Daily Archives: July 27, 2009

Can we Sustain the Global Food Supply Chain?

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The threat of contamination can be disastrous for both public health and businesses, thus prompting companies of all sizes to focus on sustainability initiatives designed to ensure the health of the entire food and beverage ecosystem.
    Aberdeen Group, Sustaining the Global Food Supply Chain, January 2009

In their research preview, which noted that global food production, processing, distribution, and retailing have never been under greater scrutiny by both regulators and consumers than they are today and that their upcoming study will explore pressure points, planned actions, and best practices in supply chain management, Aberdeen points out that thought leading food and beverage companies have taken on aggressive goals to ensure end-to-end visibility and quality, reduce negative impacts on the environment, and enhance positive change on society through frameworks of shared value.

But sustainability requires organizations to change and innovate in fundamental ways and represents, in and of itself, a sea change in the way society views the role of business and the centrality of business ethics. And in this economy, despite the need, not many companies are changing. This is a disturbing thought when you take into account that last year, global food reserves reached fifty, if not one hundred, year lows and that global shipping is currently responsible for 4.0% of all global climate change emissions due to an utter lack of regulatory requirements compared to the automative and trucking industries.

So can we sustain the global food supply chain?

Logistics Management’s Ten Steps to a Safer Supply Chain

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Today’s organizations must proactively enhance their supply chain resiliency against multiple threats, because if they don’t:

  • widespread disruption to customer deliveries can occur,
  • brand equity could be damaged,
  • loss of revenue could lead to investor discontent,
  • regulatory scrutiny could increase, and
  • significant legal liabilities can materialize.

That’s why I appreciated an article that Logistics Management ran last year that covered a framework for protecting your supply chain because, as the downturn hangs on, the risks of many types of threats increase.

The framework described in the article revolves around 10 security competencies that are required within and across each firm in the supply chain to keep it safe. Specifically, the following competencies are required:

  1. Process Strategy
    An effective security environment requires strong executive commitment and a culture that puts a premium on security.
  2. Process Management
    This requires in-depth understanding of firm and supply chain processes in order to identify vulnerabilities that may cause disruptions.
  3. Infrastructure Management
    This involves the most basic and common methods used to increase security as they serve to form a “perimeter” guarding against unauthorized entry.
  4. Communication Management
    This involves strategies to share potential threat and security information internally with employees and provide communication channels for employees to use when a potential threat exists or incident occurs.
  5. Management Technology
    Information systems provide a first-defense mechanism to understand trends in product contamination and missing shipments, as well as to identify the root causes of these occurrences.
  6. Process Technology
    This is used to track product movement and monitor processes internally and across the supply chain.
  7. Metrics
    Metrics should be developed and captured by the firm to assure adherence to security guidelines.
  8. Relationship Management
    Collaboration with external entities is necessary to ensure that security procedures are communicated and followed.
  9. Service Provider Collaboration Management
    A company cannot create a supply chain protection program alone.
  10. Public Interface Management
    Forging relationships with government agencies is a critical corporate capability to protect against many threats.