The US Meat Supply Chain is Broken: Here’s Why

May 21, 2020

churn analysis

The fragile nature of the US meat supply chain has been exposed by the outbreak of Coronavirus. Quite notably, the pandemic has created havoc across industries, especially in the meat processing sector, where businesses are facing challenges in ensuring an adequate supply of meat to cater to its huge customer base. In addition to the pandemic induced disruptions, the temporary closure of meat processing plants has further disrupted the meat supply chain causing severe shortages of red meat and poultry across the United States.

The meat processing plants in the US were already facing tremendous pressures due to the complex production environments and changing consumer demands. Undeniably the recent outbreak of Coronavirus has put more pressure on this industry to thrive. To stay ahead of competitors, the meat processing firms must focus on developing strategies for smart planning and ensuring customer loyalty. However, one cannot ignore the fact that several other factors are keeping them away from efficient planning.

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Key Challenges Facing the US Meat Supply Chain in 2020

  • Rise in SKUs – Meat producers around the US mostly don’t own their brands or labels but supply products to retail brands that market the product with their brand name. All these retail brands require their personalized packaging and choices of meat. The variety of products always ends up increasing the SKU count for meat retailers across the US.
  • Perfect Product Mix – Retailers always tend to avoid revenue declines which occur due to gaps in inventory. Thus, retail businesses usually consider order fulfillment rates to be a key factor in gauging the quality of the bond and relationship that they share with the meat producer. This means that retailers never hesitate to change their meat supplier if the previous one fails to supply the desired quality of the product.
  • Uncertain Shelf Life – Meat products come with an uncertain shelf life. For example, a fresh piece of meat will expire in two days but the shelf life of the same can be increased by pre-processing. Many meat producers thus take this opportunity to enhance the flavor of meat through smoking or salting which also extends the shelf life of the product.
  • Animal Welfare – Many of the consumers are now becoming aware of where the meat is coming from and try to extract the maximum information before putting it on their table. The concern is not just about how the animal before slaughtering has been treated but also what the animal was fed on before slaughtering. As such, this is now a major area of concern for meat producers and retailers.
  • Lack of Meat Supply Chain Visibility – Lack of cross-functional visibility into supply chain processes often results in unfulfilled orders and scarcity of raw materials. Most of the meat producers depend on spreadsheets that do not offer real-time insights for improvising for planning and manufacturing processes. Different spreadsheets for different activities makes it impossible for the meat supply chain managers to have a single source of data. Since the meat products are highly perishable, meat supply chain managers need quick access to information with complete visibility to make the right decision at the right time.
US meat supply chain

The US Meat Supply Chain is Disrupted: We Bring to You Few Crucial Points You Can’t Afford to Miss

  • Worker illness at meat processing plants: So far we’ve witnessed more than five thousand confirmed cases of Coronavirus reported across the poultry processing plants in the United States. The majority of the plants have been shut down and the rest have scaled-down production in accordance with the workforce capacity.
  • Food safety:  Although there have been no traces found of this deadly virus among cows and poultry animals, the fact that the virus can survive on cardboard and plastic surfaces for a long time has raised concerns around food safety and hygiene.
  • The other meat supply chain– Apart from the poultry meat supply chain there are several other supply networks solely dedicated to restaurants and frozen foods. The frozen meat cold storage segment is currently witnessing several losses due to out of stock scenarios and the ongoing supply chain disruptions.

When a supply chain works without any disruptions, it is much easier to take control of it. However, in a crisis period having a long-term action plan to save the supply chain from disruption is essential.

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