Navigate the ever-changing supply chain

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Pet food manufacturers are facing supply chain disruptions caused by both the pandemic and increased demand, according to Peg Ray, senior director, product development and innovation, AIB International , Manhattan, Kan.

To help ease this pressure, industry experts said long-term planning and moving away from “just-in-time” operations could be key to business operations in the future.

Become more flexible

Dana Brooks, president and CEO of the Washington, DC-based Pet Food Institute, said the pandemic has disrupted human food production, which has impacted the availability of ingredients used in pet food. of company.

Additionally, Brooks said federal and state mandates and incentives to promote the production of renewable fuels have resulted in increased and unfair competition for oils and fats, further straining the supply chain. ingredients. She said this has created an advantage for the energy industry and a disadvantage for companies buying pet food ingredients.

Brooks also noted that bottlenecks at ports have added to the challenges of securing ingredients, and inland transportation issues continue to make it difficult for companies to insure vehicles, drivers and pallets.

Rick Ruffolo, president and CEO of Phelps Pet Products, Rockford, Illinois, said all aspects of the pet food and treat supply chain have been impacted by the pandemic over the past two years. The main concerns from his perspective were product availability, increasing lead times and costs, but he said the most critical issue was the overall unpredictability of the supply chain.

“This unpredictability has compelled us to develop a greater degree of flexibility in our production planning process and expand our supplier partner base to increase our sources of supply for specific ingredients and materials,” Ruffolo said.

He said many planning meetings that used to take place once a month are now happening on a weekly or even daily basis as they assess emergency scenarios based on the latest supply chain information. The company also purchased additional ovens and added more packaging lines in early 2021 to increase production capacity and flexibility.

Jorge Martinez Carrillo, president of pet solutions, ADM Animal Nutrition, Decatur, Illinois, said flexibility can be achieved by designing buffers into end-to-end processes and focusing on environmental sustainability.

Establishing longer-term supply commitments for key commodities has helped canids fill potential production gaps. (Source: Sosland Publishing Co.)

“We believe that a just-in-time supply chain with high levels of carbon emissions, heavy reliance on natural resources and a limited number of suppliers will have no future in pet food” , Carrillo said. “On the contrary, practices that will become a must – not an option – for the industry include the integration of local suppliers of raw materials, the possibility of multiple manufacturing options, the cultivation of large energy-efficient distribution networks, integration of sales and operations planning, real-time data sharing, and vendor-managed inventory.”

Ruffolo said it only takes one missing ingredient to stop production of a product, so making sure the team is working on all potential alternatives ahead of time can help speed up response time to questions. problems that arise. He added that it is important to constantly communicate and keep all stakeholders informed of the latest developments. The more real-time communication there is, the better everyone can get at solving problems.

Empathy and patience are also important because everyone experiences similar issues, Ruffolo said.

“Every ingredient supplier, packaging supplier, contract manufacturer and retail buyer is doing their best to make things happen,” Ruffolo said. “We all want to meet and exceed expectations, but sometimes things just get out of hand. You can only do what you can do.

Brian Moynihan, vice president of supply chain, Alphia, Bern, Kansas, said the company has made product reformulations due to ingredient shortages. Yet it has made its biggest change to long-term planning by placing greater emphasis on such planning to better align supply strategies and meet demand. He also noted that the company has moved some of its planning and purchasing support roles to remote positions, which has given rise to opportunities for new talent as it is no longer limited to recruitment. for positions in specific geographic areas.

Moynihan said items from overseas require longer delivery times, and national droughts in the Midwest and grain supply issues in Canada are also creating some shortage. Ingredients purchased in bulk and just-in-time are particularly challenging, he added, and to help mitigate this, Alphia modified its plans based on a dynamic ingredient supply constraint to maximize production.

Alphia has made numerous schedule changes due to supply chain issues, and by implementing standardized practices, the company can have better control and visibility to mitigate risk to customers, a he noted.

Domestic transportationDomestic transport has been hit by widespread labor shortages, resulting in irregularity in available vehicles and drivers. (Source: ©dell-stock.adobe.com)

Wally Shaw, chief operating officer, Canidae, Stamford, Conn., said exotic proteins like goat and lamb often come from overseas and have been hard to come by. He said more planning was needed to buy more common ingredients such as chicken fat to ensure there was enough time to receive a supply.

Shaw said the company is mindful of its yield and scrap rates, and plans its factories as efficiently as possible. Longer runs are more favorable for better production, and the company stocks more raw material inventory than usual to mitigate delivery interruptions and avoid downtime in extrusion. The company also considered longer-term volume agreements, which was helpful in protecting the company from material shortages.

Fraud prevention and security promotion

As ingredients are stretched and sometimes become scarce, opportunities and motivation for product tampering become possible.

“Supply needs to know that economically motivated adulteration is possible when there is a shortage of supply, which makes food fraud a problem,” Ray said. “Following your company’s supplier-approved protocols for inspections, third-party audits, food safety plan reviews, sampling and ingredient testing is necessary with all suppliers to ensure the safety food is not compromised.”

Although she is not aware of any recent cases of adulteration of pet food products, Ray advised processors to only buy from reputable, reputable suppliers, test their products and provide accurate information. . If an ingredient that was once in short supply suddenly becomes available, it could be a case of food fraud, Ray noted. If a company understands which products are most likely to be adulterated and which adulterants might be used, they can specifically test those products before use.

Ray said staff shortages can lead companies to hire new workers who are unfamiliar with roles in the processing plant and who are not trained in food safety. It also highlights the need to ensure that all staff are trained in food safety despite supply chain disruptions and staff shortages.

Ray also recommended that companies stock up on personal protective equipment and sanitary materials for six months in case there are supply chain disruptions for these materials.

Finding Success Through Stress

Despite the challenges, the companies have been successful. Shaw said Canidae has opted to enter into longer-term volume agreements to secure product volume commitments in 2021, which has helped protect the company in the event of material shortages. Although there were challenges in delivering some ingredients on time, Canids didn’t have any major shortfalls last year, according to Shaw.

Supply chain disruption planningBeing able to adapt purchasing and production planning quickly and efficiently is key to keeping production running smoothly despite supply chain volatility. (Source: Sosland Publishing Co.)

Because ADM Animal Nutrition has experience with various supply chain disruptions, Carrillo said the company has learned to better manage logistical issues and is able to help brands adapt their feed formulations. for pets with ingredients more readily available in their area.

Yet challenges remain. Moynihan said the industry will likely see many of the same challenges throughout 2022.

“Building supply chain resilience, especially through design, has gained traction with all stakeholders,” Carrillo said. “No longer a theoretical goal, the need to consider significant strategy changes throughout the supply chain has become a big issue for decision makers, suppliers, distributors and customers.”

Learn more about supply chain topics affecting the industry on our Operations page.

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