Literature Review

The global system of the food production, consumptions, and trends are threatened and restructured. The complex interlinked factors, including ecosystem service provisions, industry practices, climate change, and rapid changes in the customer demands are influencing this global supply chain process of producing food. According to Gardner and Colwill (2016), the geo-political volatility has the considerable impact on the value chain process due to which the risk and resilience is encountered much prominently. The literature study would focus on the conceptual analysis regarding the formulation of risk and resilience in a value chain process for the food retailers in UK. The application of the theoretical understanding would clarify the research area and present the critical discussion.

The current advancements in the technologies and business practices have enhanced the complexity level of the supply chain process. According to Scholten, Sharkey Scott and Fynes (2014), the modern supply chain process allows the goods to be produced and distributed in the right quantities within the scheduled time. The managers associated with the supply chain process strive to meet the integrated and efficient supply chain that helps the organisation to sustain the competitive position. At the end of the entire process, the managers seek the excellence, balance the downward costs, and develop the effective and efficient products supply. Manning and Soon (2016) argued that the secure and effective supply chain process depends on the better control and management process of the entire operations and developing the open information tactics. However, it is necessary for the supply chain managers to identify the probable risks emerge due to the supply chain failures. Wieland, Handfield and Durach (2016) implied that the modern supply chain procedures are influenced by the dynamic networks of the interconnected industries as well as firms. The reliable transportation facilities can mitigate such challenges, but the risk persists due to the failure of the systematic process that result poor outcome of the good production. The argument reaches at the peak when it is claimed that the complex process of supply chain is responsible for the emerging risks. However, the counter argument presented by Ambulkar, Blackhurst and Grawe (2015) indicated that the dynamic demands of the world helps in improving the business innovation process through greater supply chain management. Moreover, the value chain development even formulates the higher level of brand identity that eventually turns out to be much profitable for the business. Hence, it is essential to recognize the resilience process in a supply chain process to serve the better goods to the global consumers.

Risk and Resilience in Value Chain Management

The supply chain resilience depends on the identification of the emerging risks that may occur while managing the supply chain process at the different levels. The vulnerabilities may occur at any level in the entire supply chain process. However, the risks are apparently consisting of four different levels, such as:

• Level 1: Value/Process stream
• Level 2: Infrastructure and assets dependencies
• Level 3: Organisational and inter-organisational networks
• Level 4: The environment

Van Der Vegt et al. (2015) identified that the value stream approaches the entire supply chain process from an end-to-end and integrated method that is viewed from a management perspectives. On the contrary, the other levels introduce the source of the risks that may emerge due to the disruptions or the undermining the efforts of the supply chain managers. It creates obstacles in optimizing the effectiveness and eventually leads to the ultimate threats.

The supply chain risks are broadly shown in the micro-environmental factors that indicate the emergence of the risks from the external sources. Another probable risk can emerge from the value chain process, which generally indicates the poor functioning of the upstream or downstream partners. The next risk may occur from the operational section, which may occur due to the enabling areas of the company including the information technology, human resource, and legal aspects.

Figure 1: Supply Chain Management Risk

(Source: Heckmann, Comes and Nickel 2015)

In analyzing the emerging risks in a value chain process of food retail market, the above segregation of the risks is much important. The issues from the external market develop the understanding about the underlying obstructions that are faced by the supply chain managers. The above framework suggests that during the supply chain process, the managers may face the considerable challenges due to some of the external forces, such as climate change or the environmental effects. The mismanagement of the upstream and downstream activities can also affect the entire process in a significant way. It is thus suggested that prior to adopt a planned value chain process, it is essential to measure the probable risk as well. In the food retail sectors, such emerging risks in value chain process may become much vulnerable and affect the profitability parameter in a drastic way. The further section of the study would provide the enriched ideas about the risk resilience in the food supply chain process.

