Managing the Complexities in Food Supply Chains in Asia

 

L-R: Dr Siti N. Abdul Malek, Food Industry Asia; Mr Dean Nikora, AsureQuality; Mr Bruce Blakeman, Cargill; and Mr B.C. Tan, Thomson Reuters

Risks in Asia's food supply chain continue to have an impact on food and beverage operators in the region, said a panel of experts at the third FIA Lunch Series event, held in collaboration with Thomson Reuters.

Panellists Mr B.C. Tan, Head of Client and Third Party Risk for Asia Pacific at Thomson Reuters; Mr Bruce Blakeman, Vice President for Corporate Affairs in Asia Pacific at Cargill; and Mr Dean Nikora, Group Director of the Global Food Trust Alliance at AsureQuality, said that there were still a number of instances where supply chain issues have led to business and reputational damage.

The panel was moderated by Dr Siti N. Abdul Malek, Head of Scientific and Regulatory Affairs at Food Industry Asia (FIA), who shared that the association itself was established as a result of a supply chain issue – the melamine contamination crisis that began in China in 2008.

Mr Tan talked about risks from a macro level, based on the work done by Thomson Reuters in identifying and helping clients work through third party risks (sanctions), sustainable sourcing, bribery and corruption. He touched on slavery and forced labour, citing the example of the Thai prawn trawler slavery case as a third party risk.

“The case has shown that a company, however far removed from the incident, could still be held liable. It is expected, in the next one to two years, that a number of sanctions and regulations around these issues will be introduced,” Mr Tan added.

Geography and sustainability are the two most important concepts in supply chain management, shared Mr Blakeman.

“In Asia Pacific, the culture of food safety is still not very strong, nor does it have deep roots. It is something that we have to deal with on a day-to-day basis,” said Mr Blakeman, who added that it is a challenge for small food manufacturers, in their supply chains, to continue to grow and improve their food safety standards.

Mr Blakeman added that there were a range of other complexities in Asia’s food supply chains. He highlighted different countries in Asia that have different levels of food safety regimes; poorly thought-out policies and domestic protection of a particular industry that can negatively affect trade flows; infrastructure problems such as gridlocks in ports; and lack of laboratories, testing facilities and cold storage issues as some challenges that impact the food supply chain.

“In addition, environmental issues such as deforestation have become a mantra for a lot of non-governmental organisations (NGOs) around the world,” said Mr Blakeman, noting that customers and NGOs now expect companies to know the happenings at every part of the supply chain, and will hold the latter responsible and accountable.

“This expectation makes operations a whole lot riskier and more expensive, but that accountability is something that is going to be demanded from all of us as we move forward,” he said.

 
Mr Nikora shared and discussed the available tools that companies can use in order to mitigate the aforementioned risks.

“One of the real challenges we see in Asia is a highly fragmented industry, lack of profitability in the supply chain, and the lack of capacity and capability among companies to deal with problems and consumer miscommunication,” he said.

Mr Nikora outlined several commonly available tools that when used on a daily basis, he said, could help boost a good safety culture. For one, risk management matrices with sound information and data points are useful when companies have the ability to use them to make decisions and judgment calls to drive real strategic outcomes.


The discussions, on a whole, pointed to the reality that the push for sustainability across supply chains will not be going away. For the food industry in particular, the different pressures across supply chains point to a future where everything is traceable, certifiable and sustainable. In this era of globalisation, the society and individuals have a lot more say in how regulations are shaped. Even so, the direction in which the industry is headed in looks very positive. Addressing issues of trafficking, human rights and corruption are not necessarily only good for business or revenue-generation, but are also tied to a long-term view of sustainability.

Transparency, partnership and actively seeking knowledge are the ways to move forward and overcome the complexities in the food supply chain – not only in Asia, but across the rest of the world as well.
 

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