SUPPLY CHAIN & LOGISTICS
SUPPLY CHAIN OR LOGISTICS?
The words supply chain and logistics are often interchanged, but in fact according to Michigan State University experts, supply chain management activities “…are strategic decisions set up in the operational framework within which logistics is performed.” On the other hand, they define logistics “…as activities – transportation, warehousing, packaging and more – that move and position inventory and acknowledge its role in terms of synchronizing the supply chain.”* No matter how you define the two terms, West Michigan’s supply chain and logistics networks are well positioned to support the food processing industry.
SUPPLY CHAIN & LOGISTICS CHALLENGES
The food processing industry has always recognized the importance of having a robust supply chain and logistics process, but recent events have brought to light that more needs to be done. The COVID-19 global pandemic demonstrated multiple issues within the supply chain including employee health impacts and consumer demand that exceeded the ability to meet it, especially factoring in employee sickness and plant closures.
The February 2021 winter storm with its severe impacts in Texas and nearby states also demonstrated how vulnerable food processing supply chains can be to natural disaster events that emerge very quickly and often widespread. In the case of the food processing industry, sometimes the impacts are felt in areas outside of the natural disaster area when the supply chain feeds out state areas such as seasonal food products that are grown in Mexico and transported throughout the United States through border states like Texas that felt that brunt of the February storm. While the WMFPA has had a Supply Chain and Logistics pillar since it was initially formed as the West Michigan Shoreline Food Processing Initiative in 2017, recent events warrant even a greater focus on the Supply Chain and Logistics pillar. For example, making sure the sector is tracking with current trends such as blockchain. Experts predict that the blockchain market in the agriculture and food supply chain will reach a volume of $948m by 2025.** The WMFPA has access to resources second to none in the sector including Michigan State University Eli Broad School of Graduate Management which ranked #1 in Supply Chain and Logistics graduate degree programs by U.S. News & World Report in 2020.
SUPPLY CHAIN & LOGISTICS FUTURE
The West Michigan region is well positioned to link the food processing industry with markets throughout the world. The Michigan Department of Agriculture and Rural Development cites that every $1 in export activity generates another $2.93 in economic activity, meaning Michigan’s total agriculture exports of $2.8 billion have a local impact of an additional $8.2 billion. The Region’s highway, air, rail, and water transportation access is second to none with the majority of the logistics infrastructure already in place to serve the needs of the food processing sector locally and across the globe. The WMFPA will continue to work with both users and supply chain-logistic providers on strategies that merit strong consideration, especially in an era of tight financial and human resources, climate change, competition, and global events. Cross Lake Shipping (CLS) between West Michigan and other states throughout the Great Lakes, has been studied and may ultimately be implemented in time. The WMFPA is working with others on new technologies that extend the shelf life of perishable products that are transported by reefers. As much as 30% of food produced globally is wasted, some of which occurs during transport.
