Complex supply chains put UK food system at risk

10 June 2020

Complex just-in-time supply chains and an increased likelihood of blockages are putting the UK’s food system at risk, according to a report.

The report by York Management School and the University of York said complexity had made supply chains more vulnerable.

“Despite advances in supply chain technology and logistics, sourcing efficiency has paradoxically made supply chains more vulnerable to disruptions,” it said.

“The length and complex networks of contemporary supply chains make them difficult to regulate and manage.”

The report said the UK imported half of its food as well as 84% of fresh fruit. It was “dangerously dependent” on Spain and the Netherlands for vegetables, with trade relying on frictionless borders.

“The degree to which this dependence can be sustained after Brexit is a moot point, to say the least. The UK government in partnership with the food industry must rethink this reliance on such a vulnerable food system in the Covid-19 recovery period,” said the report. 

The report urged the government to consider diversifying port capacity and to address labour and migration policies in the agrifood sector.

“Failure in complex supply chain networks might also manifest as a form of deadlock, where all parts of the network are stopped waiting for resources, and the complex interdependencies between the parts (organisations and processes in the supply chains) of the network make freeing the deadlock extremely difficult.”

The UK’s just-in-time supply chains mean an individual store places an order in the morning via in-store electronic point of sale algorithms, which is then passed to supermarket headquarters, for example.

Before noon the same day the order is relayed to a third-party supplier in a country such as Spain and the supermarket then expects delivery of this order the next day in what is termed a “day-one-for-day-two system”.

“Political disruptions, such as Brexit in the UK, can also expose vulnerabilities in systems, for example, dependence on a small number of suppliers,” the report said.

If such an event coincided with “large-scale systemic shocks, such as Covid-19” this could overlap and trigger shocks elsewhere in the system putting food supply at risk.

The UK is reliant on 70,000–80,000 seasonal agricultural workers entering the UK every year, mainly from Romania and Bulgaria, to harvest crops.

“Owing to travel restrictions related to Covid-19 a huge deployment of labour from other sectors such as hospitality and perhaps incentivisation of students may be required to fill this labour gap,” said the report.

It said failure to enforce mandatory social distancing and robust preventative measures in factories could lead to staff walkouts.

“In the longer term, a new agricultural policy should also consider incentives to increase farm uptake of digital engagement and mechanisation to drive up both sector productivity and reduce the reliance on labour,” the report added.

In May Regency Purchasing said the coronavirus pandemic could provide a stimulus for the UK to move towards self-sufficiency in food.

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