bowl of Asian curry

Just in time food supply

When I go to the supermarket there is always food on the shelves. I can choose among thousands of products without a care other than for the family budget. I am one lucky…

I am fond of curry. Over the years I have made a fair few. The authentic recipes that build the layers of taste from scratch are my favourites and with patience and a well-stocked spice rack, they help me create passable dishes.

As with most cuisines, success rests on the ingredients. And as I am fortunate to live on the outskirts of a global city they are just a shopping trip away.

If I need Kashmiri chilli powder, rather than the generic variety, there is a specialist store selling Indian spices. It is a little out of my way but worth it for the gentle heat that the real stuff brings to the biryani.

As a customer, I have no idea how the chilli powder made the long journey to ‘Rice to Spice’ on the high street.

Just in time is the answer. 

Modern food supply chains are long, complex, throughput systems. There is little to no storage of goods other than what can be packed onto the shelves or into lorries. Food literally goes off the truck onto the shelves and into the customer’s trolly.

Demands for efficiency have honed the amount of stock held by manufacturers, wholesalers, and retailers to a bare minimum. In good times, this is fine for maximising profits because the system is efficient. There is no need for expensive cold or dry storage capacity because the trucks arrived in time to replenish the shelves.

What the COVID pandemic revealed was the frailty of this just-in-time supply-chain management. 

If customers start to buy more than usual, especially bulk items such as toilet rolls or pasta, then the system stalls. When the customer sees the empty shelves they get cranky or panic and buy more when the next delivery arrives. 

Tell people to be patient under such a shortage and they tell you where to put it. 

And while the fisticuffs in the aisles rage over the last pack of toilet rolls is unpleasant and unnecessary, a more sinister effect happens with the inflationary pressures of supply chain failures.

When supply cannot meet demand prices rise.

photo by Jason Leung on Unsplash

There really is no substitute for quality spices


Alternative to just in time

One alternative to the just-in-time supply chain is just-in-case (JIC) with enough wiggle room to prevent the system from collapsing in a crisis.

Just in case inventory management keeps a store of products on-site or nearby with volume decided by knowing the probability that a product will sell out of stock. Some companies with unpredictable consumer demand or surges in demand at unpredictable times already use this approach.

This sounds glib. But to shift from just in time to just in case is more than four letters. It requires a new ethos. The focus becomes the security of supply not the efficiency of supply and they are very different objectives. 

One costs way more than the other.

Consider what it would take for a food retailer to convert its supermarkets and truck fleet from JIT to JIC.

Each store would need highly accurate and reliable information on the stock flows for all the products they offer, typically up to 30,000 items in a modern supermarket. This must take into account weekly purchasing patterns, normal seasonal fluctuations and some understanding of the size, likelihood and timing of spikes in demand. 

Assuming this evidence is available, the company then has to decide the volume buffer it will hold for each of the 30,000 items as a trade-off between the pain of customers going without and the cost of holding stock.

When these levels are decided the infrastructure and the people to manage the infrastructure change. Staffing a central distribution centre together with a fleet of vehicles is very different to keeping inventory on-site and using local staff to replenish shelves. Among many issues, local autonomy increases with greater responsibility on staff in stores rather than at HQ.

All this should sound like a shortening of the supply chain. It puts the responsibility closer to the consumer and shifts food supply toward another alternative to JIT, local supply.

Ouch, even the suggestion hurts the bottom line of the large corporations.


What sustainably FED suggests

If you have read any of the posts on this site you will guess our response to JIT. 

We don’t like it even though we understand the logic and would suggest JIT is inevitable given the way modern humans do business.

Long supply chains with minimal storage are efficient but fragile. They are vulnerable to supply shortages and demand spikes that disrupt their efficiency. The symptom of empty shelves has more than a psychological effect on the customer. Shortage, however temporary, is the harbinger of inflation.

Most of us are ignorant of the cascades set in motion by food price rises. They are global and brutal impacting the poor first and then everyone else.

JIT is not all bad. 

The efficiency lessons learned from keeping 2 billion supermarket customers happy are valuable as are the technologies that make it possible for a fleet of trucks to double up as both transport and storage systems. 

The challenge is to shorten supply chains and gain resilience. This will need a bit more JIC inventory management for key items and investment to change the system.

Supermarket shoppers will also pay more for food.

However, it will still be cheaper and likely tastier to make the butter chicken from scratch than to order takeaway.


Hero image from photo by Nick Karvounis on Unsplash

Mark

Mark is an ecology nerd who was cursed with an entrepreneurial gene and a big picture view making him a rare beast, uncomfortable in the ivory towers and the disconnected silos of the public service. Despite this he has made it through a 40+ year career as a scientist and for some unknown reason still likes to read scientific papers.

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