3 Challenges Wholesale Seafood Distribution Businesses Face With Best Solutions : Supply Chain Management Challenges

Supply Chain Management Challenges

The demanding warehouse management process flow and logistics requirements for the seafood industry makes supply chain management a bit frustrating. Changes in industry demands and practices have been largely attributed to the pandemic. 

As a result, exporting can be a more lucrative market for wholesale seafood distribution businesses now that there may not be as much domestic demand. Between fishers and farmers and the final seafood consumers, there are approximately 10 to 15 intermediates in the supply chain for seafood.

The perishable nature of fish and shellfish makes it very unstable and spoilage-prone. As a result, the product's shelf life is greatly influenced by temperature and packaging conditions.

Furthermore, improper handling or shipping seafood will cause the product to degrade, resulting in food waste and a drop in sales. Increased traceability and some logistical difficulties may be mitigated by the industry's use of cutting-edge asset tracking and monitoring technologies.

Complex supply chains can be more easily handled thanks in large part to traceability. With the use of cutting-edge asset tracking and monitoring technologies, issues like visibility across the whole supply chain, temperature excursions, and improper handling and storage can be overcome. 

According to some estimates, as much as 35% of all seafood collected is lost or squandered throughout the cold chain. However, other research places the percentage closer to 50%, having a substantial negative impact on both the economy and the environment.

Highlights of Top Challenges

1. Labor Shortage

Due to the severe environment, finding labor has always been difficult for the fish business. Recently, a severe labor shortage, increased labor cost, rising transportation expenses, and rising costs for seafood, eCommerce packaging, and other supplies have complicated the operations of U.S. seafood suppliers, processors, and wholesalers.

- Possible Solutions

For the foreseeable future, there will likely be a severe lack of workers in the United States. There are a number of ways for businesses to continue operating productively in the face of a labor shortage.

• Consider alternative equipment: By exploring multiple developments in technology and equipment, you can accomplish more with fewer personnel.
• Modify your production techniques: For instance, switching from conventional to no-till tillage may allow you to scale back on some field work.
• Deploy new technology: Machines that operate on their own and drones can help to eliminate the need for human work.

2. Lack of Traceability

The existing system has a lot of problems with traceability, which is the capacity to follow a food product through every step of the food supply chain. Many customers want to know where their food products are produced.

When your supply chain has numerous blind spots, efficiency is difficult to attain. Regulatory problems can also result from a product's inability to be tracked and traced, especially when there is a contamination concern.

Wholesale food distributors and receiving customers today need traceability that complies with expanding food safety management system and seafood sustainability standards.

- Possible Solutions

Traceability and tracking have a few ready-made solutions.

• Using QR-codes and scanners: Barcodes have long been used by many companies as a practical method of tracking merchandise. 
• Implementing RFID technology: An even more cutting-edge technology is RFID, which uses tags that can be scanned in bulk to offer real-time supply chain tracking.
• Integrating blockchain technology: As a promising technology to store and share data across a network in real-time, some suppliers are also conducting experiments with blockchain.

3. Communication Gap

The wholesale seafood supply chain may be significantly impacted by a lack of communication among suppliers and fragmented information. This is due to the fact that neither party is aware of what the other is doing or not doing. Ineffective communication breeds inefficiency, mistakes, and unnecessary waste.

- Possible Solutions

There are various technological solutions to solve the challenges of a lack of communication.

• Using cloud-based communication software
• Integrating customer relationship management software and seafood wholesale CRM software
• Implementing vendor management best practices

4. Inventory Shortage and Overfishing

All businesses today fear and experience the terror of the two extremes of the supply chain cycle, scarcity and oversupply of commodities, at some point or another. Inventory that is sitting in large quantities in the warehouse causes loss of all types while the inventory shortages prevents you from meeting consumer demand.

In the event of overstocking, you will have to pay maintenance expenses including security charges, inventory manager fees, and rent for space. If the goods remains in the warehouse for an extended period of time, this expense will continue. You run the danger of losing your consumer base if there is a demand for your goods but you don't have any in stock.

- Possible Solutions

• Track inventory turnover ratio
• Understand wholesale ordering levels and minimum order quantities (MOQ)
• Use wholesale inventory management systems