Have you tried to buy a pack of frozen chips recently, but were met by an empty frozen chip aisle? You and many Australians are experiencing the effect of a nationwide potato shortage.
News of a national potato chip shortage hit social media in October last year. Flooding and persistent rain across Australia reduced the productivity of potato producers, causing scarcity of frozen chips. The effect of this supply chain interruption can still be seen in supermarkets across Australia three months later.
The shortage of frozen chips highlights the importance of having a diverse and resilient supply chain according to UNSW Canberra Decision Support and Analytics Research Group lead, Dr Ripon Chakrabortty.
“The scarcity emphasises the necessity of early identification and resolution of any emerging difficulties between producers, distributors, and retailers, as well as efficient and effective coordination and communication between all parties involved in the supply chain,” Dr Chakrabortty said.
Fortunately, there are ways to create ‘resilient’ supply chains that ensure disruptions like the potato shortage do not affect customers in their day-to-day grocery shopping.
The good news is that supply chains eventually recover. That is, you will see frozen chips return to your local supermarkets – it will just take some time.
“The length of time the Australian potato shortage will affect grocery store shelves is difficult to predict because it depends on a number of variables, including the severity of the shortage, growers' capacity to ramp up production quickly, and the effectiveness of the supply chain in moving potatoes from the farm to store shelves,” Dr Chakrabortty said.
While the problem may persist for some time, relief is in sight.
“Businesses must have backup plans in place for unanticipated supply chain interruptions,” Dr Chakrabortty said.
According to Dr Chakrabortty, Australia heavily relies on a few groups of potato farmers and distributors. As a result, failures at any stage of the supply chain emerge quickly as severe shortages – the impact we are currently experiencing as potato scarcity in our supermarkets.
A robust approach to avoiding such shortages is to incorporate a ‘resilient’ supply chain.
“A resilient supply chain can swiftly adjust and recover from interruptions, whether internal problems like equipment malfunctions or external events like natural disasters or pandemics bring them on.”
Dr Chakrabortty highlights seven types of infrastructure that can be implemented in Australia to build resilient supply chains that could help with preventing future potato disruptions:
While any resource shortage is undesirable, the potato shortage has taught us that supply chains require resilience.
“Overall, strengthening a supply chain's resilience necessitates a complete strategy-heavy approach; therefore, it's critical to have a long-term, holistic viewpoint.”
Another approach to preventing disruptions is to quite literally predict future supply chain problems.
In our era of digitalisation, conventional supply chain networks are mostly digitalised.
“The best tool to forecast supply chain problems are machine learning models and statistical tools for advanced data analysis.
“Companies might find patterns and trends in past data by training a machine learning model that can point to a possible supply chain issue. This can assist businesses in foreseeing and averting upcoming disturbances,” Dr Chakrabortty said.
It is important to note that one limitation is the accessibility of historical data to base future predictions on. With climate change affecting a number of grocery networks in recent years, it is more important than ever to ensure the industry can predict future disruptions.
January 8, 2023
“By successfully implementing the tools and techniques to forecast future supply chain events and ensuring the correct infrastructure and planning is in place, a complex and multi-tier supply chain can be made resilient,” he said.
Implementing resilient supply chains and forecasting disruptions will prevent severe resource shortages in the future – in this instance, potatoes. We can then return to enjoying our Australian hot chip treats, rather than concerning ourselves with when we might next get our hands on a pack of frozen chips.