This site depends on JavaScript to run. Please enable it or upgrade to a modern browser that supports it.

ASCM Insights

Food Supply Chains Caught in Another Perfect Storm

title

As Omicron drives the high-speed spread of new COVID infections all across the globe, our pandemic fatigue is mounting yet again. Making matters worse, empty grocery aisles invoke unpleasant memories of 2020, dealing yet another psychological blow. During such trying times, it’s tough to stay positive and focused on finding solutions, but there’s zero doubt that the entire world is counting on supply chains right now.

Scarcity is all around us: Germany is facing massive supply chain disruptions, and the country’s chamber of commerce is especially concerned about the food industry. In Australia, container transport operators report as much as a 50% staff reduction of container crews, forklift operators, warehouse workers and heavy-vehicle drivers. Here in the United States, the grocery out-of-stock rate is at about 15%, as COVID outbreaks at farms, factories, distributors and retailers hinder product delivery. Vivek Sankaran, CEO of U.S. grocery giant Albertsons, says the retail chain is bracing for four-to-six more weeks of stockouts.

The empty shelves are the result of three main issues:

1. Grocery store, food production and logistics workers are contracting the virus in record-breaking numbers. In an earnings call last week, Sean Connolly, president and CEO of Conagra, the parent company of Duncan Hines and Healthy Choice, says his company is experiencing a rise in “omicron-driven absenteeism.” In fact, a recent survey conducted by the National Grocers Association found that many grocers are operating with just half of their normal workforces.

2. Other workers are choosing to leave their frontline jobs in an attempt to protect themselves and stay healthy. Phil Lempert, food marketing expert and editor of SupermarketGuru.com, says the pandemic has turned grocery stores into “battlefields,” with employees required to work throughout the pandemic, justify food shortages and public health measures to customers, and keep themselves safe in the process. “A lot of people said, ‘Hey, I don't need this,’” he told NPR. “We’re really seeing the perfect storm.”

3. Severe weather is limiting food production and disrupting transportation routes. According to CNN, the last seven years have been the seven warmest on record, as the Earth’s temperature continues its climb due to heat-trapping fossil fuel emissions. Melting in the Arctic, deadly floods, unprecedented heat waves and historic droughts are all affecting the food supply chain. Furthermore, Bloomberg recently reported that livestock are consuming corn and soy faster than farmers can grow it. And with less grain to feed farm animals, there’s a downstream effect on the availability of meat, eggs and dairy products. The harsh weather conditions are also making it more difficult to distribute food. For example, harsh winter storms in Washington state prompted the closure of major roads and slowed shipments to Alaska, where customers face strikingly stark shelves.

Finding the answers

The solutions to these supply chain problems are out there; they just need to be identified via research, innovation and ongoing learning. This is a critical time to keep up with both your team’s and your own supply chain expertise. ASCM offers a wide range of credentials and certifications covering every aspect of end-to-end supply chain operations. With varying options designed for teams and individuals at all points in their careers, ASCM education provides the essential knowledge and strategies to deliver results that make an impact. Start finding your answers today.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer of the Association for Supply Chain Management (ASCM), the largest organization for supply chain and the global pacesetter of organizational transformation, talent development and supply chain innovation. During his tenure, ASCM has significantly expanded its services to corporations, individuals and communities. Its revenue has more than doubled, and the association successfully completed three mergers in response to both heightened industry awareness and the vast and ongoing global impact driven by supply chains. Previously, Eshkenazi was the managing director of the Operations Consulting Group of American Express Tax and Business Services. He may be contacted at abe@ascm.org.

Use of Cookies

We use cookies to personalize our website’s content and ads, to provide social media features and to analyze our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you’ve provided to them or that they’ve collected from your use of their services. You consent to our cookies if you continue to use our website.