According to the surveys conducted by AMR Research, supply chain executives claim that the most challenging risk in managing their supply chains belongs to supply risks. The survey is primarily dominated by manufacturing and retail executives, and in these industries, there is always a third-party manufacturer with ample capacity.
Supply risk is a significantly bigger challenge for agricultural businesses. This is because, agricultural crops are grown in specific geographical areas. The same weather conditions and diseases impact all growers located in one region. Thus, when one farm land is influenced, other farmers in the same region are impacted as well. As a result, an alternative third party may not exist in the event of supply disruptions, or if it does, the crop supply can be more expensive than anticipated. For these reasons, I find supply risks in agricultural industries to be more challenging, and fascinating, than those in the repetitive manufacturing environments.
In the attached pages, I present my views on several agricultural supply risks.