Increasingly erratic weather events, greater numbers of severe natural disasters per year, buckling infrastructure: these are a few of the supply chain disruptions retailers have already begun to see as a result of climate change.
According to researchers from Penn State and Northern Arizona University, there is another climate change-induced challenge on the horizon that retailers and consumers will need to tackle soon: urban food shocks caused by shortages in food supply chains.
In an article published this month in Nature, scientists posit that supply chain diversification could prove a viable solution to this problem.
“Food supply shocks are increasing worldwide, particularly the type of shock wherein food production or distribution loss in one location propagates through the food supply chain to other locations,” wrote researchers in the report.
“Analogous to biodiversity buffering ecosystems against external shocks, ecological theory suggests that food supply chain diversity is crucial for managing the risk of food shock to human populations,” they continued.
Researchers suggested that increasing food supply chain diversification can help to increase a population’s resistance to food shocks (or shortages) of mild to moderate severity by up to 15 percent.
As extreme weather events become more common and severe – including events like drought and flooding that affect crop yield — supply chain leaders need to reduce their reliance on suppliers in a single region to ensure disruptions specific to certain geographies do not affect their operations to a detrimental degree.
Now, empirical science backs what many sourcing and supply chain leaders at massive retailers have observed firsthand: supply chain diversification improves supply chain resilience. Specifically, for cities in the US, the probability of an annual food supply shock declines as the diversity of a city’s food inflow increases.
“This method aims at operationalizing ecological theory and network theory to form a valid engineering operations risk management framework for supply chains, grounded in empirical science,” researchers stated.
Smaller food retailers or large retailers that have not yet diversified their supplier base should invest in systems and processes to support this transition now, given that climate change will only become more obvious in the coming years.
Digitizing sourcing operations enables retailers to drive efficiencies and identify a range of optimal buying opportunities for a more reliable, resilient supply chain.
Bamboo Rose’s B2B Marketplace and Digital Sourcing solutions allow retailers to efficiently onboard suppliers, monitor supplier compliance, and browse and filter product offerings across the supplier base in an intuitive, engaging digital environment.
The solution also includes a supplier recommendation capability that augments historic sourcing data with other information including compliance, sustainability, supplier capabilities, factory capacity, supplier and regional exposure, and quality performance to make intelligent supplier recommendations based on the product being sourced.
Seamless, digitized access to an extensive, connected network of suppliers and vendors enables retailers to easily select and onboard new supplier partners across regions and geographies that meet their needs.
Investing in a more diverse supply chain improves surety of supply, reduces the likelihood of urban food shocks, and boosts supply chain resilience in a time of global unpredictability.
Sourcing and supply chain diversification does require a change in how operations have traditionally been carried out, but it doesn’t have to be a headache. The sooner retailers broaden their supplier base, the better equipped they’ll be to adapt to future supply chain disruption.