Resilience Of Global Food Supply Chains

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SUMMARY REPORTResilience of global food supply chains

2ABOUT THE RESILIENCE SHIFTThe Resilience Shift exists to inspire and empower a globalcommunity to make the world safer through resilient infrastructure.More people than ever depend on the critical infrastructuresystems that provide essential energy, water, transport andcommunications services, and underpin food, healthcare andeducation. When this infrastructure fails the consequences can becatastrophic.Supported by Lloyd’s Register Foundation and Arup, theResilience Shift provides knowledge and tools for thoseresponsible for planning, financing, designing, delivering,operating and maintaining critical infrastructure systems. Our aimis to ensure infrastructure systems are able to withstand, adapt to,and recover quickly from anticipated or unexpected shocks andstresses - now and in the future.DEFINING RESILIENCEResilience is the ability to withstand, adapt to changingconditions, and recover positively from shocks and stresses.Resilient infrastructure will therefore be able to continue to provideessential services, due to its ability to withstand, adapt andrecover positively from whatever shocks and stresses it may facenow and in the future.AUTHORSCITATION REFERENCEDarren Briggs (Arup), Graham Stewart(Arup), Gerard de Villiers (Arup)Briggs, D., Stewart, G., and de Villiers, G. (May2019) Resilience of global food supply chains.Summary Report. Arup and Resilience Shift, UK.Published by: The Resilience Shift incollaboration with ArupMay 2019CC BY-N C -N D 4. 0This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), whichpermits unrestricted non-commercial use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and thesource, provide a link to the Creative Commons license, and indicate if changes were made.

3R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SContents3Contents4Foreword6Introduction8Initial research9Global workshops10Workshop approach12Common themes13Transferable findings16Opportunities for action

4R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SForewordThe movement of food around the world is an important realityof today’s globalised, urbanised and heavily populated world.Even small disruptions within the supply chain can result incascading impacts that have negative consequences from farmersto consumers.The Resilience Shift’s focus is on the resilience of criticalinfrastructure systems, and we recognise that complex globalsupply chains (of food and other commodities) rely on transport,energy, water and communications to retain core functionalityunder diverse shocks and stresses. Our work to date has toldus that in the food sector, there are multiple and diverse threats,and that the resilience of infrastructure has limited visibility, with atendency for supply chains to react to unexpected events ratherthan to proactively plan for them. In an industry dominated byprivate sector actors, there is no common understanding of thewider system, and hence no joined-up approach to taking steps toimprove its resilience in practice.This brief report presents the findings from a global series ofworkshops, engaging stakeholders from across the food supplychain, seeking to benchmark how the resilience of criticalinfrastructure is understood and dealt with in practice. It presentsa global view of current practice, highlighting common themes andregional and organisational differences.Enhancing the resilience of the global supply of food requireseveryone in the supply chain to understand the system and itsvulnerabilities in order to be able to respond to and recover fromunexpected events.

5R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SDroughts in California led to significant decrease in groundwater levels in aquifiers,which led to new sustainable rules, limiting and monitoring the groundwater usage forfarmers. (Photo - Red and green lettuce fields in California, courtesy of Malcolm Carlaw)

6R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SIntroductionA supply chain’s ability to deliver a customer the right product,of the right quality, in the right place, at the right time, for theright price, is the bedrock of supply chain managers around theworld. This holds true for food supply chains, and their resilienceis therefore a topic that concerns not only the organisations withinthe supply chain but also governments and policy makers. At theirworst, disruptions can lead to significant impacts on society.Escalating urbanisation and globalisation is resulting in supplychains that are more complex and diverse. Supply chains, andtherefore communities, rely on critical infrastructure to function.However, global supply chains are extremely difficult to map andunderstand. The Business Continuity Institute (BCI)’s 2017 surveyfound that 69% of their industrial respondents do not have fullvisibility of their supply chains1. The report concluded that thesurprising aspect was not that 69% of respondents did not havevisibility of their global supply chains, but that 31% claimed theydid.Furthermore, two-thirds (65%) of BCI’s respondents (408respondents over 64 countries) have experienced at least onesupply chain disruption. The causes of these are varied, fromsupply chain operational issues, such as the shortfall of chickensin UK Kentucky Fried Chicken outlets in 20172, or microchipshortages resulting from a fire at a Philips facility in New Mexico in20003 which led to a significant loss in market share for the mobilephone company Ericsson, to natural disasters such as the 2011Thailand floods4.1. BCI Supply Chain Resilience Report 2017, Business Continuity Institute, Berkshire, UK2. 3. 7/when-the-chain-breaks4. Haraguchi & Lall (2014) Flood risks and impacts: A case study of Thailand’s floods in 2011. InternationalJournal of Disaster Risk Reduction, http://dx.doi.org/10.1016/j.ijdrr.2014.09.005i

