EY’s Rob Dongoski: How We Are Helping To Create A Resilient Food Supply Chain

The cascading logistical problems caused by the pandemic and the war in Eastern Europe have made securing a reliable supply chain a national imperative. What must agriculture companies and policymakers do to ensure secure and resilient food supply chains? In this interview series, we are talking to business leaders who can share insights from their experiences about how we can address these challenges. As a part of this series, I had the pleasure of interviewing Rob Dongoski.

As a Partner at EY, Rob has over 20 years of experience serving clients in the food and agribusiness sectors. He works with a number of Fortune 500, Global 1000 and private companies in advisory and transaction capacities. He has helped clients develop growth strategies, complete buy-side, and sell-side transactions, designed digital strategies, and lead significant enterprise transformations. His experience provides clients and colleagues with a unique perspective on their business, innovation, and growth issues.

As the founder of the EY Global Agribusiness Center, Rob leads EY professionals in all regions of the world to serve agribusiness clients. Rob holds an MS in Agricultural Economics from Purdue University, MBA from Indiana University, and a BS in Accounting from Millikin University.

Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you. Can you tell us a bit about how you grew up?

I grew up in Central Illinois in the heart of corn and soybean country. At one time, my grandfather was a farmer, sold seed and put up grain silos. However, while I grew up near lots of farmers, I worked in our family business in carpentry and cabinet making. My free time was consumed with sports, and I played a little baseball and football through college. When not playing sports, we were typically in the woods or on the lake either hunting or fishing. I would consider this a fairly typical Midwest upbringing. I ended up going to college in my hometown, moved around with EY from St Louis to Boston to Chicago and now Nashville, and have been focused on the food and agri space for quite a while at this point.

Can you share the most interesting story that happened to you since you began your career?

This is a tough question as I have been blessed with so many interesting experiences. One of the greatest experiences was working with two young staff folks at the start of their career (literally from Day 1) and watching them grow both professionally and personally. Tough projects, lots of work, iconic transactions in the market and a true sense of teamwork made this so special. The pinnacle of this experience was when they both were promoted to Partner in the same year, so we were able to bring all our families together to celebrate.

You are a successful leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

I actually get this question a lot from new EY joiners. For me, it all starts with humility and a willingness to grow your mind and experiences. There is no one you cannot learn from and there is no one who knows it all. I subscribe to the growth mindset and focus on continuously learning and improving myself. Second, teamwork is key. I have always played team sports, and this teaches so many lessons — trust; when to lead, when to follow; do your job; read the field, etc. There are few situations that I don’t seek to team whether at work or at home. Lastly, I think you always need to know your audience. Whether you are presenting to a large group, selling a product or service, or mentoring someone, it all starts with empathy and recognizing the situation at hand. To do this effectively, questions come first before advice.

Are you working on any exciting new projects now? How do you think that will help people?

We feel so fortunate to work with the leading brands and players across the food system. This is an incredibly exciting time as consumers are clearly articulating what they want. There is a sincere focus on improving planet health and the system is reconfiguring — direct-to-consumer, shorter supply chains, fresh and local. At the heart of this shift is change — whether through innovation, transactions, or transformations — and we are in the middle of all of these right now. We have some very interesting work underway to serve consumers differently through product and process innovation including robotics; we are working with companies that serve farmers to create new commercial models and financing structures; and we continue to work with our clients on their strategic direction in a food system that is facing transformation on so many levels.

Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. To ensure that we are all on the same page let’s begin with some simple definitions. What does the term “supply chain” encompass?

The term supply chain refers to a network of various players (organizations and individuals), resources, and processes leading to the creation and sale of a product. This includes everything from the production of source materials to the moment it reaches the end user. When it comes to food, the supply chain refers to the entire process of bringing food to the table — from producers (farmers/ranchers) all the way to consumers. I would contend that we have been operating “farm-to-fork” for quite a while.

Can you help articulate the weaknesses in our current food supply chain systems?

