NYC's Bagel Shops Are Facing a Cream Cheese Shortage Crisis. Here's How to Avoid a Supply Chain Disaster. Tactics companies can use to ensure their shelves are stocked at manageable prices.
By Cole Garson
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New York City bagel shops are facing a cream cheese shortage that has New Yorkers collectively panicked. Busy commuters are in jeopardy of losing a metropolitan staple that has, just maybe, been taken for granted. The supply chain crisis has impacted nearly all facets of the market, and the food industry is no exception. Significant congestion at ports, as well as a scarcity of raw materials and a dwindling labor force, are impacting America's small and medium-sized businesses, threatening America's most treasured foods.
At iBrands Global, our supply chain platform services the ecommerce, retail, and foodservice industries, with in-house processes spanning design, sourcing, manufacturing, finance, logistics and distribution. We work with our partners, including US Foods, Sysco, and Aramark, to ensure product integrity, speed to market and customer satisfaction. Over the last two years, the food services industry has battled on the front lines — from accessing PPE for workers and consumers alike, to battling supply chain crises and labor shortages — and throughout it all, we've seen first-hand what works, and what doesn't. So, what can companies in the industry, from delis to grocery chains, do to ensure their shelves are stocked at manageable prices?
Know the Facets of Your Business
One impact of the pandemic, and resulting supply chain disruptions, is that business owners are being forced to make more decisions, with greater consequences. Previously, firms could thrive by relying on intermediaries, from sourcing agents and freight forwarders to insurance and customs brokers. Restaurants and shops carried on predictably season after season. Proprietors worked on the business; outsourced servicers worked for the business. This was business as usual.
Related: How to Prepare for Major Supply Chain Disruption
As the pandemic rages forward, supply, pricing and speed are no longer predictable. Firms must analyze the efficacy of third-party services and maximize efficiencies. Owners must evaluate working direct. They must make informed decisions about their international sourcing, their domestic partners, and various agents. When services can be brought in-house or components cut, owners can keep up with the increased costs of production, while remaining competitive. Difficult environments do create opportunities for those equipped with the tools for cerebral decision-making. Knowledge is power.
Optimize Logistics
The pandemic has been a catalyst for a deep shift into a consumption economy. Consumers are spending their money on products and food as opposed to events and experiences. An overheated economy combined with the shutdown of ports, the scarcity of containers and widespread labor shortages, has led to a broken supply chain. All the while, American businesses are battling to keep their shelves stocked, cream cheese included.
Key to this? Think strategically about the logistics of your business. Drayage costs, the pick-up and return of containers from the port are astronomical. Business owners must limit the time and distance containers ever move in the wrong direction. The fewer people that touch the goods the better. The quicker the goods move in and out the better. No wasted space on trucks and no wasted movement. Stay away from congested ports or pay more for exclusive terminals. These decisions are critical for an industry such as the food service which is component driven. Products like cream cheese are made on-site with a variety of ingredients that need to be kept refrigerated and stored properly. Making smarter logistics decisions means thinking critically about logistics. The current environmental calls for this.
Related: Why Digitizing the Supply Chain Will Be the Next Global Technology Movement
Stock Is King
Due to the delays in shipping, having stock is crucial. Retailers and end users have been burned time after time. There is no patience in the market for "tomorrow" or "next week". Every sale lost is, potentially, a customer lost forever. On the flip side, every sale captured, even as a fill-in, has potential for the future. Market share is at stake.
For companies buying well, now is the time to take in stock. Inflationary pressures and consumption are going nowhere. Build-in delays and plan well in advance. Stock is most certainly king.
As we've seen with our favorite food items, the supply chain crisis is hitting where it hurts. By making critical decisions and gaining a deeper understanding of how your business operates, the supply chain crisis won't be avoided, but it can be mitigated.
Cole Garson is the COO of iBrands, and serves as co-Head of its PPE initiatives at Remcoda. Garson is responsible for building and leading the senior executive team and setting the strategy and direction of the Company, especially pertaining to strategic sourcing, business programs and acquisitions.
