The topic of resilience in the AgriFood sector has become increasingly important in recent years as supply chains across the globe look to respond to the pressures of a rapidly growing population, increased climate variability and resource scarcity.

At the same time, digital and data disruption is creating new and diverse opportunities to transform operations throughout the supply chain.

Adding to these pressures, dietary habits are shifting, and consumers are wanting to know more about the origins and sustainability of their food, meaning that supply chains have to become more transparent and accountable.

The agrifood industry has been in low gear when it comes to digital transformation. Now is the time to accelerate.

Mike Briers, CEO Food Agility

Not only do we need to produce more food to feed the world’s population, but need to do so in a context of constant disruption and volatility. Modern supply chains have become leaner and more efficient, designed to be as competitive as possible. Without robust mitigation strategies in place, supply chains and entire markets can be severely impacted in the event of a shock.

In the past 12 months alone, Australia has endured a number of shocks in the form of destructive bushfires, drought, floods and is now navigating its way through the global COVID-19 pandemic. The compounding effect of these events mean supply chains of all forms are experiencing heightened volatility and vulnerability as they adapt to a new way of operating.

Operating in this new environment requires investment in resilience across our AgriFood supply chains, with an understanding that supply chains are only as strong as their weakest link. Organisations need to constantly re-assess resilience within their own operations and assets in a way that considers the broader context of their end-to-end value chain.

As a collective AgriFood industry, now is the time to invest in the required research and infrastructure to support digital and data adoption, ensuring stable production and consistent flow of food supply in future shock scenarios. More resilient AgriFood supply chains will underpin our GDP growth ambitions and drive more sustainable industries for the long-term.

Until now, the agrifood sector’s mindset has been reactive rather than proactive, with resilience mechanisms built in after each bushfire, flood or drought. This makes it more vulnerable to shocks such as COVID-19. We need to invest in strategies that enhance the sector’s underlying resilience.

Ben van Delden, Partner, Head of AgriFood Tech at KPMG

Purpose of this report

This report, jointly developed by KPMG Australia and Food Agility CRC, seeks to identify and assess the underlying stresses within six significant Australian AgriFood supply chains (grains, horticulture, dairy, red meat, seafood and wine) and the amplified impact that these stresses have on supply chain resilience when shocks occur.

By understanding when, where and how stresses occur, mitigation strategies for industry investment can be identified with the goal of reducing the risks and vulnerabilities which arise in shock scenarios.

This report represents the launch of Food Agility’s Mission Food for Life, a $10 million initiative bringing together a consortia to create new data-driven solutions that help the AgriFood industry to rebound quickly, reinvent business models and build resilience.

How can we build future resilience?

Future resilience will be underpinned by the adoption of digital and data-driven technologies including the likes of artificial intelligence and machine learning, Internet of Things (IoT) and blockchain technologies. These technologies have the capacity to better manage and mitigate the impacts of production and demand volatility, increased climate variability, rising costs of inputs and market access compliance.

Technology can provide organisations with the insights they need (real time, predictive and over time, cognitive) to enable greater oversight of supply chains so that when shocks occur, proactive and informed decision making can be made. Resilient supply chains of tomorrow will use these tools to become dynamic and tightly integrated ecosystems where data sharing is encouraged and incentivised.

Connecting the physical, biological and digital worlds together will enable the AgriFood supply chain to make better, faster decisions, automate processes, reduce cost and enable the prediction of future events. Insights from trusted real-time data will help the sector to more nimbly respond to what the market wants, be more efficient in production, reduce wastage, increase yield and show our customers how safe and sustainable our food is.

Piers Hogarth-Scott, Partner, KPMG Digital Delta

12 key themes for enhancing supply chain resilience

The future mitigation strategies outlined across the six sectors in this report have surfaced 12 key themes for enhancing supply chain resilience:

12 themes of agrifood for supply chain resilience

Key takeaways

A key focus area for collaboration is the collection, analysis and use of data to inform real-time and predictive decision making across supply chains. Whether in business planning, supply chain forecasting or sustainability, the ability to adopt new systems and platforms to capture and use data effectively will be critical in the future resilience of supply chains. Moving to paperless systems, particularly in transport and distribution, will be essential in driving efficiencies and preparing supply chains for future shock events where access to physical assets is constrained.

The establishment of data standards and governance frameworks in addition to supporting awareness building will help improve trust and promote a culture of collaboration where data sharing is encouraged and incentivised. Moving away from siloed technology implementations towards interoperable platforms will be critical in achieving objectives relating to traceability and sustainability in the sector.

Digital and data adoption will itself give rise to new cyber and privacy challenges, creating new vulnerabilities in supply chains. The industry would be prudent to work together and invest in measures to mitigate these risks and review these measures on an ongoing basis as the technology landscape evolves.

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