It really centers on how we move food from farms to consumers and challenge the “in-between” actors. In developed economies, it is becoming more about how the consumer wants to be served versus the largely impersonal, industrialized approach that we have become accustomed. Contrasting with emerging economies, the focus is on creating profitable producers and feeding consumers to overcome food poverty issues. At the core of these challenges is how to create a more direct connection between producers and consumers. In the old days, this was proximity-based but going forward it will be more about data and transparency.

Transparency issues threatening the food value chain reside largely in a physical-digital disconnect associated with its products and services, restricting insights as goods are exchanged across stakeholders. Much of the disconnect is a result of the food system’s inherent production success within the physical domain and the lack of data mobility.

In addition, the food system has been slow to transform digitally, and tends to add headcount rather than digitize. As a result, much of the industry still functions on internal spreadsheets scattered across hundreds of employees. Digital transformation efforts with enterprise resource planning (ERP), supply chain management (SCM) and other applications occurred in isolated pockets, resulting in a disparity of systems and master data both within and across business units.

Digital hindrances across the supply chain may not only result in costly inefficiencies but can also contribute to friction between the food industry and evolving societal standards. Overcoming these challenges may require a new business model that will create the needed visibility and verification across an ecosystem of disparate systems, business units and supply chain partnerships.

Can you help define what a nationally secure and resilient food supply chain would look like?

When I envision a resilient food supply chain, I picture a supply chain that’s ready for disruption and limits waste. Resiliency in the food supply chain means the ability to respond on time, effectively, based on timely information, and having the agility to respond and change course. A resilient supply chain harnesses the power of technology to prepare for future crises through tools like scenario modeling, digital twins, the cloud, AI, and digital tracking. These capabilities will provide food when and where needed while optimizing supply-demand matching to minimize waste.

Resilient food supply chains also have transparent relationships, where cross-tier supplier collaboration is the end-goal for all parties. In an ideal scenario, suppliers are members of an organization’s ecosystem — leveling the playing field through mutual benefit and trust.

Can you share with our readers a few of the things that your organization is doing to help create a more secure food supply chain?

At EY, we help clients in the food and agribusiness sectors to adapt to the changing business environment by developing growth strategies, designing digital strategies, and leading enterprise transformation. We look beyond vertical silos to understand the forces that are reshaping the food industry — from ingredients and data, to processing and products, to behaviors and brands — to deliver innovative approaches that help food companies thrive today and create long-term value in a reimagined food system. Adapting to the new environment means smart, strategic planning grounded in an objective view of the current state, data-driven analysis of market opportunities and expert insight into future scenarios. Navigating the current environment and preparing for a transforming food system is challenging. Factors like geopolitics, macroeconomics, consumer preferences, pace of technology, innovative production practices, labor shortages are stirring the waters to know where to play and how to win.

What are a few threats over the horizon that might disrupt our food supply chain that we should take action now to correct? Can you please explain?

Geopolitics and trade routes could redirect the flow of core food supplies in the future. Depending on the potential scenarios, we could see minimal disruption to full-scale revamping of most trade agreements in place today. Some companies are in the business of moving food from places of excess to places of shortage but mostly in the context of a global trade environment. Significant disruption could impact major growing regions and the producers that are operate there today.

Workforce shortages are also bound to create disruption in the food supply chain. Amid labor shortages brought on by the pandemic, the food and agriculture sector must begin, or ramp up, the implementation of automation to alleviate workload on employees and fill gaps as needed. Food workers have historically experienced burnout at high rates given working conditions. With fewer workers than needed, automation will be key to reducing burnout.

Ok, thank you. Here is the main question of our interview. What are the “5 Things We Must Do to Create Nationally Secure and Resilient Food Supply Chains” and why?

