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Are Traasdahl, Crisp
FST Soapbox

Creating a Disruption Database in Response to COVID-19

By Are Traasdahl
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Are Traasdahl, Crisp

The spread and impact of the COVID-19 pandemic has been fast and furious across the globe.1 The toll on human life and the economy is being felt by everyone, everywhere. Closures of schools and restaurants, restrictions on social gatherings, the shift to working from home, and other social distancing practices have created sudden, unusually high demand spikes across a number of categories, particularly related to food.

COVID-19 in the Food Industry: Mitigating and Preparing for Supply Chain Disruptions | Attend  this complimentary webinar on-demandRepercussions from these dramatic demand surges are being felt across entire supply chains. Growers, producers, processors, manufacturers, wholesalers, and retailers of all sizes are scrambling to fill immediate shortages.2,3 At the same time, foodservice operators are reassessing their needs in response to government mandated take-out/delivery-only service. Schools are consolidating preparation and pick-up points for breakfast and lunch programs, while on-campus foodservice venues have closed at colleges and universities. Food companies are scrambling to redeploy and redirect existing inventories, as well as forecast short and mid-term demand and production requirements in the face of an unprecedented situation.

In the first several days of disruption, the immediate response is all-hands-on-deck damage control. Rightfully so. But in the flurry of activity, it is critical that those responsible for demand forecasting document the disruption as it is happening. Why? Because sales history is the foundational input of sales forecasting algorithms. Outlier events, such as COVID-19, natural disasters, extreme weather, short-term international trade restrictions, etc., have the potential to distort demand trends if they aren’t recognized and weighted appropriately in forward-looking projections. Formally documenting extraordinary events allows organizations to:

  1. Explain unusual variances to history and/or forecast
  2. Create evergreen institutional knowledge (vs. relying on individuals, scattered notes, and memory)
  3. Build a “disruption database” that can be used to make fact-based overrides to algorithm-generated statistical forecasts when a similar disruption is predicted or occurs in the future.

These “disruption databases” could ultimately serve as the foundation for even more sophisticated disruption forecasting models. As machine learning and artificial intelligence continue to evolve, these models could potentially be customized based on the type of event. Importantly, this annotation of events needs to occur within your forecasting platform so that it is permanent and visible to inform insights for all forecast users.

So, what information should you capture?

