Two food logistics data scientists, Duke alumnus Elliott Wolf and Daniel Wintz, joined professors Giovanni Zanalda, Gary Gereffi and Lori Leachman for a discussion on the working of food supply chains and their resilience during the COVID-19 crisis. They noted that COVID-19 and its associated increase in food purchases are not unlike a typical uptick seen around major holidays.
Food supply chains are characterized by underlying resilience and large reserves, which has allowed U.S. and EU grocery stores to be well stocked with food. They also drew important lessons for the retooling and restructuring of global supply chains including medical supplies and personal protective equipment.
This event is the second in a series of webinars on the impact of COVID-19 on global supply chains organized by the DUCIGS/Rethinking Diplomacy Program. For a summary and video of the first event follow this link.
Here are excerpts:
RESILIENCY IN THE FOOD SUPPLY CHAIN
Daniel Wintz, principal data scientist at Lineage Logistics
“There’s a resiliency built into the food supply chain that we’re forced to do by virtue of bacteria on its own. Bacteria wants to eat our food and it spoils, and so things are a bit more efficient, so to speak. We really have only a few days to get it to the grocery store and then they have a few days to sell it. Whereas face masks -- the part that expires on the mask is the elastic band after eight years. We’re kind of forced to be this good.”
Elliott Wolf, vice president and chief data scientist of Lineage Logistics
“First, there’s lots and lots and lots of sources. We have very efficient commodity markets that allow you to backfill from all over the world. And then lastly, we have lots and lots of inventory actually in physical storage in the United States. And so that’s why you’ve been able to get cauliflower and fish but perhaps not toilet paper.”
“The statistics of rare events is difficult. And it’s almost kind of clear that resiliency is a way to deal with these rare events and doing that expected value calculation for the supply chain. It appears that a lot of companies haven’t done that all the way right."
FOOD SUPPLY CHAIN RESILIENCY VS. OTHER
“Toilet paper has become, in the mind of the American consumer, the emblem of supply chain failures.”
“I'm proud of the fact that of all of the supply chains implicated in this, whether personal protective equipment, medical devices, pharmaceuticals, dry food, the only one that really didn't fall down was perishable food. Carrots are available. Meat is still broadly available.”
“In reality we’ve been trained. The system has trained us to not rely on the availability of this stuff. The system has trained us and history has trained us. The history of humanity is in very large measure the history of agricultural disruptions. And now the system is dealing with things that the rest of the economy is shocked to learn are a factor. That’s got to change everyone else’s outlook on this. I hope it does because the fact that the U.S. ran out of masks is really frightening.”
COVID’S IMPACT ON SUPPLY CHAINS
“Mother Nature provides a lot of random independent events that are ‘one-offs,’ so to speak. And COVID for us has almost kind of just been another one of these.
“This demand spike at our biggest facilities was just kind of a small Thanksgiving in terms of product we need to ship out. So this quote-unquote panic buying was almost less than Thanksgiving, so to speak, which I find kind of interesting because it’s been in the news everywhere. Stores are out of toilet paper. There’s people hoarding stuff left and right and it’s kind of fascinating."
“I myself did not anticipate it would have this big of an impact on the domestic supply chain. But to the extent the federal government knew about it in January and February, that information would have been helpful to start setting all of this up in anticipation of that.”
ON CHANGES IN PURCHASING DURING COVID
“Meatpackers are relatively struggling, and fruits and vegetables -- they’re coming in, they’re going out relatively unfazed, which honestly I found surprising at the beginning of the panic buying COVID period. You’d expect the fruits and vegetables to be the things that ran out at the store but that supply chain is just kind of functioning. What’s out is baking powder and flour and pasta and rice and beans. They make some sense because they’re non-perishable, but I just found that surprising.”
ON FOOD LOSSES DURING COVID-19
“What’s been happening in the fields is tragic. Perfectly good produce is getting plowed back into the fields. But for the food industry, it’s not unprecedented. Whether it was taken out by a lack of restaurant demand or taken out via some bad weather event. The food industry is still resilient against stuff getting taken out. This just has a much more emotional element because it seems perfectly good.”
“It’s sad, but the way we look at it is it’s as if El Niño rains wiped out a slug of the Southern California fruit harvest. It’s sad, but it’s not unprecedented.”
ON THE PANDEMIC ACCELERATING THE ROBOTIZATION PROCESS
“I think we are starting to change our automation strategy to go towards stuff that would be difficult to socially distance. To do automation purely for the purposes of safety even if it’s economically irrational."
“One of the reasons why it’s so labor-intensive right now is that there’s 50,000 items available in your nominal supermarket and that number is only growing. And that variety makes it really hard to automate right now. So I could see the two working together, where you have kind of a strategic pull back on variety, coupled with an increase in automation.”
Meet the Experts:
Elliott Wolf is vice president and chief data scientist of Lineage Logistics, the largest temperature-controlled warehouse owner and operator in the world, with 293 facilities across six countries. The Lineage data science team is responsible for the mathematics, statistics, computer science, physics and R&D underlying storage, shipment and routing of food, as well as the siting, design and operation of Lineage’s warehouses.
Daniel Wintz is a principal data scientist at Lineage Logistics. He heads all efforts related to labor, automation and inventory. Wintz and his algorithms are the air traffic controllers of inventory and labor across the food supply chain.
Gary Gereffi is an emeritus professor of sociology and director of the Global Value Chains Center at Duke University.
Lori Leachman is a professor of economics at Duke University.
Giovanni Zanalda is a Duke faculty member and director of the Duke University Center for International & Global Studies
(Wintz and Wolf’s remarks were their own and do not represent the views of Lineage Logistics.)