Many people have noticed an increase in food shortages. Even if they can get their favorite consumables, they typically cost much more than expected. These are some of the effects of extreme weather events. Manufacturers, supply chain professionals and others who have dealt with them or are under threat from such challenges must develop supply chain resilience strategies to mitigate the potential effects and improve overall preparedness.
Improve Supply Chains With Diversification
A pervasive belief has been that increasingly complex supply chains can create problems for those managing them. However, a 2023 Penn State study about urban networks suggested otherwise, showing they could protect cities from shortages.
When developing the theory that drove this research, the team took inspiration from nature, where more resilient ecosystems are often more diverse because they include a wide variety of species that can do many tasks. Additionally, the influence of multiple species usually means the same tasks get done differently. That redundancy can protect the ecosystem against nature’s shocks, such as wildfires or other effects of extreme weather.
The group’s work involved examining transportation data associated with 69 cities and 39 product categories, using it to develop a specialty algorithm. They focused on products’ source diversity and the volumes arriving at different locations. The team then identified several factors that helped them identify cities’ risk of shortages.
A broadly applicable finding was that those operating supply chains sourcing from various domestic and international parties enjoyed better protection against shocks and experienced less disruption during shortages. As leaders explore resilience strategies, they should study the diversification of their current networks and consider the potential issues if severe weather hits a particular part of the country or world.
More suppliers spread throughout a larger area should reduce potential impacts, some of which can be substantial. For example, Georgia’s governor said Hurricane Helene affected 107 poultry facilities and 15 dairy farms, destroying some of them. Hurricanes’ effects can be easier to plan for as leaders improve supply chain resilience because these storms happen during a particular period, and certain areas are more at risk than others.
Apply All-Encompassing Supply Chain Resilience Strategies
Supply chain managers and other affected parties must also realize many separate factors collectively contribute to shortages, higher prices and other adverse effects. Extreme weather events often exacerbate a current situation but are not the sole motivator.
The 2024 global orange juice shortage is a good example. Whereas citrus greening disease affected crops in Brazil, those in Florida also experienced that issue, along with the compounding effects of several hurricanes. Data about Brazil’s orange trees estimated harvest yields would be 24% less than in 2023. It was also the third consecutive year of production difficulties.
Regardless of the kinds of at-risk supplies and their sources, those overseeing worldwide distribution networks must take the time to explore the most likely reasons for struggles. Although severe storms could be components, it may also be true that raw material shortages, high labor force turnover rates and worldwide political tensions could cause issues.
Short-term actions for the orange juice shortage include adding other citrus fruits to the beverages or mixing the new crop with the liquid in a frozen form that lasts a couple of years. However, these possibilities bring additional considerations that may make them hard to implement quickly. The better alternative is for people to improve preparedness by understanding the multifaceted nature of their supply chains and how concurrent realities can cause supply chain conditions.
An example from outside the food industry occurred with lumber. When prices exceeded $1,500 per thousand board feet, demand diminished because many people decided paying those prices for home improvement projects was not worth it. However, analysts determined factors ranging from labor shortages to the rapid home-purchasing rate also caused the circumstances.
Get Advice From Trusted Peers
One potentially helpful aspect of preparing for natural disasters is those involved can take comfort in the fact that others in similar roles are doing the same. Leaders potentially affected by supply chain shocks affecting the food industry should strongly consider taking advantage of opportunities that allow them to share what has worked well for them so far, learn what others have tried and bounce ideas off of people who experience many of the same challenges.
In the United Kingdom, 25 hospitality industry executives attended a supply chain event at the Zero Carbon Forum. They came to learn and discuss how recent challenges had adversely affected their ability to serve the consumable products customers love.
Attendees also received new data that drove home how much severe weather events can cause spending decreases. For example, Storm Eunice caused a 25.7% dip in sales in 2022 compared to the same period in 2023. Additionally, unusually high temperatures the previous year made sales 8.2% less than the next.
Some of the supply chain resilience strategies discussed during the event included prioritizing supplier engagement, using regenerative agriculture methods and working with partners to reduce Scope 3 emissions. Hearing what others have to say about relevant topics is crucial for helping decision-makers determine the next appropriate moves.
Prepare Now for Extreme Weather Events
People cannot know with certainty how future storms will affect their food supply chains. However, past data and the tips mentioned above can help them get ready so the effects are less damaging.