7R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SFigure 1:Overview of the food supply chain and its dependencies2IN F RA ST R U C T U R E D EP EN D EN C I ESTransport fuel, transport network, communications, financial services, electicity, gas, water and sanitationGoods transport toand from siteGas andprocessingGoods transport toand from siteSite power,electronic,transactions, waterfor cleaningG R O C ERYDomestic inputsR ETAI LFOODFOODPRO C E SSIN GFO O DP RODUCTIONAND/ORDISTRIBUTIONI N FO R MALFO ODMAR K ETCONSUMERSPA C KA GIN GFOODS ER VI C ESImported fertiliserschemicals andstockfeedImportedingredientsand packagingmaterials(Prepared food)Imported finishedgoodsIM PO RTD E PE N D E N C IE S5. Adapted from Figure 1, p viii, Resilience in the Australian food supply chain, Department of Agriculture,Fisheries and Forestry, Australian Government, February 2019

8R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SInitial researchInitial research, covering over 40 companies in the UK food supplychain sector highlighted that infrastructure, as a key componentwithin a supply chain, has received limited attention. There is littleunderstanding within supply chains as to how the resilience of theinfrastructure that a supply chain relies upon should be managed andinfluenced.Findings of the research suggest that, it is more essential thanever for all parties involved in the grocery supply chain to be moreadaptable going forward, in order to be resilient to potential failures.of firms expected some level ofdisruption to their supply chains fromBritain leaving the European Unionbut only half had contingency plansOnly8%of firms believe theyoperate truly agilesupply chains that canquickly respond to adisruption100%70%Expecteddisruptionfrom adverseweatheragreed that technologywould help to reducesupply chain risksThe incoming headwinds of Britain leaving the European Union,climate change and the exponential increase in the pace oftechnological change mean that producers, logistics firms,distributors, retailers and asset owners in the supply chain must takeaction to ensure resilience.

9R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SGlobal workshopsBuilding on this research, a subsequent phase of engagement,comprising a global series of stakeholder workshops wasundertaken. More than 70 representatives from organisationsconnected with food supply chains took part in workshops inSan Francisco, New York, Manchester, Madrid, Hong Kong,Johannesburg and Brisbane. These cities provide a diverse contextof coastal vs inland, varying natural and manmade hazards, anddiffering political contexts.MAN C H ES T ERSA N F RA N C ISC OHONG KONGMAD R I DN E W YO RKMap of citieswhere stakeholderworkshops tookplaceB R I S B AN EJ O H AN N ES B U R GI N D U S T RYIN F RA STRU C TU RE O P ER AT O R SFigure 2Profile ofrepresentativecompanies7%V O C ATIO N A L SO C I ET I ESG O VER N MEN T /7%P O LI C Y MAK ERS28%9%12%17%OT H ER12%C O N S U LTAN TS13%L O GIST I C S S ER VI C EP R O VI D ER SAC AD EMI A

10R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SWorkshop approachThe workshops considered shocks and stresses that can affectthe availability and effectiveness of food supply chain infrastructurecovering political drivers, environmental drivers and technologicaldrivers. These were categorised based on their impact on operations, and the ability of organisations to respond.For example, torrential rain could have a high potential impact onoperations because of flooding of roads. The ability to respond mightdepend on flood prevention measures, or the availability of alternativeroutes.Figure 3 shows the overall categorisation of shocks and stressesfrom all workshops.Attendees were also asked to identify measures that would help toincrease the overall resilience of supply chains, and to discuss gapsor priority areas for further research.Collated results for all workshops are available on theResilience Shift website.

