How to avoid Black Swan Events?
A black swan event is defined as an unpredictable or unforeseen incident. In his book of the same title The Black Swan, Nassim Nicholas Taleb defines the criteria for a black swan event, incuding:
The event is a surprise.
The event has a major effect.
After the first recorded instance of the event, it is rationalised by hindsight, as if it could have been expected; that is, the relevant data were available but unaccounted for in risk-mitigation programs.
Have you ever experienced black swan events in your food supply chain? Was your quality or food safety performance severely impacted as a result? Were data available but overlooked and not taken into account to develop and implement robust risk mitigation programs?
My experience demonstrates that using an end-to-end approach to identify the areas of vulnerability in your food supply chain is a key part of the solution.
Globalisation has changed the way food is sourced, produced, transported and consumed.
For years, globalisation and international trade have presented food business operators with challenges to food safety and quality. In today’s age of globalisation and ever-increasing consumer awareness, food safety and quality programs are increasingly focusing on a farm-to-table approach as a way of reducing hazards entering the food chain. For food business organisations, one of the most important challenges may be implementing an effective quality and food safety management system and ensuring that others in their supply chain do so too.
By taking an end-to-end system approach, where each stage of food production is treated as part of a larger system of inputs, outputs and processes, foods can be more readily tracked from their source at the farm all the way through processing, distribution and consumption. From a food safety perspective, this can greatly facilitate identification and preventive management of potential contamination, and tracking the sources of food-borne illnesses when they emerge.
Food safety is only as strong as the weakest link of the supply chain.
This was always true and will remain so in the future. Over the last years, several organisations learned the hard way and implemented robust and comprehensive programs as a result. Understanding that communication between players at different stages is critical to success, organisations collaborate proactively more than ever in an end-to-end approach in order to identify the areas of vulnerability in their supply chain and mitigate risks.
Some years ago, I lived and worked in China on a successful long-term project. The purpose was to take a systematic end-to-end approach to evaluating the vulnerabilities in the food supply chain, to mitigate risks and develop capabilities through the design and deployment of comprehensive learning and development programs.
The key elements and achievements in the delivery of the project were:
The evaluation of the food safety capability needs, through the assessment of direct suppliers, as well as tier 2 and 3 suppliers.
Creating awareness and communication between different steps in the supply chain about the impact each has on the other, and facilitating clearer transfers of information between them.
Partnering with key suppliers, customers, academia and external organisations for the design and delivery of training materials and programs where needed.
The training of representatives from all steps of the supply chain and ensuring the sustainability of the efforts through easy availability of training materials.
The acquired experience has been shared widely within the food industry, as food safety is not a competitive advantage, and has been replicated many times since then.
Are you interested in improving your supply chain robustness to avoid black swan events?
If you want to identify your areas of vulnerability before black swan events happen, we can help by using our practical and international experience acquired in end-to-end food supply chain assessment. We help by evaluating your current approach and roadmap, so that growth- and protection-related opportunities are identified and implemented with sustainable, tangible results.