Shorter Supply Chains Survive Fallout Of Natural Disaster

By John Vinson
Expert Author
Article Date: 2010-05-28

Although the volcano eruption which grounded many planes a few weeks ago didn't occur in the US, doesn't mean a lesson can't be learned from the events. The volcano eruption which brought travel to a halt is still being assessed, and the dollar amount of lost revenue is being tallied. One industry who took a huge hit was the food and drink sector. Mainly, because goods they ship are on a deadline and for as long as the planes were grounded in Europe, all kinds of money was lost.

One company who felt the effects of the grounding was fish processor, Andrew Charles. A bulk shipment of salmon which had been recently processed wasn't allowed to be shipped stateside. For every hour, and day, the fish was losing value. Workers were sent home because no more fish could be processed. Eventually, the fish was frozen and shipped off at a reduced cost.

Charles said this of the situation, "Our industry is facing enough pressure as it is, through a lack of government support and the high price of fish, so for something like this to come along isn't very helpful. I know there has been criticism of the decision to ground flights, so I hope it turns out to have been necessary."

While there were many businesses who were hit hard by the volcano, a few exceptions weathered the storm with ease. Waitrose is a supermarket chain in the UK, who received relatively minor damage from the grounding.

A spokesperson for Waitrose said this about the situation, "Waitrose experienced minimal disruption during the volcanic eruption as we source produce from this country wherever possible. The timing of the eruption coincided with many of our ranges coming into the British season so we had good availability across our fresh produce range."

"We work closely with our suppliers which helps us to react quickly to possible delays in the supply chain."

Of course it's easy to say "shorten the supply chain", but going through with it is an entirely different matter. When it's so much more cost effective to have your suppliers come from another country, or region, it's hard to pass up on the deal. However, is the savings of cost worth the gamble of another situation like in Europe?

For the food industry, it's of even greater performance as people rely on their market goods to eat and drink. One wonders and hopes that incentives can be given for relying on more local supply chains. Or at the very least, prepare for the effects of longer tailed supply chains becoming disrupted.

About the Author:
John is a staff writer for WebProNews.