John Giles is a Divisional Director with Promar International, the agri-food consulting arm of Genus plc and has worked on market and supply chain assessments in the UK and over 60 countries around the world in Europe, North America, Latin America, the Middle East, Africa and Asia. He is also a visiting fellow at the School of Agriculture Policy and Development at the University of Reading. He is a member of the IAGRM Council.

Through this article, John Giles discusses the increasing frequency and complexity of supply chain disruptions in the agri-food sector, particularly in light of recent global events like COVID-19, Brexit and geopolitical tensions. He argues that these disruptions, while significant, are not surprising in today's volatile, uncertain, complex and ambiguous (VUCA) world. Giles emphasises that supply chain shocks have always existed but are now part of a broader pattern where micro-level issues can lead to macro-level effects.

There has been much talk over the last few years about the impact of supply chain shocks across the UK and international agri-food and farming sectors, such as:

• COVID - a global incident, and one which, apart from the terrible human cost, led to severe declines in economic growth and international trade and consumer well-being.

• BREXIT – a self-inflicted situation, of course, for the UK, but which has had adverse knock-on impacts on many other countries who trade with the UK, especially in the EU.

• The situation in the Ukraine and now the Middle East. This has led to soaring costs of inputs and energy in particular and a vast amount of international uncertainty.

• Climate change – an ongoing issue, with adverse and unpredictable weather patterns around the world and happening more often in Africa, Latin America, parts of Europe, Asia and North America - all leading to disruptions to agri-food production and trade.

• Food inflation – this was experienced in many countries and has seen consumer behaviour change, demand suppressed - in some cases, maybe for good.

"Resilient, transparent, and collaborative supply chains are essential for agri-food businesses to plan for the inevitable shocks ahead effectively."

There has been much already written about these “shocks”, of course and in their way, they have all caused severe disruptions to the UK and international agri-food and farming supply chains.

Going back in time, we also had to endure the Global Financial Crisis and severe outbreaks of FMD and BSE in the UK. There have also been issues with transport logistics, especially in the Suez Canal over time, as well as consumer and political opposition to adopting new agri-food technology, especially in Europe, but maybe less so in other parts of the world.  There are also broader geopolitical tensions, not least between the US and China, which have seen issues around international trade and knock-on impacts across SE Asia, in particular.

What seems to be clear is a combination of:

• These supply chain shocks have always been happening.

• They seem to be happening more often.

• The causes and impacts are increasingly complex and global in nature: global supply chains are often turning micro shocks into macro-level effects.

• The after-effects can take a long time to recover from.

So, should we be shocked by “supply chain shocks” anymore? Probably not. We live and work in a volatile, uncertain, complex and ambiguous (VUCA) society. Supply chain shocks are all part and parcel of this, it seems. Many of the things that constitute a “supply chain shock” are often well beyond the control of individual agri-food companies, but this does not mean there is nothing that can be done to mitigate against them. There are several things that can be done, albeit some are easier than others to do (and just because they are “difficult to do” does not mean they should be avoided either). These might include:

• Be as well informed as possible about what is happening around the world - especially in the regions that you deal with either as a supplier or as a customer: this means understanding politics, economics and societal changes taking place, as well as the specifics of the agri-food sector.

• Keep abreast of market conditions–investing in market and industry dashboards regularly and consistently can help here. Their use means a formal understanding of key developments can be developed in economics, input and output prices, progress in key trade negotiations, etc.

None of the current market volatility we are seeing and its underlying causes are likely to go away in the near or even mid-term future.

One thing is certain: agri-food and farming businesses must plan for an uncertain future. Factoring this into their mid to long-term planning will be very important. We will also need more resilient, transparent and collaborative agri-food and farming supply chains.

“Resilient, transparent, and collaborative supply chains are essential for agri-food businesses to plan for the inevitable shocks ahead effectively.”

It is sometimes hard to know where to start developing the thinking needed to deal with these issues. What we do know, though, is that there are more supply chain shocks on the way. History tells us that. We have often found in working with clients these issues, rather than trying to predict the specific event itself, a helpful starting point can be to ask the question of all parts of the business: production, processing, R&D, innovation, HR and legal, marketing, procurement, finance and so on – “what’s the worst thing that can happen and if it did, what would we do?”

This can usually be done in a workshop-type session and is often highly stimulating. And it leaves an organisation and its key stakeholders in a much better position to deal with the “Luca” environment in a more specific position in which to operate going forward.

But more supply chain shocks are probably on the way: this should not be a shock in itself, surely?