Mitigating Supply Chain Risk Management in the Wake of the Global Food Crisis

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During May, India announced its wheat export ban after a season of exceptional hot weather affected their crop sending domestic prices soaring.  The India Commerce Minister, Piyush Goyal defended the ban by insisting that India wasn’t a major wheat exporter and therefore global markets shouldn’t be affected.  On the other hand, this export ban increased the benchmark wheat index as much as 5.9%, the highest it had been in several months.

Agriculture ministers from the G7 have criticised the decision stating “If everyone starts to impose export restrictions or to close markets, that would worsen the crisis”

More countries are banning exports of essential ingredients and supply chain risk management and food safety is a critical and growing concern in today’s environment.

Private and public sector organisations need to understand the challenges they’re actively facing and the potential solutions available to them in the wake of global food shortages.

Looking at your suppliers and analysing them from a different perspective will mitigate those risks a good starting point is to profile your current suppliers.

Reputation of your suppliers

  1. What do you know about your suppliers?
  2. Longevity of your suppliers?
  3. Are they recommended by others?
  4. Have your interactions with your suppliers been positive?
  5. Are you tracking relevant news sources in real time?

Location of your Suppliers & their Supply Chain

  1. Where are your suppliers located?
  2. Do you know the critical manufacturing or service sites?
  3. Do you know the critical locations and associated risk of your supply chain??

Criticality of your Suppliers

  1. How important are your suppliers to your business?
  2. Have you ranked your suppliers and do you relevant strategies depending upon their risk and importance?
  3. For your Tier 1 and 2 suppliers do you have alternative supply arrangements in place??
  4. In the event of a major disruption have you mapped out the implications and timescales to commission alternative supply arrangements?

What are the risks involved in your Supply Chain?

The depth and breadth of risk management will be very different depending upon your circumstances, but some areas to consider include:

Identifying your supply chain risks and understanding how to mitigate them, working with trusted suppliers and having plans in place for when your supply chain fails are fundamental requirements for all organisations.  It requires a clear understanding of your supply chain, real time data, transparency of performance and potential risks, excellent communication and most of all an environment of trust and collaboration.

Those organisations with constructive and collaborative supplier relationships will be able to manage and respond to risks faster and more effectively than those that have not invested in understanding their supply chain and built positive relationships.