COVID-19: Using Data to Address Fragility in Food Supply Chains
This post is written by Benjamin Wielgosz, Netherlands Business Intelligence Manager, SCOPEinsight.
The global COVID-19 pandemic has turned “supply-chain disruption” from obscure industry jargon into a regular discussion point in the media, often with a focus on the food and agricultural sectors. In the United States, $1.32bn worth of perishable food has gone to waste from March to May as producers have faced a massive surplus, limited storage, and marketing channels shut down due to COVID-19 lockdown. From Ghana to Uganda, agricultural producers in Africa are facing remarkably similar challenges brought on by the virus––leaving crops rotting in the fields or at the depots waiting for trucks that never arrive. The global crisis has highlighted fragility in food supply chains from the local labor and trucking bottlenecks to the dependency of globally sourced food on environmental, social, and political predictability.
The Predictable Return of the Unpredictable
While agriculture is generally viewed as a higher risk segment of the economy than others, every stakeholder in agricultural value chains now must navigate the additional risks introduced by the pandemic. Efficiencies that were at an advantage during a period of relatively stable growth and globalization are suddenly a liability when seasonal labor, just-in-time delivery to market, access to finance, and predictable consumer markets are suddenly in doubt everywhere. This means effective risk-management is now central to many organizations’ survival.
Many mature risk management approaches focus almost exclusively on direct, quantifiable risks to an organization such as interest rate changes. From our vantage point at the agri-SME and Producer Organization level of the value chain, we know that many risks to agri-SMEs ultimately affect their downstream business partners but are difficult for those partners to measure or manage. What if those indirect and unmeasured risks of suppliers were possible for processors, brands, and financiers to manage? If we could create more measure and management of the risk in the value chain, better business planning, lower cost financing, and more sustainable investments, we might be able to make the value chain more resilient to the type of shocks almost every organization on the globe now has to navigate.
Addressing fragility in food supply chains?
To meet this challenge, SCOPEinsight has brought forward research and development of our Agri-SME risk analytics by tapping into the expertise of our clients, partners, and investors.
Our unique database of professionalism and performance data on more than 3,500 agri-SMEs across 40 countries has the potential to improve the visibility and management of risks across numerous value chains. While most of the major enterprises supplying consumers have strong supply chain risk management, we know the challenge in obtaining and analyzing data on the agri-SME aggregators and suppliers operating in sub-national markets.
We are identifying opportunities to drive collaboration between processors, technical assistance providers, Agri-SMEs, and financiers who can link risk reduction to investments in professionalizing value chains. Through our business intelligence portal, our clients are able to access a range of risk insights on their previous and current value chain projects. By extending the current way stakeholders account for their direct and indirect supply chain risks and providing them visibility on their agri-SME suppliers, we hope that what has begun as a public health crisis will end with new ways for stakeholders in the food system to recognize how a risk to one enterprise rapidly becomes a risk to everyone.