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Supply Chain: Responding to the next disruption

The rapid cascade of challenges at the outset of the pandemic last year decimated the supply chain capabilities of organizations across the fresh produce supply chain.

In contrast, well-prepared companies, like those interviewed for this article, quickly regained their footing to minimize the negative supply chain impacts—avoiding lengthy disruptions of inbound and outbound flows thanks to four strategies.

A strong technology backbone is an important and well-documented supply chain capability. It facilitates internal and external connectivity, data integrity, and a single version of the truth.

When the pandemic hit, leading companies were already on their way to digitizing their supply chains and a greater reliance on cloud technologies. These strategic moves made it easier to continue operations with minimal interruption.

Homegrown Organic Farms BB #:161459 in Porterville, CA, was already moving things to the cloud when Covid hit in early March. The company shifted some employees to remote work and maintained a safe working environment for onsite workers to avoid Covid spread.

Despite remote activities, connectivity and control remained strong.

“Technology was a big part of it,” says Mason Brady, CFO and director of supply chain. “We especially enjoyed using the Microsoft 365 platform from a cloud accessibility standpoint and the Teams video sharing tool to hold regular meetings and have regular check-ins with people.”

Internal and external collaboration are essential for overcoming the unique challenges of an ongoing disruption like a pandemic.

Responding to these dynamic conditions requires consistent cross-chain engagement with partners to build trust. Novel solutions must be developed, agreed upon, and quickly implemented to maintain product flows.

Oppy, BB #:116424 Vancouver, BC, navigated the pandemic through a task force that met daily to address Covid issues and how to operate safely. Another group, made up of senior department heads and the CEO, met daily to address the business impacts of the pandemic.

The second group, Steve Roosdahl, vice president of operations, explains, “looked at issues related to servicing our customers, our growers, and our products, along with the financial impacts. We were ensuring that we had good communication, and everyone understood what they were supposed to do.”

Diversification is an important risk mitigation method that became apparent early in the pandemic. Avoiding overdependence on a single supplier and building redundancies into a supply chain provides protection. Establishing alternate sources of supply and delivery to supplement existing capacity is key to maintaining a continuous flow of product.

With this strategy in mind, Consumer Fresh Produce, Inc. BB #:292771 in Pittsburgh, PA, never single sources its largest commodities.

General manager James Houser notes that the company’s largest suppliers only made up 4 to 6 percent of the entire buy. The company also gives lead buyers the flexibility to make “in the moment” decisions to change inventories daily.

Finally, preparation is an ongoing responsibility of organizational leaders. While many organizations did not have a written pandemic plan, those that regularly evaluated and practiced for other types of disruptions were on solid footing to respond.

Chuck Curl, director of regulatory, risk and compliance at Bancroft, WI-based RPE Inc. BB #:105471 notes that RPE had the technology infrastructure, accessible data, and analytics mindset to recover quickly from the initial impacts of the pandemic.

Further, produce companies must keep their guard up—and not relax—when Covid surges subside, according to the experts.

Curl discusses the importance of conducting a postmortem of Covid responses to review what went well, what didn’t, and what needs to change in the future. Also needed is a regular cadence of planning meetings to assess risks and develop contingency plans.

Brady says Homegrown has a risk management task force that meets quarterly. These advanced preparations help the companies better anticipate the unexpected and mitigate downtime when problems arise.

LOOKING FORWARD
The global pandemic has caused companies across industries to reevaluate their reliance on offshoring, sole sourcing of product and delivery, and other supply chain efficiency strategies.

Rather than hastily making wholesale changes to their planning and operations, fresh produce companies should assess their performance during the pandemic and adjust accordingly. Doing so will enhance future supply chain agility and resiliency.

Moving forward, produce companies should adopt a strategic blend of technology, collaboration, diversification, and preparation to guard against future disruptions.

By doing so, they will reduce vulnerabilities to common supply chain disruptions and promote rapid response to those once-in-a-career events like a global pandemic.

This is a Supply Chain Solutions feature from the March/April 2021 issue of Produce Blueprints Magazine. Click here to read the whole issue.

Dr. Brian Gibson is executive director of Auburn University's Center for Supply Chain Innovation and a former logistics manager.