11R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SALL WORKSHOPS TOGETHER - PLACEMENT OF DRIVERSALL WORKSHOPS TOGETHER - PLACEMENT OF DRIVERSHIGH POTNETIAL IMPACT AND LOW ABILITY TO RESPOND0%10%20%30%40%50%60%70%80%90%100%SEVERE WEATHER EVENTS (E.G. TORNADO, ETC)INFRASTRUCTURE CAPACITY (POWER)INFRASTRUCTURE CAPACITY (ROADS)ECONOMIC INSTABILITYINFRASTRUCTURE CAPACITY (RAIL)CYBER CRIMEFAILURE OF NATIONAL GOVERNANCEHigh PotLow AbilCOMMUNICATION INFRASTRUCTURE FAILUREUTILITIES INFRASTRUCTURE FAILUREFLOODINGWATER SCARCITY AND CONTAMINATIONFAILURE OF INTERNATIONAL GOVERNANCEAVAILABILITY OF LABOURHigh PotHigh AbiDISEASECRIME/TERRORISMEXTREME HOT WEATHERPOVERTY AND INEQUALITYINTRODUCTION OF NEW BORDER TARIFFSFRAGMENTATION WITHIN TRANSPORT OPERATIONSOther ReECOSYSTEM DEGRADATIONPOOR GOVERNANCEPOOR PLANNINGEXTREME COLD WEATHERRELIANCE ON SPECIFIC CUSTOMERSAIR POLLUTIONLACK OF ACCESS TO INFORMATION/DATACHANGING SHIPPING ROUTESLAND CONTAMINATIONTRANSPORT INFRASTRUCTURE ACCIDENTSBUILDINGS COLLAPSEINDUSTRIAL ACCIDENTSHigh Potential Impact andLow Ability to RespondHigh Potential Impact andHigh Ability to RespondFigure 3Categorisation of shocks and stresses by both high impact/low ability to respond,and high impact/high ability to respondOther responses

12R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SCommon themesThe following common themes emerged across all regions:POOR PLANNINGPoor planning was rated as the most significant stress but wasinterpreted in different ways by each region. National planningframeworks were blamed for ills such as traffic congestion, crime,urban sprawl, slums and natural degradation. This failed planningalso has a considerable impact on infrastructure operators flexibilityto respond to market and demand changes, as well as the abilityto mitigate shocks and stresses. A second focus was on the poorplanning of supply chains, and inadequate risk management.FRAGMENTED GOVERNANCEPublic sector leadership and governance allows a region/city tofunction effectively. However, fragmented governance can result innon-transparent decision making and poor leadership can underminethe welfare of citizens, and lead to conflict. From a supply chainperspective, poor governance includes lack of clear ownership,and therefore not putting in place the right oversight and measures(process, system or asset changes).

13R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN STransferable findingsThe following themes emerged in some cities, which can and shouldbe transferable to other regions and geographies. The fact that thesethemes were not common across all the workshops demonstratesthat stakeholders are often very focused on their own knowledge andexperience, and lessons from across the wider system are not beingshared or acted upon.DISASTER PREPAREDNESSThis was a key measure prioritised by attendees at the SanFrancisco workshop, clearly a function of its location in an area ofhigh earthquake risk. Attendees in both San Francisco and NewYork (which was severely impacted by Superstorm Sandy in 20126)highlighted the importance of integrated decision-making across allinfrastructure sectors. The views of the workshop attendees in SouthAfrica were influenced by their vulnerability to droughts.SUSTAINABLE AND RESILIENT INFRASTRUCTUREThere was a greater focus in New York on the role of ‘greentechnology’ in the provision of infrastructure and on sustainabledevelopment of infrastructure. One priority intervention was the needfor the development of resilient infrastructure networks includinghardware.LOCAL AND INTERNATIONAL POLITICAL CHALLENGESChallenges in South Africa around political instability emerged in theJohannesburg workshop, which focused on prioritising improvedgovernance and greater control in asset management, as well as themeasurement and monitoring of polices and regulations related toinfrastructure.The response in Manchester was dominated by the politicaluncertainty around Britain leaving the European Union. There was anurgency to better prepare for consequences of leaving the EuropeanUnion in having clarity of options and additional capacity throughintermodal solutions. Attendees in Brisbane also supported betteralignment of different transport modes.6. ooming-food-disaster/7294/

