Hot off the press–UK rations peppers amid global disruptions

Global supply chain disruptions have appeared in many guises, from geopolitical uncertainty, economic decline and supply shortages. 

There are many contexts in which the term 'holistic' is almost malapropos, but procurement and supply chains are not one of them since the relationship between wider geopolitical occurrences such as the pandemic, war, inflation, the energy crisis and procurement, is both reflexive and circuitous. 

Now, supermarkets in the UK are experiencing a new wave of vegetable shortages, with some stores having to limit the sale of peppers to customers. The issue is believed to be caused by unseasonably cold weather in Spain, which has led to slower growth rates for peppers.

Weather conditions impacting supplies need to be prepared for, since surprisingly, weather is a global event - or more precisely, a maelstrom of events.

Production problems also began in Morocco in January for example. with unusually cold temperatures affecting tomato ripening.

In response to the shortages affecting the UK, Morrisons has announced that it is limiting customers to two packs of peppers each, while Waitrose has run out of stock of many varieties online.

As of now, Waitrose.com only has its "Essential" green peppers available, with red, orange, and yellow ones all sold out online.

UK farmers have been warning of stock shortages for the last few months due to their concerns about being paid fairly for their produce.

Andrew Opie, director of food and sustainability at the British Retail Consortium, has confirmed that "difficult weather conditions in the South of Europe disrupted harvest for some fruit and vegetables including peppers."

As retailers struggle to keep up with customer demand, Greg Hanson, VP, EMEA & LATAM at Informatica, leaned on his expertise to express that retailers can manage their supply chain and prevent shortages to meet customer demand.

"Rationing is the best way to manage the immediate in-store supply and demand," Hanson explains. "Finding alternative produce to stock the shelves will require retailers to pick through all the elements of their supply chain. And that requires up-to-the-second insight into supplier movements, product availability, and shipping routes."

Hanson emphasises the importance of accurate and up-to-date information on suppliers, products, materials, and customer demand for supply chain performance. "Keeping shelves stocked high relies on trusted data," he says. "As attention now shifts to how quickly supermarkets and retailers can resolve the shortage, this is more important than ever."

Hanson believes that supermarkets need to have a single 360 view of all their supplier profiles to navigate turbulence. "The ability to visualise and understand strategic supplier relationships will be crucial to identifying alternative suppliers and getting the right products to the right places within a matter of weeks," he adds.

In the long term, Hanson suggests that building more resilience into global supply chains will be key to preventing future product shortages.

"In an era where disruption is ongoing, supermarkets and retailers need to be able to identify dependencies and potential sources of disruption before they even happen," he explains. "Only then can they proactively manage supply chain challenges and prevent product shortages to meet customer demand. AI-powered cloud data management and governance provides the visibility retailers need to keep our shelves stocked."

Procurement's available solutions

Procurement functions can help prevent product shortages by working closely with suppliers to monitor and manage supply chain risks. By leveraging advanced analytics and real-time data, procurement professionals can gain greater visibility into supplier performance, identify potential disruptions, and take proactive steps to mitigate these risks.

Procurement teams can also help retailers identify alternative suppliers and develop contingency plans to ensure product availability during times of disruption. By building strong relationships with suppliers and developing a deep understanding of their capabilities and capacities, procurement can help retailers navigate turbulence and keep shelves stocked with the products customers want and need.

McKinsey on what CPOs can do to navigate disruptions

Mckinsey recently released a report putting forward 10 actions that Chief Procurement Officers can take to overcome the toughest procurement challenges in 2023.

According to the article, procurement leaders are already disappointed as the volatility and inflation of the previous year showed no signs of abating. The procurement function itself continues to face major changes that have made its traditional operating models obsolete. Front-running procurement organisations are increasingly distancing themselves from the rest of the pack, deploying their talent, capabilities, technology, and insights into the world’s complexity in ways that propel them far ahead of the rest of the pack.

Mckinsey’s proposed ten core actions: ‘A resilience toolbox’

To combat volatility, inflation, and shortages and build resilience, procurement leaders can take ten core actions.

The first step is to gain transparency into the pressures they face. With this visibility, they can create value across the supply base. To achieve this, they should mobilise other parts of the business, including the supply chain, operations, and commercial capabilities. Supporting these efforts, a central nerve centre or control tower, and new capabilities are necessary.

To succeed, procurement leaders need to build an agile procurement function with stronger links to both internal and external partners.

You can read the full breakdown of the McKinsey report here. 

An ounce of prevention is worth a pound of cure

While the immediate response to shortages has been rationing, there is a need for long-term solutions to build resilience into global supply chains.

Procurement functions can play a key role in mitigating risks and developing contingency plans to ensure product availability during times of disruption.

Advanced analytics, real-time data, and stronger links with internal and external partners can help build agile procurement functions that can navigate turbulence and keep shelves stocked.

As we look to the future, it is essential for retailers and procurement professionals to embrace the need for greater transparency, agility, and resilience to tackle the toughest procurement challenges in the years ahead.