How Supply Chain Management is Affected by Human or Natural Causes
Guest Post By Dr. William Oliver Hedgepeth
Faculty Member, Transportation and Logistics Management, American Public University
If you are not into logistics, supply chain management, manufacturing or warehousing, you might not ever think about where products begin. Each element is important and a part of the often invisible supply chain for all products. The items you purchase in a grocery store, for example, represent the end product of a complex spider web of raw materials and finished products in constant motion.
The Vanilla Shortage and Supply Chain Management
Our food supply chains can be affected by manmade incidents and Mother Nature’s disasters. If you love to visit your favorite bakery, you may have noticed the price of donuts increasing over the past few years due to the rising cost of vanilla.
The price of vanilla beans was $100 per kilogram in 2015. By the end of 2017, vanilla cost $500 per kilogram and its price is likely to increase further in 2018.
The problem for vanilla is that 80% of the crop comes from a special orchid grown in one place, Madagascar. It takes five or more years for the crop to replenish itself before it can be harvested again.
The collapse of the vanilla supply chain was compounded by another supply chain element, the living things that pollinate the orchid. In all parts of the world, a key worker in the fields is the bee. The enemy of the vanilla flower were the rains that ripped across Madagascar and destroyed acres of plants, creating a shortage of vanilla beans.
Honey Bees Offer Lesson in Proper Supply Chain Management
Dr. Wayne Surles has studied the honey bee for over 20 years, looking into what helps and what hurts the bees in the making of honey. He examined pesticides that affect honey production as well as other agricultural products. Dr. Surles says that 30% of the honey bee population is lost each winter and in the summer months.
The Richmond Beekeepers Association keeps statistics and information on how to protect honey bees so they can do their job of pollination and produce honey. Currently, there appear to be nearly two and a half million beehives in the U.S.
When it is time to pollinate fruit trees and other crops, bees are often shipped around the country to do the all-important job of fertilizing crops. However, it seems that bees are dying from a lack of the proper amount of nectar and pollen that sustain them.
Also, a mysterious illness known as Colony Collapse Disorder (CCD) has destroyed untold numbers of beehives. A survey of nearly 5,000 beekeepers across the United States found a third of the bees they managed died from this disorder between April 2016 and March 2017.
As a result, the natural swarming of bees in time for the growing season is in decline and a new supply chain has emerged. If the honey bee was the beginning of that jar of honey in its supply chain, now we have to extend that supply chain to a new origin – the beekeeper.
Beekeepers now travel around the county to the farms with hives of honey bees, the starting point of so many agricultural products, the Virginia Department of Agriculture and Consumer Services reports. Those transportation costs and the upkeep of beehives must then be added to the cost of gathering that honey or other foods. The extension of the supply chain starting point for honey is now longer and more complex.
Pesticides Also Affecting Supply Chain Management
But there is another enemy of this new starting point besides CCD. It comes in the form of pesticides that are resistant to insects, including the honey bee. Currently, companies that produce great agricultural products, such as Bayer and Monsanto, also continue to manufacture pesticides to control weeds and kill bugs that destroy crops.
There is a large and growing chorus of people against the increased use of such pesticides and herbicides, which could also contribute to the spread of CCD. The starting point of the new fruit and vegetable supply chain in the U.S. is under attack from a manmade enemy, even more so than from too much rain, wind, and sun.
I own an old farm with fruit trees. The farm used to have a huge blackberry bush that attracted bees and bugs. I killed the bees and bugs with pesticides and sprayed so much Roundup on the weeds that the blackberry bush died and the pesticide got into the soil. As a result, my fruit trees have not produced but a handful of apples, peaches, and pears in the past five years.
I am part of the man-made problem responsible for the new food supply chain beginning. Have I learned my lesson? Yes.
But others need to earn to be careful too. Supply chains are useful, but they are vulnerable to the whims of Mother Nature and human actions.
About the Author
Dr. Oliver Hedgepeth is a full-time professor at American Public University (APU). He is the former program director of three academic programs: Reverse Logistics Management, Transportation and Logistics Management and Government Contracting. Dr. Hedgepeth was a tenured associate professor of Logistics and chair of the Logistics Department at the University of Alaska Anchorage. He has published two books, RFID Metrics and How Grandma Braided the Rain.