14R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SAustralia’s stringent biosecurity laws and regulation meanthat supply chains can be significantly impacted by threatsof invasive species and pests. The example of the stinkbugs found in shipping containers and requiring extensiveinterventions, causing disruption to supply chains, was sharedat the Brisbane workshop7.SPATIAL PLANNINGHong Kong is exposed to typhoons and high winds.Underground facilities were identified as a potential responsemeasure, which also makes sense in a region where space is invery high demand.COMMUNICATIONS AND CYBER-SECURITYAttendees in Brisbane expressed concern about governanceof communication infrastructure, and its security against cyberthreats. Cyber security was also important in Spain.GEOGRAPHIC CONSTRAINTSIn Brisbane, there was an emphasis on the need for morestorage capacity for liquid fuels, related to the vast distances ofhinterland transport corridors.PUBLIC-PRIVATE COLLABORATIONResponses in both Madrid and Hong Kong included referenceto public-private collaboration. In Hong Kong this was notedas an area for potential improvement, whereas in Madrid, theZaragoza logistics cluster8 was highlighted as a successfuldevelopment example between government and private sectorlogistics service providers.7. utbreaks/brown-marmorated-stink-bug8. /

15R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SFigure 4Priority shocks and stresses by regionN E W YORKM A N C H E S T ERHONG KONG Availability of labour Poor planning Poor planning Communication infrastructurefailure Lack of access to information/data Water scarcity and contamination Severe weather events (e.g.tornado, etc) Flooding Utilities infrastructure failureMAD R I D Poor planning Lack of access toinformation/data Poor governanceSA N FRANCIS CO Poor planning Water scarcity and contamination Utilities infrastructure failureJO H A N N ES B U R GB R I S B AN E Communication infrastructurefailure Flooding Poor governance Communication infrastructurefailure Economic instability Water scarcity and contamination

16R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SOpportunities for actionFigure 5Opportunities for action by regionN E W YORKHONG KONGM A N C H E S T ER Green technology Integrated modal policies Cross harbour Better education Public awareness Business continuity Networks and hardware Best practices guides Data analytics Register of infrastructure Increased automation Intermodal supply chains Policy review of food supply chaininfrastructure Collaborative with government Develop underground facilities Automation and digitalisation notuseful (too expensive) Control and governanceMAD R I D Policy coherence Integrated planning Control and governance Public-private collaboration Improve education Cyber awareness Technological educationSA N FRANCIS CO Integrated decisions oninfrastructure Emergency food hubs Understanding systems Life cycle impact of infrastructure Coordinated planning Regenerative agricultureinfrastructureJO H A N NES B U R G Appropriate education Control and governance Measure and monitor policies Integrated planning Traceability Supply chain metricsB R I S B AN E Policy resources Capacity development SMEs Better cyber crime protection Governance and collaboration Intermodal alignment Storage capacity Infrastructure

17R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN SEach workshop considered the question “How could the ResilienceShift best support organisations in improving their resilience?” Figure5 shows the key opportunities for action for each region, but thefollowing themes were common across all regions:1. A common understanding of the importance of the resilience ofcritical infrastructure – why this matters.2. Better integrated planning across all types of infrastructure, fromdesign, construction and commissioning.3. Intermodal integration of transport infrastructure to improveinterconnectivity across road, rail, sea, inland waterways and air.4. Better integration between public and private sector in themanagement of infrastructure systems, with consideration ofresilience.5. Technology as an enabler of resilience by creating the ability torapidly react, respond to, and recover from unexpected events.

18R E SI L I E NCE O F G L O B AL FO O D SUPPLY C H AIN Sresilienceshift.org

Initial research, covering over 40 companies in the UK food supply chain sector highlighted that infrastructure, as a key component within a supply chain, has received limited attention. There is little understanding within supply chains as to how the resilience of the infrastructure that a supply chain relies upon should be managed and influenced.

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