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Chipocalypse and Food Shortage – How Better Procurement Practices and Supply Chain Management can Help Avoid Such Situations

Oct 18, 2017

Supermarkets in New Zealand posting notes on chips shortage likely to last until New Year has hit the panic button for most food and crisp lovers there. Potato chips or potato crisps suppliers are facing challenges meeting the demand for potato chips after a year of heavy rain and two serious floods have wiped out almost 20% of New Zealand’s annual potato crop. The majority of the potato crop affected were of the variety that was used to make crisps. Also, the production of more potato crisps seems dubious after the news that planting new season crops have been delayed as the ground is still too wet for plantation. Japan also faced a similar food shortage problem earlier in the year as bad weather in Hokkaido, where 80% of country’s potatoes are grown, caused the vegetables to reach the retail store very late.SE_Demo2

So how can such food shortage situation be avoided in the future?

IoT and Predictive Analytics

A majority of crop losses are mainly due to adverse weather conditions. There was not much a farmer could have done in the past, but IoT coupled with predictive analytics can help farmers by analyzing weather data to build predictive weather modeling. Such models can provide farmers with insight to make decisions regarding time to plant crops, and when to take actions to prevent damage from adverse weather conditions.

Supplier Diversity

Supplier diversity is an essential procurement strategy that recognizes opportunities for economic advantage by tapping into the strength of small and diverse suppliers. Many companies opt for supplier diversity in a bit to promote sustainable procurement practices. Additionally, such practices also provide buyers with multiple procurement channels for agricultural goods, along with increasing the competition amongst supplier, which can drive the prices down.

Investment in Innovation

Investment in agricultural research, technology transfer, and farm extension and advisory services can significantly improve the ability of the farmers to not only deal with food shortage but also rapidly improve productivity. With the increase in food supply, the markets can deal with pressure on food prices and price volatility.

Supply Chain Optimization

In order to avoid food shortage situations, suppliers and buyers should look to optimize their supply chain management. Organizations should develop efficient sourcing strategies to maintain an optimal stock that can meet operational needs along with buffer stocks that will suffice as contingencies. Buyer can choose from various models and tools are available to set the buffer stock levels accurately.

For more information on how better procurement practices, supply chain management, sourcing strategy, and supplier relationship management can help avoid food crisis:

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