Prevent Supply Chain Disruption Devastation

(Canva.com)

What do the blockage of the Suez Canal for several days and the run on feta cheese resulting from a recipe that went viral have in common? They both place unexpected stresses on supply chains and in the case of the Suez Canal, literally hundreds of supply chains. Although many associate the canal primarily with the movement of crude oil, in fact, a large number of products and commodities, worth up to $3 billion a day, pass through the canal. The halt due to the super-cargo ship that became grounded not only slowed deliveries, but the reroutings and other delays sent cargo logistics into a multiweek nightmare. 

The Automated Age
We live in a vastly different time, and I mean compared to only five or 10 years ago. Artificial intelligence has dramatically sped up the time needed to solve a large number of sticky problems, from cancer cures to logistics optimization to cost minimization, and it has created a potentially devastating set of land mines in supply chains and elsewhere. The checks and balances against dramatically overloading or paralyzing supply chains and automated infrastructure have not yet been adequately addressed.  

Remember when Walmart revolutionized the inventory handling cost by eliminating the holding of excess inventory to avoid stock outs? One of the latest high-tech strategies is to connect consumers directly to the supply chain via purchasing, automatic ordering and reordering and at the same time arrange delivery logistics often without a single person ever seeing the order. An analogy which has been with us for a while is algorithm-driven trading on the stock market. When you see one of the steep plunges in the market, odds are it was initiated by a machine, and when targets were blown by, other machines joined the trading chaos.  

The Power of People
The main difference we face is that the common person has a lot of access to these tools and the cultural mores against causing big problems for others are eroding. Have you been following the trading that took place around a particular gaming stock? A relatively small group of traders moved against the short positions of large-scale traders and forced a dramatic set of margin calls against the short positions which were highly leveraged. Do you think enough people following a recipe posted on the web could cause a feta cheese stock out for several days? It happened more than once, first in Finland in 2019, where the recipe was first posted and then recently here in the U.S. when it found its way onto a major social media platform.

The question arises as to how supply chains might be either harmlessly or deliberately sabotaged by groups of partisans, say animal rights or climate terrorists, who may cause temporary shortages in key inputs, or for instance loss of electric power (they have already tried this in the Pacific Northwest). Don’t forget hoarding toilet paper, paper towels, Clorox wipes, hand sanitizer, N95-masks and other PPE. These are all supply chain issues, and it is likely that bands of folks up to either no-good or just out to “see what happens” could strategically bring either production, slaughter or further processing to a halt by the carefully researched attack on an Achilles heel item or input required for operation.

It seems only reasonable to develop a supply chain plan that includes knowledge of key inputs critical to production and where you acquire them, supplier vulnerabilities, new proper inventory levels that reflect the current risks, and possible substitutes and how to acquire them quickly if needed. Supply chain disruption will loom larger and larger as a tactical weapon against perceived enemies by APP or computer-savvy groups. How will you fare against such a challenge?

More from Farm Journal's PORK:

2021 Red Meat Export Outlook Remains Strong Despite Drop in February

Think Twice: Fake Meat’s Threat to the U.S. Meat Industry

How Big of a Gap Did 2020 Create in the Pork Industry?

Pork Signals: 4 Indicators Profitability May Be Coming

 

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