Industry Insights · 5min read

Top Food Procurement Pain Points

Food manufacturers shared their biggest sourcing, logistics & financing struggles with us.

At foodcircle, we’ve made it our mission to solve food procurement’s biggest challenges. By falling in love with your problems and transforming them into digital solutions, we’re contributing to a more efficient and sustainable food supply chain for all. 

We regularly conduct quantitative and qualitative research with players along the food supply chain to help us prototype ideas and explore new avenues for technological advancements and solutions! 

We asked, you answered — explore some of our most recent finds below:

Communication in traditional procurement structures is tricky for many because it often requires managing the flow of information three ways — between the customer, supplier and logistics partner. The resulting long email chains, lengthy phone calls and time-consuming back-and-forths cause deep frustrations for many procurement partners.

When it comes to suppliers, many manufacturers struggle with finding good suppliers whose product qualities match their requirements in the first place. It’s no surprise then that the frustrations drastically increase when they discover that the quality or pricing of products is subject to inconsistencies and changes. 

There is also the lack of reliance on the availability of products — when suppliers do not have an ingredient a customer needs in stock, the customer is then forced to restart their vetting process from scratch, which again is a resource-heavy endeavour.

Managing logistics also required tackling a tremendous amount of bureaucracy, which eats valuable resources that smaller companies do not have. And the time new or less experienced teams need to invest in researching transport solutions, comparing shipping pricing and exploring which transport solution is the most convenient would be better invested in growing the actual business. 

Some businesses lose tremendous amounts of money by just sticking to one carrier because they simply don’t have the human resources to continually update their comparisons.

Ingredient financing and payment terms vary from supplier to supplier and heavily depend on customers' relationships with their suppliers. While huge conglomerates may negotiate better payment terms, smaller businesses often find they have little or no leverage and are tied to what is offered to them as they are merely a small fish in the sea. 

 

2021 food manufacturer procurement solutions wish list:

• Apps for real-time feedback

• Visible inventory when ordering ingredients

• Reduced MOQs (especially during the prototype phase for startups)

• All-in-one place platforms for more efficient workflows along the entire supply chain

• Digital tools for fast and easy price comparisons

• Shorter lead times

• Guaranteed lead times to reduce buffer stock and, in turn, reduce stock financing costs

• Pre-vetted logistics and financing providers

• More efficient distribution routes

• Lower interest rates for financing

• Better payment terms for smaller businesses

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