When the supply chain is at risk

Phil Showering, COO at Mohebi Logistics, retraces the advice he gave at the World Food Security Summit in Dubai in February at Gulfood 2014. Phil says that with good planning, food will always be available in times of emergency.

[5 Mar 2014] A natural disaster strikes. There’s a run on food. In no time, the supermarket shelves are emptied. Now the situation’s got several times worse. How can a supply chain prepare itself for a scenario like this and mitigate its greater effects? In effect, the concept shifts from ‘Just-in-Time’ to ‘Just-in-Case’.

The problem with ‘Just-in-Time’

In retail circles everywhere there’s a strong trend towards providing sufficient food stocks for immediate needs (‘Just-in-Time’) but not taking a longer-term view.

The assumption is that the supply chain will always provide – and at short notice too. However in certain parts of the world this has to be balanced against the likelihood of natural disasters.

The power of anticipation

Learning from emergency events has guided the food industry to develop best practices in logistics for providing ‘Just-in-Case’ food supply. This sets up the lowest reasonable inventory cover so that deliveries can be made immediately during demand peaks. The stocks come from manufacturers’ distribution centres or from 3PL providers who co-manage the inventory. Mohebi Logistics has been involved with co-management practices for many years.

Taking responsibility

Holding emergency food stocks is essentially the decision of a government or NGO. Forward-looking leaders in the food industry can explain to these bodies that reserving food stocks for emergency use is not a complex process. In places of risk, the subject should at least be placed on the agenda. Stock rotation ensures that no resources get wasted.

Assume that the manufacturer’s code life for food is 2 years. The government can specify that the code life of reserved stock is 18 months. After that it can be released for general use and consumed in the market.

Rings of protection

When a community can build several rings of protection, it can keep its food supply flowing even when disaster hits. For the GCC this is especially important because imports here account for over 80% of food consumption and little food is grown locally.

The UAE government realizes this and is already actively pursuing the principles of ‘Just-in-Case’ preparation. Should that time come, residents will be in safe hands.

Phil Showering

Gulfood is the world’s largest annual food and hospitality show and takes place at Dubai World Trade Centre in the UAE. The World Food Security Summit brought together leading thought leaders and industry visionaries to address the importance of securing a stable, cost-effective and safe supply of food for the world’s growing population.