  1. Timing of the event
    • This includes specific days or weeks as well as information across the event lifecycle, including pre, during, and post event completion.
  2. Geography impacted
    • The scale of the event should also be noted. Some events are market-specific (i.e., the 2020 Nashville tornado), while others are state or region-specific (i.e. California wildfires, Hurricane Katrina) or result in national or global level impacts (COVID-19).
    • The ship-to locations of your customers relative to the disruption will influence the demand impact of the event.
  3. Customer gains & losses
    • During shortages, changes to current customer strategies should also be accounted for, such as potential volume reallocations. This could mean realignment of current customer distribution centers, temporarily not shipping to or losing specific customers, and/or even securing new customers based on your ability to supply when competitors cannot.
    • Customers may also shut down temporarily and/or delay previously scheduled new store openings. They may also reduce their hours of service and/or increase frequency of deliveries.4
  4. Channel shifts
    • The use of different channels in response to the event should also be captured. For example, in response to COVID-19, grocery retailers are seeing a significant increase in home delivery and click-and-collect orders.
    • Collaborate with your customers to quantify this shift. It may explain your volume trends (if your products are or aren’t typically purchased online) and/or suggest alternative product forms, packaging, etc. to meet both immediate needs and longer-term demand.
  5. Products impacted
    • This includes both items with demand spikes as well as those realizing unexpected demand declines. Shifts may also occur between product forms. For example, some consumer concern about bulk produce has been expressed with COVID-19 since the produce is manually stocked and shopped.5 While efforts are underway to dispel this misconception, it has impacted short-term demand for both the bulk items and their pre-packed counterparts.6,7
    • Adjacent, complementary and/or substitutable items should also be considered.8 Focusing short-term production on core varieties, cuts, forms, etc. vs. a complete assortment may allow a faster return to category (if not item-specific) in-stock levels.
  6. Ordered vs. filled quantities
    • Typically, sales reporting systems only capture what was shipped/invoiced, not what was ordered. Capturing and comparing both enables quantification of the demand “opportunity loss,” which could be factored into future “event” forecast models.
  7. Consumer sentiment and behavioral shifts
    • Specific to COVID-19, Nielsen IRI and Crisp DemandWatch have identified “phases” of consumer behavior and anticipated category purchase impacts. Noting when these phases occur in your forecasting system can provide insight into performance analysis and inform future projections. These consumer patterns may also have application to other extreme events, such as natural disasters.9,10
    • In the face of significant disruptions, look for, leverage, and annotate relevant consumer insights to inform the forecast. Link the annotation to a central archive of relevant research and data to expand access and understanding across your organization.
  8. Raw material, ingredient, packaging, labor or other sourcing issues
    • Note any shortages that impacted your ability to meet demand. Your ability to satisfy demand may be impacted by your own suppliers’ ability to get you the necessary inputs and/or your ability to staff production runs.
  9. Distribution & logistics issues
    • Access to truck, rail, and/or air transportation of products may also be disrupted by the event. Note any logistics constraints to delivering finished goods to customers.
  10.  Competitor activity/disruptions
    • New product launches, delivery systems, ownership, facility fires, labor shortages or disputes, weather patterns, and more that impact your competitors can also influence demand for your products, both in the short and long term.

In the heat of the crisis, this level of documentation may sound burdensome. Even if you start with notes on a scratch pad, email chains, and a collection of industry newsletters, set aside one morning or afternoon a week to annotate within your forecasting platform the factors that impacted demand that week. Continue to post notations in the week each specific disruption-driving factor begins and each week thereafter until its impact has dissipated. Keeping up with annotations as you go along will keep things fresher in your mind and can help inform immediate and near-term plans.

Disruption Database
Disruption databases can serve as the foundation for more sophisticated disruption forecasting models. As machine learning and artificial intelligence continue to evolve, these models can be customized based on the type of event. (Figure courtesy of Crisp).

Don’t forget that pantry loading shelf-stable items early in a disruption may significantly impact post-disruption sales, as consumers work through inventory they have at home. Track this as well. Best-in-class forecasting platforms, such as the example shown in Figure 1, can effectively leverage advanced computing power and analytics to help visualize the impact of COVID-19 on supply and follow-on effects predicted to be felt in your markets. The disruption information you track can be gathered, organized, and analyzed along with trillions of data points from disparate sources to generate high-quality statistical demand forecasts and actionable insights with speed and precision.

When the dust settles on this current event, take the time to document other historical disruptions. Working in reverse chronological order, gather as much date-specific archived data and tribal knowledge as you can, and add it to the annotations in your forecasting platform. The next time a disruption occurs (and it will!), you will be equipped to draw on this “database of disruptions” to proactively predict and respond to future impacts on demand.

References

  1. Coronavirus Disease 2019 (COVID-19). (2020. Centers for Disease Control and Prevention.
  2. Fares, M, Baertlein, L. (2020). Factories shift operations in scramble to restock supermarket shelves. Yahoo! finance.
  3. Redman, R. (2020). Coronavirus: How leading grocery chains are responding to keep customers safe and shelves stocked. Supermarket News.
  4. Wells, Jeff. (2020). Grocers modify store hours to clean and restock amid panic buying. Grocery Drive.
  5. Naidu, R, Fares, M. (2020). Wary of coronavirus, U.S. shoppers skip the fresh produce aisle. Reuters.
  6. Ward, A. (2020). COVID 19 Coronavirus Prevention: A dozen things to know about leafy greens. California LGMA.
  7. Koger, C. (2020). No reason to avoid fresh produce during outbreak. The Packer.
  8. (2020) Nielsen Investigation: “Pandemic Pantries” pressure supply chain amid COVID-19 fears. Nielsen Insights.
  9. (2020) Key consumer behavior thresholds identified as the coronavirus outbreak evolves. Nielsen Insights
  10. (2020) IRI Brief – COVID-19: Impact on CPG and Retail. Retail Wire.
Allison Kopf, Artemis

