When it comes to managing critical supply chain issues, larger, multi-plant companies have more flexibility and can better forecast their production needs, which allows them to buy out further in the market.

However, smaller companies struggle with high prices because of their size or financial constraints.

“They have to count on the spot market and can’t find the ingredients they need, so they’re having to reformulate differently or see how they can barter to get what they need,” said Lee Sanders, senior vice president of government relations and public affairs, American Bakers Association.

To manage the supply chain more predictably, Crown Bakeries places greater emphasis on its sales and operations process so it can push a high-level forecast out to its suppliers.

Clay Mr. Mullins, vice president of supply chain and logistics, Crown Bakeries, said the Brentwood, Tenn,-based company implemented a basic enterprise resource planning system into its plants and is rolling out a manufacturing requirements planning system to provide better forecasts to suppliers.

“We are placing more accurate orders and tracking the orders, so we know if they are getting delayed,” he said.

If an ingredient isn’t delivered on time, Mr. Mullins noted, Crown Bakeries tries to pull an order forward or see if the ingredient is available at another facility. Seeking an alternate supplier is the second option followed by a schedule change in production, if absolutely necessary.

Sometimes it just takes a creative alternative. The company recently had a supplier with a key ingredient available in another warehouse location but couldn’t find a truck to deliver it.

“We got our own truck and got the ingredient on the second day,” Mr. Mullins said.

From a legislative perspective, Ms. Sanders said the 2023 Farm Bill contains numerous programs that could provide a long-term impact to the supply chain.

Among the litany of options is sugar reform and relaxing restrictions on imports, something the baking industry has been seeking for decades, and the Conservation Reserve Program (CRP) that can open potentially environmentally sensitive acreage for US wheat and other crops.

Ms. Sanders believes supply chain challenges aren’t going away any time soon, but she is hopeful for progress in 2023 and even more in 2024.

“We’re going to see a lot of what we saw in the past year,” she said. “As we move forward, there are going to be new issues that pop up.”

Meanwhile, Jim Warren, BEMA chairman and vice president, Exact Mixing, Reading Bakery Systems, is beginning to see some price softening of equipment components and ingredients.

A BEMA Intel survey of its members anticipates 2023 to be a lot like 2022 with conditions improving in 2024, barring any unforeseen global event.

“But even if prices decrease significantly, the reduced prices will still far exceed those of 18 to 24 months ago,” he explained. “Also, commodity cost reductions will be slow to reach the bottom line as both manufacturers of finished products and equipment have not passed all cost increases on to the end users.

This article is an excerpt from the February 2023 issue of Baking & Snack. To read the entire feature on Supply Chain, click here.