The overreaching term ‘resilience’ is defined in various ways. In fact, the concept of resilience is explained as the system ability of returning a good to the original state of condition,, preferably in a improved state. Fiksel (2015) developed the understanding regarding the key distinctions between robustness and resilience. Supporting this distinctions, Tukamuhabwa et al. (2015) implied that the robust system helps in withstanding the disturbances whereas the resilient system creates the new optimum stable state. The overwhelming priority in the food reliable consumers seeks the management of such risks despite the higher level of the disturbance. It is necessary to ensure the variable quality of the input materials and need more adaptability. In the supply chain process, the disturbances are conceptualized as the unexpected events of the adequate magnitude that drives any specific process or organisations. However, Fassam, Dani and Hills (2015) argued that the mismanagement of this sequential process may even lead to the failure of the entire supply chain process. There are three types of failure foreseen in a supply management process, such as volume, quality, and disruptions. However, Qazi, Quigley and Dickson (2015) opposed this categorization as it is implied that the risks may emerge due to the insignificant time management. Hence, the time scheduling is another major part of this categorization. On the other hand, Wang et al. (2016) proposed that these failure modes ultimately could be grouped as the shortage of raw materials, scarcity of the labors, or any undelivered works. The failure modes in this process are measured as the major deviation from the KPI set for any particular supply chain process. The uncertainties and the disruption from the external sources can create the real harm to the consumers.

Emerging Risks to the Global Food Supply Chain Process

It has been observed that the food supply chain process faces a number of disruptions and challenges that require resilience integration into the day to day operations. The complete understanding of the risk vulnerabilities can help an organisation to develop the enriched knowledge of the resilience process. In addition to this, as suggested by Kirwan, Maye and Brunori (2017), the clear conceptualized idea of the key performance indicators for a particular food supply chain process would also help in developing a complete resilience process in a significant manner. The following framework is developed to understand the risk resilience process:

Figure 2: Risk Resilience

(Source: Soosay and Hyland 2015)

According to ShakirUllah, Huaccho Huatuco and Burgess (2014), vulnerability is defined as the fundamental factor that makes an organisation quite skeptical about the occurrence of any particular disruption. The extent of vulnerability can be classified into two groups, such as external and internal group. The internal vulnerability suggests the mismanagement supply chain operations whereas the external vulnerability refers to the external forces that disrupt the entire process. It is to be indicated that the some of the external vulnerabilities can be controlled to some extent. For example, the risks emerge due to the financial or societal factors can be managed by making the necessary adjustments. However, other vulnerabilities identified in the external environment, such as climate change, cannot be controlled by any mean. On the contrary, the internal vulnerability is somewhat controllable since it involves the modifications of the operational process. In the food retail sector, the external vulnerabilities are suggesting the effects emerge from financial market, infrastructural discrepancies, legal, societal, or environmental segments. On the other side, the internal vulnerabilities are categorized into four segments, such as logistic control, physical resources, intra organisational structure, and information system. The measurement of the vulnerability level helps in identifying the feasible resilience process that can mitigate the risks and develop the better food supply chain process in UK.

Manners-Bell (2017) defined that when the process capabilities maintains a good balance while controlling the vulnerabilities, a system becomes resilient. However, Parenreng et al. (2016) argued that capabilities are often conceptualized as an attribute that enables the anticipation of an enterprise and overcomes the emerging disruptions. The extensive research on the capabilities indicates that it should be judged from the management perspectives. Developing a comprehensive list for the process capabilities is necessary to prepare a resilient plan and mitigating the risks in a supply chain process. However, it has been observed that in some of the cases, the capabilities are not organized in a systematic order. However, the significance depends on the unique vulnerabilities of an individual.

Supply Chain Resilience

The next segment of resilience is concentration, which depicts the physical distribution of the core components of supply chain management. The resilience would be limited if the supply chain facilities were more dispersed. However, as opined by Kendall et al. (2018), the presence of bottlenecks is the key theme for a system resilience. It is informed that the vulnerability would be high if the dispersed suppliers of raw materials would depend on a single transport hub.