How Technologies for Cultivation Management Help Growers Avoid Food Safety Issues

By Maria Fontanazza
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Allison Kopf, Artemis

Visibility, accountability and traceability are paramount in the agriculture industry, says Allison Kopf, founder and CEO of Artemis. In a Q&A with Food Safety Tech, Kopf explains how growers can take advantage of cultivation management platforms to better arm them with the tools they need to help prevent food safety issues within their operations and maintain compliance.

Food Safety Tech: What are the key challenges and risks that growers face in managing their operations?

Allison Kopf: One of the easiest challenges for growers to overcome is how they collect and utilize data. I’ve spent my entire career in agriculture, and it’s been painful to watch operations track all of their farm data on clipboards and spreadsheets. By not digitizing processes, growers become bogged down by the process of logging information and sifting through old notebooks for usable insights—if they even choose to do that.

Allison Kopf, Artemis
Allison Kopf is the founder and CEO of Artemis, a cultivation management platform serving the fruit, vegetable, floriculture, cannabis, and hemp industries. She is also is an investment partner at XFactor Ventures and serves on the boards of Cornell University’s Controlled Environment Agriculture program and Santa Clara University’s College of Arts and Sciences.

I was visiting a farm the other day and the grower pulled out a big binder. The binder contained all of his standard operating procedures and growing specifications for the varieties he’s grown over the past 20 years. Then he pulled out a pile of black notebooks. If you’ve ever worked on a farm, you’d recognize grower notebooks anywhere. They’re used to log data points such as yield, quality and notes on production. These notebooks sit in filing cabinets with the hopeful promise of becoming useful at some point in the future—to stop production from falling into the same pitfalls or to mirror successful outcomes. However, in reality, the notebooks never see the light of day again. The grower talked about the pain of this process—when he goes on vacation, no one can fill his shoes; when he retires, so does the information in his head; when auditors come in, they’ll have to duplicate work to create proper documentation; and worse, it’s impossible to determine what resources are needed proactively based on anything other than gut. Here’s the bigger issue: All of the solutions are there; they’re just filed away in notebooks sitting in the filing cabinet.

Labor is the number one expense for commercial growing operations. Unless you’re a data analyst and don’t have the full-time responsibilities of managing a complex growing operation, spreadsheets and notebooks won’t give you the details needed to figure out when and where you’re over- or under-staffing. Guessing labor needs day-to-day is horribly inefficient and expensive.

Another challenge is managing food safety and compliance. Food contamination remains a huge issue within the agriculture industry. E. coli, Listeria and other outbreaks (usually linked to leafy greens, berries and other specialty crops) happen regularly. If crops are not tracked, it can take months to follow the contamination up the chain to its source. Once identified, growers might have to destroy entire batches of crops rather than the specific culprit if they don’t have appropriate tracking methods in place. This is a time-consuming and expensive waste.

Existing solutions that growers use like ERPs are great for tracking payroll, billing, inventory, logistics, etc., but the downside is that they’re expensive, difficult to implement, and most importantly aren’t specific to the agriculture industry. The result is that growers can manage some data digitally, but not everything, and certainly not in one place. This is where a cultivation management platform (CMP) comes into play.

FST: How are technologies helping address these issues?

