The Poor Shape of Global Food Supply Chains Today
It is no secret that the ongoing pandemic has wreaked havoc in global food supply chains – think food waste from border lockdowns, farm labour shortages and inflexible supply chain, so much so that we have the United Nation declaring an “impending global food emergency” due to the pandemic, and the World Bank warns of food supply chain disruptions threatening food availability.
Managing Cash Flow is Imperative for Survival and Growth in Covid19
Given the added chaos of covid19, it is now more important than ever to ensure that agrifood companies, such as fresh produce importers and exporters, to maintain a healthy cash flow for sustainable growth. One way to do that is to accelerate and unlock working capital trapped within supply chains.
However, given the complexity of modern global food supply chains, agrifood players typically do not have full visibility of their supply chain, and more importantly, the physical product that they are selling – once the apples leave the packing houses, growers, packers, and exporters usually do not have real-time visibility on the apples as they travel further downstream.
Visibility is Key to Managing Recovery
Real-time data on your physical food products lays the essential groundwork for actionable insights, predictions, and inputs to planning supply and demand, and cash flow requirements. In other words, visibility is key.
How can we do create such visibility?
The first step: digitizing your products.
To begin, DiMuto 4T Suite Solutions digitizes physical products with unique DiMuto QR codes, assigning every single carton and every single product a digital identity that can be tracked as it moves along the supply chain.
How to ascertain the condition of your product?
DiMuto 4T Suite Solutions uses our proprietary DACky to capture a photo of every single carton before it leaves the packinghouse, and also at the point of receipt, successfully providing visibility of product conditions at critical points of the supply chain.
These are then recorded on our DiMuto Platform – a single platform recording all details of every single trade transaction.
Building Trust with an Ecosystem of Visibility
Supply chain visibility is not achieved in silos; for true full visibility, solutions need to create an ecosystem of visibility that work for all relevant players in the food supply chain.
How can we make sure there’s visibility for all relevant stakeholders?
The complexities of food supply chains cannot be ignored. For true full visibility, solutions need to address operational concerns as well as different existing systems used by the multitude of players in a single supply chain.
DiMuto 4T Suite Solutions uses a combination of blockchain, AI and IoT to solve this challenge. We provide DACkys that are able to cater to manual, semi-automatic and automatic packing lines. Our Platform is able to record all relevant documents from both exporters and importers, sellers and buyers. Our Receiver App is a low-barrier mobile solution for downstream players.
It is only with an effective ecosystem of technology can full supply chain visibility be achieved, and the right data be collected.
Visibility Helps Unlock Working Capital
Given the disruptions and inventory shortages in the covid19 environment, it is imperative that procurement and finance/treasury functions to be more aligned. Thus, the next part to the equation would be getting product visibility to get more working capital.
How is this applicable in fresh produce industry?
Oftentimes, trade disputes lengthen cash conversion cycle. Visibility of the condition and quality of the product effectively accelerates the cash conversion cycles by resolving trade disputes in an efficient and factual manner. Learn how we have solved trade disputes for a Peruvian avocado supplier here.
Furthermore, having this added visibility of perishable food products opens up trade financing opportunities and unlocks working capital from receivables. Supplier financing supplier financing ensures financial viability of suppliers and resilience of supply chains while allowing buyers to maintain extended payment terms. Read about how we helped finance US$2million worth of fresh durian trade here.
In essence, we need to have product visibility throughout the supply chain and be able to utilize this visibility to unlock more working capital.
With a better managed cash flow, businesses then can better respond to and recover from disruptions brought by covid-19.