Supply Chain Challenges Faced by the Dairy Industry

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Logistics management in the dairy industry is not a simple task by any means. Businesses in the dairy industry need to manage input from different sources and also the demands of various stakeholders. These stakeholders consist of farmers, haulers, and the people at the factories. Dairy businesses have to establish a balance in providing optimal solutions to these stakeholders in an environment that is ever-changing.

The dairy industry faces many supply chain challenges on a daily basis. This is because milk and its derivatives are perishables that have very little shelf life. Considering this fact, it is very important to maintain the temperature in the cold chain transportation. It is also important to ensure end-to-end visibility in the supply chain so that the problems and hurdles along the chain can be avoided. In this article, we will take a look at the major supply chain challenges faced by the dairy industry.

Supply Chain of Dairy Industry

 

1. Inputs are supplied for dairying, which consists of fodder, veterinary services for the animals and other important things.

2. The dairy farmer milks the mulching animals on a daily basis. These farmers can be operating on a small, medium or large scale.

3. The milk is then collected by the milk collection centers, which consist of milk cooperative societies.

4. After the milk has been collected, it is sent to the chilling centers at the dairy plants. The milk and milk products are then processed and packaged, after which they are sent for transportation.

5. The milk and other derivatives are transported from one place to another through insulated milk tankers or refrigerated vans.

6. In the final stage, the milk and other milk derivative products are transported to supermarkets, retail outlets and markets. After this, the processed milk finally reaches the consumers.

Challenges in Supply Chain of Dairy Industry

The unorganized dairy market in India involves the local milkman who sells milk directly to the consumers. The organized sector consists of dairy cooperatives, Govt. and private dairies that procure, process, and market milk and milk products. Inbound movement has multi pick-up and single delivery model from farmgate to plant, and in outbound - single pick-up multi delivery model from to hubs and booths or direct customers.

Route planning, delivery visibility, crates management, accuracy in deliveries are some of the very common challenges faced in the dairy industry. Milk is a perishable product, so quick delivery is required. Returns management, reconciliation, and whom to charge (either dairy if bad milk, or the transporter if delivery was not in time or the retailer/consumer due to bad handling of product) are some other common challenges in the Indian dairy industry.

At the stage of procurement, it can be difficult to meet the seasonal demand spikes. It is also difficult to measure the quality of milk procured at the source. If the milk goes bad at a later stage, it poses a problem of whom to charge. The difficulty in assessment of the milk quality at source can put the dairy, transporter, and also the retailer in a difficult position. Another issue faced by the dairy industry logistics is the lack of visibility into the shelf life or the raw material.

During the stage of transportation, it is important to know the exact location of the suppliers and the best way to reach them. There could be road limitations for the tankers in terms of height and weight. It is quite challenging to keep track of the tanker routes. This problem can be remedied with logistics planning software, catering to addressing both procurement and distribution challenges. It also helps in the optimization of the route. In the last stage, problems related to crate management and accuracy of deliveries can arise. Even though the challenges faced by the dairy industry are many, there are some innovative solutions that can help the businesses in these industries in overcoming these issues.

Innovative Solutions to Improve the Dairy Supply Chain

There are technological solutions that help in providing solutions to the aforementioned challenges. Tools like fleet management systems, routing apps and last mile delivery software can help in optimizing the dairy supply chain logistics. Following are some of the benefits provided by these tools –

1. Digitization of dairy scheduling by connecting dairy plants, dispatchers, transporters, and trading partners.

2. Business intelligence tools and statistical analysis help in optimizing the plant-to-plant haul cost.

3. Providing detailed modeling for route costs from the dairy farm to the plant.

4. Optimizing the intake process which minimizes the cost and time wasted in the dairy supply chain.

Conclusion

The dairy industry is faced with many challenges, however, there are innovative and advanced monitoring solutions that can help in overcoming some of the problems. With the right tools, you will be able to gain visibility into each stage of the supply chain. This would ultimately help in ensuring that the product that reaches the end consumer is fresh and safe. If you are looking for supply chain consulting, then Mojro is the place for you. We can help you in optimizing, automating and digitizing your logistics to improve the efficiency of your operations. To know more about the Mojro platform, visit our website today

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