1 . Eliminate the physical-digital disconnect in the food value chain. As mentioned, transparency issues in the food value chain largely reside in the physical-digital disconnect as a result of the food system’s inherent production success within the physical domain. After the first two industrial revolutions, the global food supply chain grew proficient in sourcing, processing, and delivering affordable products at scale. However, as the food industry continued to invest in large production systems, it was typically more cost-effective to add internal labor than to digitize. In order to bridge the physical-digital divide, the industry will need to adopt a different amalgamation of technologies across stakeholders spanning ERPs, SCMs, IoT, blockchain, logistics, RFID, barcodes and more.

2 . Increase visibility across the supply chain. Apart from complications with internal systems, external sourcing issues present problematic transparency challenges within the food supply chain. Depending on the ingredient, product or by-product, the procurement network for major brands may range from thousands to hundreds of thousands of independent producers spanning the globe. To achieve transparency, food value chain stakeholders need to cohesively confront obstacles to create practical solutions for unprecedented industry expectations. As consumers continue to want simpler ingredient stacks, this could create a tailwind to reduce some complexity in certain supply chains.

3 . Support digital transformation journeys. As the next wave of Digital Transformation (DT 2.0) continues to build momentum, food companies will transition to the new S-curve, where digital efforts will be collaborative and multi-party. This trend continues to emerge, many areas of value capture are being identified with risk reduction and revenue generation to validate the business model. As the value networks model matures to its crest and Digital Transformation 3.0 arises, the competitive structures of today’s food system may have morphed into something quite different.

For example, several emerging AgTech companies, along with leading ag equipment manufacturers, continue to develop farm management systems that allow for full integration of the farm onto one platform — from linking tractors and precision sprayers to crop yields and wearable devices for animal health. Beyond the capabilities already in the market, the future farm shows potential for the implementation of digital twins that allow producers to manipulate real-time inputs to model future scenarios.

4 . Strive for a connected food supply chain. Every node of the supply chain plays a role in addressing consumer behaviors and preferences. In times of crisis or disruption, this connectivity also creates resilience helping companies to react more quickly. The food system must look beyond vertical silos and become transparency-focused by digitizing across stakeholders and removing analog gaps. Look at every player in the supply chain as a partner. There is enormous value created by each stakeholder. Since 55% of our communication is now digital, the world is a bit different, making communication amongst supply chain players easier.

5 . Create value networks. Reducing complexity caused by a lack of transparency involves the establishment of value networks. A value network is a collaborative relationship across multiple participants that embraces digital conduits to capture specific value-based incentives. Value networks consist of the three primary components: stakeholder involvement, ecosystem governance and augmented intelligence. As the food industry progresses through various forms of digital transformation, the ecosystem-based business model derived from value networks can be advanced as a new strategy driver.

Are there other ideas or considerations that should encourage us to reimagine our food supply chain?

In thinking about the current food supply chain, consider how the entire food ecosystem has changed since the pandemic. Consumers are more conscious about what they’re eating and where it comes from, with an increased focus on health. Shifting consumer trends are driving fundamental change across the entire food and agriculture industry, putting the power in the hands of the consumer. The traditional farm-to-fork model has evolved to fork-from-farm and today is better described as a connected ecosystem. This raises questions about the role that companies across the value chain — processors, manufacturers, distributors, and retailers — will play as this new, more connected ecosystem emerges.

Looking at the impact of these shifting consumer preferences, it becomes clear that as goes the consumer, so goes the rest of the value chain. Individual consumer preferences drive change throughout the entire food and ag sector, which means that keeping a pulse on shifting consumers needs is important for an agile, resilient supply chain.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I think we really need to sort through the various messaging around our food system, and sort myth from reality. There are too many stories that don’t truly represent the efforts of our farmers, what consumers are willing to pay for or the real risk of certain ingredients in our food system. If the real issues are clearer, then we can drive to the solutions that make a difference, attract the best talent, reduce waste to enable those in food poverty and create innovative jobs. We are talking about “solving world hunger” and it starts with clarity of purpose, problem and people.

How can our readers further follow your work online?

You can check out my latest thinking on EY.com here and learn more about the food system reimagined here.

This was very inspiring and informative. Thank you so much for the time you spent with this interview!