming models, are having on the planet. Experts, including scientists, world leaders, key industry players and NGOs from all over the world, agree that it’s time to tackle the big environmental issues – and agriculture is at the very core. In addition, the importance of data consistency and transparency is considered the next step in mitigating the threat of climate change.

Issues such as transparency, traceability, sustainability and to a lesser extent how businesses can move toward a circular economy – an economic system aimed at minimizing waste and making the most of resources – are gaining traction in the food and beverage space. Suppliers and manufacturers are beginning to take on these issues with many already adopting 2030 Sustainability Development Goals (SDGs) as part of their company strategy.

One of the key driving factors for change is that the United Nations forecasts the world’s population will eclipse eight billion by 2025, with the most growth in developing countries and more than half in Africa. And, by 2050, it will reach 9.6 billion.

How will the industry be able to meet the new demands that come with that change? The answer, to a certain extent, is technology.

New cutting-edge technologies and devices, scientific breakthroughs and pioneering concepts are needed to ensure food safety and security as the world hurtles towards its unprecedented population increase, while the threat of climate change is ever-present.

Food sourcing and consumption are also major problems environmentally speaking. This is because they often inherently involve issues like deforestation to make way for cattle fields or to grow palm oil or soy; soil quality, greenhouse gas emissions, the scarcity of water and much more. Then, consider the multitude of potential labor issues, particularly in developing countries and often where raw materials are grown and sourced.

Investor concerns around reputational risk and climate change have spurred a new collective call on companies to cut climate and deforestation-related risks in global soybean supply chains. As the global demand for soybean products continues to increase, 57 investors with more than US$6.3 trillion in assets under management are calling on companies to disclose and eliminate deforestation risks in soybean supply chains, with a view to protecting the long-term value of their investments. New tracking technologies, such as drone satellite imagery, offer the opportunity to identify deforestation in real time and force the hand of suppliers’ compliance.

Meanwhile, Olam Cocoa traders have just adopted SCiO, from Consumer Physics, a hand-held connected smart sensor that promises to boost supply chain traceability. The cloud-connected, smartphone-operated device enables real-time decision making by transferring material analysis out of the lab and into the field, production line, or distribution center.

Digital disruption
Bees with backpacks containing micro-sensors and a spectral satellite connected data analytics engine to estimate crop performance are just two examples of how Australian agri-innovation can help initiate an Agriculture 4.0 wave.

This is a new initiative by Austrade, the nation’s trade and investment promotion agency, which was launched in February.

“Agriculture 4.0 is the latest evolution of the agricultural life cycle stimulated by digital disruption at all stages of the food supply chain,” Cassandra Keener, Investment Director Chicago at the Australian Trade and Investment Commission (Austrade), explains to FoodIngredientsFirst.

The initiative aims to establish Australia as a global hub for agricultural and food innovation. It will showcase Australia’s agtech and foodtech capability and highlight its unique technological advances, research excellence, strong record of innovation expertise, as well as the nation’s strong government support and established export channels.

Food security concerns
“Factors such as climate change, population growth and food security concerns have propelled industry and government to seek new collaborative models grounded in data and pioneering innovations,” says Kathryn Guarini, Vice President, Industry Research, IBM Research.

IBM is working on a multitude of technology-led solutions designed to answer the heavy issues burdening the agri-food chain. Most recently, Nestlé and Carrefour joined forces with IBM to give consumers the ability to access information from the first blockchain on a national brand in Europe. Carrefour was one of the founding members to join the IBM Food Trust blockchain network, in October 2018.

In September 2018, US retail giant Walmart also lauded the benefits of tracking lettuce and spinach through the supply chain using blockchain technology. Ramping up food safety became an even more significant challenge following US outbreaks of E. coli in romaine lettuce and salmonella in a number of products from eggs to breakfast cereal.

Another recent example is how the National Science and Technology Development Agency (NSTDA) has begun a two-year research collaboration with IBM to improve the yield of sugarcane in Thailand. NSTDA and IBM, with domain knowledge support from Mitr Phol, the world's third-largest sugar producer and the largest in Asia, will soon begin piloting an intelligent dashboard and mobile application to enable experts to access insights on crop health, soil moisture, pest and disease infestation risk, expected yield and commercial cane sugar (CCS) index. They will leverage the world’s most accurate weather data from The Weather Company and industry-leading AI, IIoT and analytics capabilities.

Sugarcane is an important industrial crop used for sugar and bioenergy in Thailand and around the world. As the world’s second largest exporter, Thailand plays an important role in supplying sugar to the world market, with 9.4 percent of market share in 2017.

“Joining forces with NSTDA to leverage IBM’s AI, satellite remote sensing and advanced weather forecast system to maximize sugarcane productivity will be the game-changing move towards a modern farming practice with the use of Precision Farming for both Mitr Phol and the agriculture landscape in Thailand,” notes Klanarong Sriroth, Head of Innovation and Research Development Institute, Mitr Phol Group.

What’s next?
As technologies continue to emerge as a modern digital protocol for provenance, more suppliers and manufacturers will tap into the benefits of such platforms and devices. Meanwhile, traceability will continue to galvanize, backed by the increasingly demanding consumer who wants to know, in precise detail, where their food comes from and the journey it took to get there. Simultaneously, climate change concerns and how agriculture and food impacts on the environment are becoming increasingly significant global issues.

By Gaynor Selby

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