Refer to the attachment uploaded.
1.(Nicholas) Food distribution chains face many risks including nature, political shifts, market shifts, and problems with internal operations including staffing, storage, and information systems (Olson, 2020, pg. 7). One of the main problems with food supply chains is keeping safety stock because inventory will expire making flexibility in shifting markets difficult (Olson, 2020, pg. 9-11). Block Chain technologies are systems that place data into ‘blocks’ based on which applications and thus which stage in the process data is occurring (D. Sathya, 2021). Rather than the different stages in the food growing, shipping, processing, shipping, and final destination being separate and centralized to each stage, block chain enterprises can connect the various companies that are responsible for each stage. This connecting of each stakeholder helps manage inventory and ensure food safety, reducing liability, and increasing productivity rather than each stakeholder having to take the word of the other stake holders because bad product can be traced to the source of the problem, and caught before it reaches consumers (D. Sathya, 2021). This also ensures stakeholders later in the food distribution process know about any market shifts in advance and can plan accordingly.
D. Sathya, S. Nithyaroopa, D. Jagadeesan and I. J. Jacob, “Block-chain Technology for Food supply chains,” 2021 Third International Conference on Intelligent Communication Technologies and Virtual Mobile Networks (ICICV), 2021, pp. 212-219, doi: 10.1109/ICICV50876.2021.9388478.
Olson, D. L., & Wu, D. (2020). Enterprise Risk Management Models (Springer Texts in Business and Economics) (3rd ed. 2020 ed.). Springer.
2. (Smith)Agriculture is the backbone of an evolving society. In fact, advances in chemical fertilizers provided the food efficiency necessary to support a rapidly expanding population (Bailey, 2018). It’s estimated that these advances are directly responsible for the lives of billions. Therefore, analyzing risks and potential downfalls in the supply chain of agriculture is integral to its current success and population thrive.
Risk Categories and Risks
Agriculture is subject to many risks, far more than many other industries. Primary risk categories for the industry include financial, operational, and compliance (Hunziker, 2019). In addition, significant impacts can come from risk subcategories, such as supply-demand, logistics, regulation, and environmental (Sharma et al., 2020). For example, seasonal droughts, storms, and temperature fluctuations are uncontrollable and significantly affect crop yields. The fluctuating labor market also impacts agriculture (i.e., how many people are willing to work in the industry, current salary expectations, etc.).
Mitigation Strategies
Though highly prevalent, many of these risks can be reduced through alleviation strategies. For instance, crop and livestock diversification decreases risk through distribution (e.g., using half of the farmable land for kale and the other half for swiss chard reduces the risk of using all of it for one crop). Contracts are also helpful since they set price and delivery expectations in advance, regardless of market conditions. However, as with anything, this mitigation might come at the cost of more significant profit gains should one of the crops increase in popularity. Additionally, insurances such as crop revenue or yield provide payments should either incur a considerable decline (USDA ERS – Risk Management Strategies, n.d.).
Technology and Service Aid
Artificial Intelligence is an incredibly promising technological asset to agriculture. AI can help experts identify areas of pest infestation, soil degradation, poor drainage, and opportunities for new crops (Das et al., 2018). In addition, this augmented data analysis could allow farmers to avoid supply-demand pitfalls and low crop yields through greenhouse automation (Smith, 2018).
Risk Matrix for Almond Milk