Kopf: More and more solutions are coming online to enable commercial growers to detect, prevent and trace food safety issues, and stay compliant with regulations. The key is making sure growers are not just tracking data but also ensuring the data becomes accessible and functional. A CMP can offer growers what ERPs and other farm management software can’t: Detailed and complete visibility of operations, labor accountability and crop traceability.

A CMP enables better product safety by keeping crop data easily traceable across the supply chain. Rather than having to destroy entire batches in the event of contamination, growers can simply trace it to the source and pinpoint the problem. A CMP greatly decreases the time it takes to log food safety data, which also helps growers’ bottom line.

CMPs also help growers manage regulatory compliance. This is true within the food industry as well as the cannabis industry. Regulations surrounding legal pesticides are changing all the time. It’s difficult keeping up with constantly shifting regulatory environment. In cannabis this is especially true. By keeping crops easily traceable, growers can seamlessly manage standard operating procedures across the operation (GAP, HACCP, SQF, FSMA, etc.) and streamline audits of all their permits, licenses, records and logs, which can be digitized and organized in one place.

FST: Where is the future headed regarding the use of technology that generates actionable data for growers? How is this changing the game in sustainability?

Kopf: Technology such as artificial intelligence and the internet of things are changing just about every industry. This is true of agriculture as well. Some of these changes are already happening: Farmers use autonomous tractors, drones to monitor crops, and AI to optimize water usage.

As the agriculture industry becomes more connected, the more growers will be able to access meaningful and actionable information. Plugging into this data will be the key for growers who want to stay profitable. These technologies will give them up-to-the-second information about the health of their crops, but will also drive their pest, labor, and risk & compliance management strategies, all of which affect food safety.

When growers optimize their operations and production for profitability, naturally they are able to optimize for sustainability as well. More gain from fewer resources. It costs its customers less money, time and hassle to run their farms and it costs the planet less of its resources.

Technology innovation, including CMPs, enable cultivation that will provide food for a growing population despite decreasing resources. Technology that works both with outdoor and greenhouse growing operations will help fight food scarcity by keeping crops growing in areas where they might not be able to grow naturally. It also keeps production efficient, driving productivity as higher yields will be necessary.

Beyond scarcity, traceability capabilities enforce food security which is arguable the largest public health concern across the agricultural supply chain. More than 3,000 people die every year due to foodborne illness. By making a safer, traceable supply chain, new technology that enables growers to leverage their data will protect human life.

Three Ways Sanitation Automation Helps Food Processors Reduce Costs

By Bob Ogren
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Sanitation in a food processing plant is a large-scale effort that many organizations see as an added cost of doing business. Yet, it’s essential and can have costly consequences if done improperly.

Because time is money and facilities want to avoid any necessary downtime, the window for completing proper sanitation procedures is small. Many food processors simply put more people on the job while requiring them to work third shift, hoping to get things done faster.

Automating certain sanitation procedures in your plant can provide real benefits, many of which will help reduce the costs associated with food safety and keeping your facility clean. Here’s a look at the three main ways food plants can save by implementing automated sanitation solutions.

1. Resource Management

When you invest in sanitation automation, one of the biggest advantages is the increased understanding of how resources are being used. This knowledge and improved visibility gives you control of how resources such as water and chemicals are used during sanitation.

Butcher cleaning the floor at meat factory. Image courtesy of Birko.

Perhaps the most significant area in which facilities experience savings is through reduction of water usage. Automated solutions improve the efficiency of rinse cycles while ensuring appropriate water pressure is being used. Every plant has unique water needs, but you should expect water savings between 30% and 50%, depending on the solutions that are applied.

Sanitation automation will also lead to a reduction in energy costs. Using less water means less energy is required to heat that water. Advancements in sanitation technology have made certain solutions more energy efficient. Features such as multi-stage pumps for full alternation, motors that allow pumps to ramp up and down as needed, and flow switches that send pumps into “hibernate” mode help reduce electricity usage.

Waste water from food processing also needs to be treated before it goes down the drain. Less water treatment means fewer chemicals are needed.