According to Aqlan and Lam (2015), the adaptability refers to the organisational ability to make modifications in the operational process to provide the optimum responses to an opportunity or any disruption. During the process of food supply chain, this adaptability is classified into two major segments, such as flexibility in fulfilling the order and flexibility in product sourcing. Such categorization is important due to its control in managing closures that are quite common to other supply chain management process. It is notable that the flexibility in fulfilling the order is concerned with the abilities that can change the output. Product distribution channel is one of those key components that is utilized in the supply chain process. It determines the purchase of the spare capacity during the emergency situations. This process sometimes even involves the practical challenges, such as the overlapped redundancy and re-packaging process of the products. However, many of the companies are able to expand the market position to deal with such uncertainties.

Redundancy concerns with the capacity of the raw material stores, power generations, availability of spare, and transport and IT system. The redundancy factor is compared to the classical strategy that provides quick responses to the emerging uncertainties. It generally constitutes a significant amount of costs if not required as a part of everyday operations. However, Tapiola and Paloviita (2015) implied that the requirements of the food shelf life often limit the potential usefulness of this method.

The efficiency factor generally includes the specific factors like operational efficiency, resource efficiency, and ethos. This factor helps in saving the day to day operational money. In fact, it offers the more advantages during the crisis time. The process ensures the development of the ‘surge’ production to meet the market opportunity. On the contrary, it has been observed that a strong ethos is not the only responsible factor for identifying the new and innovative markets. During the crisis, this redundancy aspect becomes the deciding factor of increasing challenges.

Key Performance Indicators for Food Supply Chain Processes

The risk and resilience in the food supply chain includes the description of visibility, need for increased collaborations, and information sharing. These aspects together form the group that falls under the label of awareness. It can be ranged from the strategic scale, in terms of legislations and consumer demands, relevant policy, and the information about the supply chain partners. It widely focuses on the entire operational status to measure the progress. The awareness created through accessing the relevant data.

When the organisation possesses the ability to prepare or discern for the potential future scenarios, it refers as the anticipation. It requires the real time monitoring and the utilization of the historical data. It also depends on the judgments and models that forecast the demand. The occurrence of the disruptions exceeds the operating parameters. It is evident that the Business Continuity Planning helps in developing the most comprehensive form if emergency preparedness for deriving active responses. However, it is stated that the complexity and the perceived costs has the limited widespread implementation. Therefore, it can be implied that the awareness factor determines the information about the products of the competitors and the product substitutes. It also provides the information about the more positive and important aspect of anticipation.

Market awareness includes the organisational strength and the improved brand images for managing customer relation. The strengthened form of the brand reputation can compel the customer to wait for search different brands elsewhere. Providing the substitute opportunities would help in maintaining the effective customer relations (Aqlan and Lam, 2015). This strategy is quite effective in encouraging the information exchange with the consumers.  

Security of a system involves the protection from disruptions. Product adulteration, supply chain security, and damage to brand image. This security does not always deliberate in intent-good physical restrictions, especially in the restricted areas (Manners-Bell, 2017). Protecting the vital data prevents the accidental damage as well. The security has the clear connection with the awareness and it is coordinated with the regional and national government.

Financial readiness is considered as the measurement of the ability of the organisation for absorbing the irregularities in outgoings and incomes (ShakirUllah, Huaccho Huatuco and Burgess, 2014). The availability of diverse asset structure and the financial insurance to offset risks are much necessary. The evidence highlights the products with high profit margins that can be recovered from the disruptions.

Conclusion

The literature study provides the insightful knowledge about the probable risks and the resilience in the value chain process of UK retail industry. It describes that the modern supply chain process allows the goods to be produced and distributed in the right quantities within the scheduled time. The managers associated with the supply chain process strive to meet the integrated and efficient supply chain that helps the organisation to sustain the competitive position. The overwhelming priority in the food reliable consumers seeks the management of such risks despite the higher level of the disturbance. It is necessary to ensure the variable quality of the input materials and need more adaptability. The complete understanding of the risk vulnerabilities can help an organisation to develop the enriched knowledge of the resilience process. The uncertainties and the disruption from the external sources can create the real harm to the consumers.

Areas of Risk and Resilience in Food Retailing Improvement

References

Ambulkar, S., Blackhurst, J. and Grawe, S., 2015. Firm’s resilience to supply chain disruptions: Scale development and empirical examination. Journal of Operations Management, 33, pp.111-122.

