Just-In-Time Logistic Systems Source Of Food Supply Vulnerability

[hatrack]

06/03/2007 - Being lean and mean in the food and drink manufacturing sector might pay off in terms of profits, but the practice has left the supply chain vulnerable to a crisis, according to a UK government report. The government-commissioned report concludes that the drive for efficiency and the just-in-time philosophy used by the industry has progressively reduced stock levels throughout the supply chain -- with the resulting damage to its resilience when an emergency occurs.

The study highlights the need for processors to have business continuity mangement (BCM) plans in place to deal with emergencies such as livestock diseases, bird flu, or fuel shortages, as well as site-specific events such as natural disasters, product contamination or terrorist attacks. The independent study was done by Cranfield University for the Department for Environment, Food and Rural Affairs (Defra).

EDIT

UK manufacturers tend to rely on their ability to 'flex' production between sites as their main form of contingency, she found. However, most conceded that the redundant capacity that provides the basis of this strategy is being steadily eroded by the pressure to reduce costs and optimise asset utilisation, she said. "Sites are being closed, consolidated and moved offshore, at which point the risk profiles for their UK operations change," Peck wrote. "The principal dependencies switch from manufacturing sites to transport, communications and the supporting infrastructure."

One of her main conclusions is businesses are doing BCM out of enlightened commercial self-interest. Best practice BCM encourages them to take action to maintain the Mission Critical Activities and Assets of their organisations, under an expectation of otherwise normal external circumstances. "They see the purpose of BCM being to protect the well-being of customers, employees and shareholders," she concludes. "It is not being undertaken for the 'public good' or to maintain operations in times of national emergency."

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http://www.foodanddrinkeurope.com/news/ng.asp?n=74729-contingency-emergency-crisis

[Mojorabbit]

1. Here is a report from the american trucking association

http://www.truckline.com/NR/rdonlyres/5E2BCA15-7C12-43CA-9F82-154A5A7A2F3C/0/WhenTrucksStopAmericaStops.pdf
It is a sdhort nine page pdf file but vewry eye opening

[Solo_in_MD]

2. They should look at it here in the US

where it is 4 days long on average, 2 in the large cities. Cost reduction has lead to little or no reserve capacity in case of emergency. A m ajor disruption ala Katrina and people will be starving if there no way to get in and out of the area. How many DU'er have several days of food. water, essential supplies on hand? We keep a week por more at the house, and here in MD even I have close to that.

[MountainLaurel]

3. A few years ago

I attended a meeting on homeland security issues (related to my job), and someone raised the fact that New York City only had three or four days' worth of food on stock at any one time.

[Solo_in_MD]

4. Most major transportation hubs like NYC and LA are more like two days

I had family living SF. After the quake, their local small stores were empty for several days. Some of their neighbors were starting to have problems. They were about to dip into the MREs I had given them the year before.

Those who have always lived in urban areas and are into the city scene may have little to no sustantive food in their residences. I've seen a fair amout of that here in DC. Given the fragility and vunerability of the system, that seems foolish.

[MountainLaurel]

5. Foolish but somewhat unavoidable

Most people in the city are apartment dwellers who don't have the room to store substantive food and water supplies. Heaven knows we didn't when we were in DC: two adults, two dogs, and a cat in a 1BR condo.

[phantom power]

6. With further progress, no doubt we can reduce that to 24 hours!

:evilgrin:

[Solo_in_MD]

7. It makes a certain kind of sense...lower cost, and fresher food

The margins in the grocery store business are razor thin. The stores have minimal storage as well. However, it there is a break in the chain, it will empty out in a hurry.

Interestingly enough, WalMart has done the same thing to retailing. If they don't get their one-two trucks a day, there wont be any offshore non-union merchandise to buy.