Food processors that introduce automated sanitation solutions will use cleaning chemicals more efficiently. Automation ensures chemicals are dispensed precisely where they are needed at the correct concentration, without any over spray. Again, while every situation is unique, most facilities can expect a 20–30% reduction in chemistry costs.

In the end, you will have a very clear picture of the amount of water and chemistry needed to complete sanitation, and you’ll know the amount of time it should take. That means you can plan for more uptime.

Overall, not only can automation help food processors make efficient use of resources, it also makes them more sustainable.

2. Labor Costs

Labor is yet another resource that can be more effectively managed when there’s an investment in sanitation automation. The labor market is tight, and it is becoming increasingly difficult to hire the people needed to carry out sanitation work.

Sanitation often involves menial and tedious tasks that also require attention to detail. It usually entails working overnight when production stops, and certain responsibilities can be dangerous. At the same time, minimum wage is rising, and many organizations are looking to reduce labor costs.

Introducing sanitation automation can certainly cut labor expenses and remove the need to hire more people, but more importantly, it can make the workers you do have more productive. Automation should be used to eliminate menial tasks from sanitation workers. For example, instead of a person standing in front of a conveyor belt and spraying it down with a hose for hours on end, the job could be easily automated.

We worked with a brewer who was having two employees take as long as three hours to clean a filler. By automating that task, they turned it into a 45-minute job and allowed those employees to refocus their efforts. Plus, the before and after pictures of the equipment show a visible difference in cleanliness.

You can trust an automation solution to do a consistent job, and it will never call in sick.
Still, you’ll always need to have “boots on the ground” and human eyes evaluating sanitation. Automating certain sanitation practices will free up employees to work on more important duties that add value and keep them engaged in their work.

3. Mitigating Safety Risks

The most important thing sanitation automation provides is more peace of mind. No one wants to lose sleep worrying about a failed inspection or the potential for a worker injury. Automation reduces the risk of product contamination and lessens potentially dangerous situations for employees.

For instance, spiral freezers are particularly precarious areas to clean. Automating its cleaning process eliminates the need for a worker to maneuver through an unsafe space, reducing the likelihood of a workplace injury.

Human labor can also lead to human error. But, when sanitation tasks are automated, they become more consistent and easily repeatable. This is especially important for cleaning hard-to-reach problem spots that become harborage areas for bacteria. There may be a tendency among human workers to skip areas they can’t reach, or fail to clean them properly, but a machine cleans everything the same every time.

The monetary risk of contamination inside your facility is significant. For example, if Listeria were to take up residence in a plant, it could cost your business millions of dollars.

According to a study from the Food Marketing Institute and Grocery Manufacturers Association, the average food product recall will have direct costs of $10 million while indirect costs could reach into the hundreds of millions. That’s because you also need to consider the ongoing cost of a damaged brand reputation, not to mention lost productivity from business interruptions and lost profits from disposing of potentially contaminated product.

Sanitation Automation: The Future is Now

There are many reasons to start implementing automation into your food and beverage plant’s sanitation practices. Food processors in Europe have been quicker to adopt these solutions because many of the same issues U.S. manufacturers face, such as wages and resource scarcity, can be even more pronounced overseas.

As the labor market in the United States presents challenges for hiring managers, and drought conditions in some regions make water a scarce commodity, automation presents an opportunity to bring your facility into the future. Add to those concerns the increased regulations from FSMA, and there is even more reason to invest in dependable sanitation solutions.

Food processors need to find trusted advisors who can evaluate operations inside the plant and look for ways to implement automation in ways that make the largest impact.

While there is certainly an upfront cost in automating sanitation, the potential savings and added visibility these solutions provide won’t take long to pay for themselves. In most cases, facilities that invest in sanitation automation will see a return within a year to 18 months. If done properly, you can achieve impressive cost-saving results through automation.