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A commentary on risk in today's supply chain.
29/07/21 |
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A remarkable combination of risk factors have come together that present a range of hazards for the global food industry. Many of these individual risk factors actually exacerbate each other, so it’s important to appreciate the overall context. This is written from the perspective of the UK, but with international relevance.
Operations/Logistics
Food Fraud
Quality Processes
All of this is by no means an exhaustive list! With so many risk factors emerging concurrently, it would be easy to lose sight of the compounding effect at play. It’s also important to keep in mind the time delay before goods produced move through the supply chain, especially where there’s further processing. Some materials take years to move from producer through manufacturers and to retailers – so when the risk factors are no-longer in play, the foods produced during the higher-risk periods may still be being processed.
Operations/Logistics
- A labour shortage across all business levels has come about due to Covid-19 (isolating/distancing) and Brexit (which resulted in the loss of many resident EU workers and has disrupted seasonal/casual labour from overseas).
- Border controls since leaving the EU have made it very challenging to move food products between the UK and EU, notably with the Northern Ireland border presenting disruption to trade.
- A shortage of certain raw materials has arisen as an outcome from supply chain disruptions that occurred at earlier stages of the pandemic – so raw material availability is a limiting factor for supply chain resilience.
- A shortage of HGV drivers (linked to the Brexit labour shortage) has impacted the logistical capability of the supply chain to transport foods from manufacturers to retailers. Increasing transportation costs are imposing further stresses on the supply chain.
- Consumer panic-buying has made it harder to forecast demand.
- Consolidation of the supply chain into relatively few processors has resulted in vulnerabilities – resulting in the culling of livestock and wastage and perishable foodstuffs.
Food Fraud
- Reduced surveillance testing from authorities has meant greater risk.
- The shortage of raw materials alluded to in Operations/Logistics has introduced an incentive to substitute ingredients with available analogues.
- The economic impact of the pandemic leads to greater financial incentive to commit fraud.
Quality Processes
- The factors that have resulted in a labour shortage across operations have also impacted quality capacity.
- Opinion is divided over whether remote working is equivalent to being on-site, raising questions about the effectiveness of quality oversight.
- Remote audits impede auditors’ ability to make observations or collect evidence.
- With many companies regarding Covid controls as falling in the quality remit, any resources dedicated to this may have detracted from other quality functions.
All of this is by no means an exhaustive list! With so many risk factors emerging concurrently, it would be easy to lose sight of the compounding effect at play. It’s also important to keep in mind the time delay before goods produced move through the supply chain, especially where there’s further processing. Some materials take years to move from producer through manufacturers and to retailers – so when the risk factors are no-longer in play, the foods produced during the higher-risk periods may still be being processed.
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Author: Duncan Lacey - Director of Innovation, Food Portal
Duncan Lacey | LinkedIn |
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