Aqlan, F. and Lam, S.S., 2015. Supply chain risk modelling and mitigation. International Journal of Production Research, 53(18), pp.5640-5656.

Fassam, L., Dani, S. and Hills, M., 2015. Supply chain food crime & fraud: a systematic literature review of food criminality.

Fiksel, J., 2015. From risk to resilience. In Resilient by Design(pp. 19-34). Island Press, Washington, DC.

Gardner, L. and Colwill, J., 2016, August. A decision support tool for improving value chain resilience to critical materials in manufacturing. In Advances in Manufacturing Technology XXX: Proceedings of the 14th International Conference on Manufacturing Research, Incorporating the 31st National Conference on Manufacturing Research, September 6–8, 2016, Loughborough University, UK (Vol. 3, p. 363). IOS Press.

Heckmann, I., Comes, T. and Nickel, S., 2015. A critical review on supply chain risk–Definition, measure and modeling. Omega, 52, pp.119-132.

Kendall, H., Kaptan, G., Stewart, G., Grainger, M., Kuznesof, S., Naughton, P., Hubbard, C., Raley, M., Marvin, H. and Frewer, L.J., 2018. Drivers of existing and emerging food safety risks: Expert opinion regarding multiple impacts. Food Control.

Kirwan, J., Maye, D. and Brunori, G., 2017. Acknowledging complexity in food supply chains when assessing their performance and sustainability. Journal of Rural Studies, 52, pp.21-32.

Manners-Bell, J., 2017. Supply Chain Risk Management: Understanding Emerging Threats to Global Supply Chains. Kogan Page Publishers.

Manning, L. and Soon, J.M., 2016. Building strategic resilience in the food supply chain. British Food Journal, 118(6), pp.1477-1493.

Parenreng, S.M., Pujawan, N., Karningsih, P.D. and Engelseth, P., 2016. Mitigating risk in the tuna supply through traceability system development. International Food and Agribusiness Management Review, 19(1), pp.1-24.

Qazi, A., Quigley, J. and Dickson, A., 2015, March. Supply Chain Risk Management: Systematic literature review and a conceptual framework for capturing interdependencies between risks. In Industrial Engineering and Operations Management (IEOM), 2015 International Conference on (pp. 1-13).

Scholten, K., Sharkey Scott, P. and Fynes, B., 2014. Mitigation processes–antecedents for building supply chain resilience. Supply Chain Management: An International Journal, 19(2), pp.211-228.

ShakirUllah, G., Huaccho Huatuco, L.D. and Burgess, T.F., 2014, April. A literature review of disruption and sustainability in supply chains. In KES Transactions on Sustainable Design and Manufacturing, Special Edition-Sustainable Design and Manufacturing 2014 (pp. 500-512). KES International.

Soosay, C.A. and Hyland, P., 2015. A decade of supply chain collaboration and directions for future research. Supply Chain Management: An International Journal, 20(6), pp.613-630.

Tapiola, T. and Paloviita, A., 2015. Building resilient food supply chains for the future. Climate change adaptation and food Supply Chain management. Routledge, London, pp.30-42.

Tukamuhabwa, B.R., Stevenson, M., Busby, J. and Zorzini, M., 2015. Supply chain resilience: definition, review and theoretical foundations for further study. International Journal of Production Research, 53(18), pp.5592-5623.

Van Der Vegt, G.S., Essens, P., Wahlström, M. and George, G., 2015. Managing risk and resilience. Academy of Management Journal, 58(4), pp.971-980.

Wang, J., Muddada, R.R., Wang, H., Ding, J., Lin, Y., Liu, C. and Zhang, W., 2016. Toward a resilient holistic supply chain network system: Concept, review and future direction. IEEE Systems Journal, 10(2), pp.410-421.

Wieland, A., Handfield, R.B. and Durach, C.F., 2016. Mapping the landscape of future research themes in supply chain management. Journal of Business Logistics, 37(3), pp.205-212.