Baking & Snack - February 2023 - 100

SUPPLY CHAIN
a sale and our customer loses the sale, " Mr. Mullins said.
A few years ago, the American Bakers Association
(ABA) made supply chain a priority as a part of its longterm
strategic plan, which built a better partnership and
communication network with stakeholders prior to the
current crisis. Lee Sanders, ABA's senior vice president
of government relations and public affairs, called supply
chain the No. 1 issue affecting ABA members and mentioned
it will be a key area of discussion during an executive
breakout session at the association's convention
March 26-29 in Amelia Island, Fla.
" It ebbs and flows, and it shifts, so there are different
While bakeries have
tools to manage
supply chain
issues, unexpected
disruptions
sometimes take
them by surprise.
Sosland Publishing Co.
pressure points, " she said.
Ms. Sanders pointed to the availability of eggs, which
skyrocketed in price in 2022 due to reoccurring outbreaks
of the Avian flu. Additional disruptions and high
costs occurred in vegetable oil, butter, sugar and other
key ingredients for baked goods. Carbon dioxide, which
many bakeries use to blast freeze products, recently has
been in short supply. In some cases, she said, bakeries
began stocking up on ingredients, but warehouse space
restricts the amount of inventory at some facilities.
" Everyone's strategy has shifted from having just-intime
deliveries for ingredients to now having 'just in
case,' " Ms. Sanders noted.
While shipping issues at the nation's main ports
have been alleviated, she said, initiatives like the OSHA
Shipping Reform Act, which is being rolled out in 2023,
may provide additional relief. However, the systemic
lack of truck drivers is only going to get worse as 1 million
leave or retire over the next decade. She added the
threatened rail strike that was averted in 2022 allowed
ABA and other groups to air their concerns to Congress
and government officials about the vulnerability of logistics
systems and their importance to the supply chain.
Dealing with a domino effect
Mr. Mullins observed that packaging issues ranging
from the availability of corrugated cases to plastic clamshells
and flexible films remain another big problem.
" We have had more packaging challenges with quality
and service than I have seen in my career, " he said.
" Many of these packaging plants have so few employees
because of COVID, but we're also seeing the flu run
pretty rampant, and when you only have 30 people in
your corrugate plant and the flu takes out five of them,
that hurts. "
Stockpiling is good in theory but not always practical.
" Bakeries are small, capital is tight, interest rates are
high and getting higher, " Mr. Mullins explained. " We
can't carry a lot of packaging inventory. Bakeries just
don't have the warehouse space. "
Recently, he visited with a packaging supplier and
asked the manager if the plant was running at 100%
capacity.
" He looked around and said, 'I'm running to 100% labor
ability,' " Mr. Mullins recalled. " On first shift, they're
pushing 100% capacity. On second shift, they run two
lines and on third shift, they run one. They just can't find
the people to run full. "
The November Producer Price Index for food manufacturing
jumped 11.8% from a year ago. Year-over-year
egg prices spiked 244%, grains increased 19% and edible
oils rose 14%, while diesel fuel surged 60%, reported the
Consumer Brands Association.
In a December 2022, Consumer Brands-Ipsos poll,
49% of the respondents said they believed that solving
the problems causing supply chain pressures would
have a positive impact on inflation. Additionally, 71%
of those surveyed said they are very or moderately concerned
that labor shortages will disrupt the supply chain.
Bakeries relying on automation to reduce costs and
100 Baking & Snack February 2023 / www.bakingbusiness.com
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Baking & Snack - February 2023

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