Building resilience and flexibility into food supply chains

The concept of food security in the Western world has only come into greater focus in recent years. For many developed countries, both the availability and variety of food – and the publics’ ability to access it – has been regarded as commonplace.

The last few years have seen all that change. Due to a number of contributing factors, from the climate crisis to the pandemic to Brexit, issues encountered throughout the food supply chain have led to increasing shortages and uncertainties. It’s an overdue wake-up call – one that highlights just how vulnerable our system really is to unpredictable shocks and changing circumstances.

Food is one of the United Kingdom’s 13 Critical National Infrastructure (CNI) sectors. CNI sectors are “those facilities, systems, sites, information, people, networks and processes necessary for a country to function and upon which daily life depends.” From 2020 onwards, we’ve all read increasing reports – and felt the first-hand impacts to our daily lives, such as rising food prices – of systemic supply issues. What exactly are the issues with the UK food supply system? What can be done to ensure it’s sufficiently resilient and adaptable to change?

What is the food supply chain?

Food supply chains, also known as food systems, refer to any activities and stages involved from the initial sourcing of food to it ending up on our plates.

Food supply chains can be incredibly complex and interconnected. The phrase ‘farm to fork’ is common shorthand for the transformation and food processing that products go through before they’re ready for consumption – from initial raw materials to consumer-ready food products. Chains encompass a wide variety of businesses and processes:

• Primary producers such as agricultural production, aquaculture and fisheries.
• Food manufacturers such as processing plants, mills, factories and refineries.
• Logistics such as transportation services, food distribution centres and storage facilities.
• Wholesale and retail such as supermarkets, local businesses and wholesalers.
• Food services such as catering companies, restaurants and other food outlets.

It’s a huge industry. As well as initial sourcing, processing, handling, distribution, sale, consumption and disposal, the food system also encompasses any management and documentation of these individual activities. Due to its interconnected, ‘domino-like’ nature – in which food products move through the supply chain step by step – an issue in any single aspect of the chain has the potential to affect the whole system and can often cause devastating consequences for both business and livelihoods.

How did the pandemic affect the food supply chain?

Last year, Reuters reported that Britain’s food supply chains were “just on the edge of failing.” Absence and closures related to the Covid-19 pandemic – including job vacancies, successive lockdowns, illness, and the requirement for hundreds of thousands of people to self-isolate – resulted in a critical labour and skill shortages across the chain. As a result, the domino-effect meant demand far-outstripped supply, with supermarket shelves across the UK left empty and retailers under heavy pressure to maintain both opening hours and stock levels.

While the size and diversity of UK chains can adapt to agri-food business failures, the scale of the pandemic placed significant strain on all areas. Wholesale was particularly affected, linked to closures across the hospitality sector. In the public sphere, fears of food insecurity during lockdowns and enforced isolation periods led to temporary supply shortages, as ‘panic buying’ and stockpiling saw shelves stripped further. Between the weeks 8 September 2021 and 8 November 2021, 42.5% of shoppers could not find everything they needed – from essential food items to fuel and medicine.

Is the food supply chain at risk?

The last few years have highlighted just how vulnerable the global food supply chain is in the face of adversity and unpredictable events, including the coronavirus pandemic, climate change, Brexit, and other political upheavals.

The UK government’s Food Security Report 2021 examines a number of critical, infrastructure-dependent food supply chain risks, including:

• Energy and critical resource inputs. Fluctuations in the energy market – which powers almost all stages of the food industry and its various chains – can greatly impact prices of commodities, inputs, and the economic viability of food businesses. Presently, the sector remains reliant on electricity, imported natural gas and petroleum products, all of which can present issues of both volatility and sustainability.
• Transport and logistics. Road, rail and sea transport routes are vital to the nation’s import and export business. Perishable items with a short shelf-life – such as fruits, vegetables and fresh meat – rely on reliable, efficient and predictable transportation links to ensure that they reach their destinations as fresh as possible, reducing both food safety and waste issues. Diversity among international suppliers and transport access points helps to build more robust logistic networks.
• Labour and skills dependency. Human capital ensures the whole food chain remains operable. The UK government estimates that agri-food employs approximately 4.1 million people, representing 13% of Great Britain’s employment. Without sufficient expertise and skilled labour across the whole food sector, food continuity and supply cannot be guaranteed. There exist both short-term and longer-term challenges to sustaining a viable workforce: the continued ramifications of the pandemic; and a dependency on seasonal, agriculture-sector workers from the European Union.
• Food retail and wholesale. Diversity of food items, food manufacturing and food services is crucial to minimising food insecurity – across agri-food, food retailers, wholesalers, and many other areas of the chain. Unpredictable events – such as pandemics, economic failures and power outages – have the potential to greatly impact access to foodstuffs if there is only a single major supply chain or over-reliance on one company. Stimulating growth, diversification and multiple chains helps to safeguard against such events.
• Consumer behaviour. Operating just-in-time supply models – where raw materials begin ‘moving’ just before they are required – means carefully balancing supply with demand at any given time. Consumer behaviour is not a fixed entity; a rapid surge in demand can impact the efficacy of chains, resulting in supply shortages, stockpiling and price increases.
• Cyber threats. Cyber-attacks are on the rise – and the risk they pose to businesses of all types is significant. By nature, cyber threats are incredibly varied and possess the ability to constantly adapt in relation to both approach and target. Cyber disruptions have already caused considerable issues for food systems in other countries; Brazil-based JBS, the world’s biggest meatpacker, suffered a ransomware attack in 2021, causing it to close several plants and temporarily – but majorly – disrupt meat markets. The interconnectedness of chains makes them especially vulnerable to these types of attacks.

Despite already being heavily embedded, technology, optimisation and other value chain initiatives must play further roles in providing solutions and building extra resilience into existing chain systems.

Transform supply chain operations in your industry with a master’s-level qualification

Want to gain the skills and expertise to build robust supply chains of all types? The University of Lincoln’s online MSc Management with Supply Chain programme offers a flexible way to develop skills suited to careers across operations, supply chain management and leadership.

Combining practical skills and tools with business theory and acumen, you’ll have the opportunity to become adept at handling the macro issues and challenges surrounding global, strategic supply chain management. From operations strategy and logistics to procurement, this degree could enable you to be well-placed to take the next step towards a fulfilling career in a wide range of sectors. In addition to supply-specific learning, your studies will also address finance, people management, marketing, risk and responsibility, and more.