Issue 4 Archives - Page 2 of 3

Handoffs: Bills of Lading and the Cargo Custody Relay

by Cory Leahy | Jun 22, 2018 | Feature, Issue 4, Stories

We’re hearing more and more about high-tech ways to track and trace our food as it moves through the supply chain to our plates — from barcodes to blockchains. But the practice of tracking food shipments isn’t new. It has long been a way for shippers to make sure their cargo is safe and secure throughout its voyage.

At each step along the supply chain, anyone who handles a shipment has custody, a specific term that connotes legal responsibility. The chain of custody confirms the identity and quantity of the shipment (e.g., 400 bushels of Italian pears), declares that the pears were continuously controlled and transported by the carrier and identifies everyone who handled the pears throughout the shipment. Having a clear record of this chain makes it possible for the shipper to track any theft or contamination of the cargo on its way to the receiver.

The documentation that authenticates the movement of food between a shipper and a freight carrier is known as a bill of lading. It’s a receipt that confirms the transition of goods from one link in the chain to the next. This document notes the details of the cargo and its intended path to you, including the type and quantity of a shipment. It’s provided at the end of a shipment to verify delivery of the goods shipped and is the basis for payment for the goods at the receiving end of a shipment. Without these bills of lading, neither the farmer nor the exporter gets paid.

Going back to maritime practices — before planes, trains and automobiles got involved — the bill of lading would have been prepared by a merchant to indicate that the shipper was responsible for delivering the items consigned to him. These receipts were originally called “bills of loading” as far back as the Middle Ages, and they listed what a merchant actually loaded onto a ship. It was a sort of contract between a merchant and a shipper that confirmed the receipt and safe transport of a specific cargo list.

Since shippers often lost ships and their cargo at sea, the bills of lading helped account for losses and reparations. Like today’s tracking tools, bills of lading indicate a transfer of responsibility throughout the supply chain. They are legal documents that confirm ownership of the goods and, as such, are assets the shipper can use to secure credit against expenses.

As the bill of lading moves through the supply chain with a shipment of, say, bags of coffee beans on pallets, the legal notion of ownership and custody travels with the chain. But the cargo list and a receipt are only two tools that leave footprints along a supply chain. These days, we need much more data than these documents provide to effectively track food through our chain.

Newer tools include smart labels with barcodes that communicate harvest dates and times. Scans of smart tags indicate precisely when food passes through the supply chain, when a USDA inspector has certified a meat shipment or the temperature of the interior of a shipping container or a tractor trailer. All this data is being gathered as food travels to our plates.

These new tools go far beyond those old bills of lading, but the intention of those bills and the chain of custody remain the same.

Just wait until blockchain technology picks up where bills of lading and custody left off. Then you’ll be able to see the passage of ownership of your carrots all the way from the farmer’s plot to your pot, who handled your carrot and why, when, where and maybe even the weather outside when the carrots moved between buildings. Be prepared for some surprises.

Blockchain Explained

A blockchain is a distributed, digital ledger used to track shipments. Rather than a single document — the old bill of lading — traveling throughout a supply chain, the information contained in that one document exists in many computers in the network along the way. So every time a bushel of apples moves through its supply chain, information about its steps are recorded, including who moved it, when, why and what resulted from the movement. The data form blocks that leave unique “fingerprints” along the chain. Any attempt to change a fingerprint travels throughout the entire chain, alerting everyone that the integrity of the chain was compromised. If someone steals an apple, the blockchain will know where and when it disappeared. For the food industry, blockchain appears to be a way to prevent food fraud and ensure food safety. Real-time awareness of inconsistencies in the chain will enable faster and more precise responses to food-borne disease outbreaks. Consider the Romaine lettuce contamination in early 2018. Blockchains would have enabled investigators to track back all the way to rows of lettuce growing in the field. At least that’s the theory.

Route Optimization That Allows for Constant Change

by Cory Leahy | Jun 22, 2018 | Feature, Issue 4, Stories

When Layla Shaikley began brainstorming with three classmates, it was to fulfill an assignment in a class on entrepreneurship at MIT. The professor had challenged them to devise a technology that could change a billion lives. Focused on developing countries, the foursome looked at how to use data from volatile zones to draw conclusions about crime and personal safety. They decided to target cell phone data and searched for partners outside the U.S.

But when they began asking around, they learned that companies of all sizes had a more pressing problem: navigating day-to-day deliveries. While routing solutions such as Roadnet^® — one of the largest — do exist, these technologies planned routes the night before. They couldn’t make real-time adjustments if a snowstorm hit, traffic got snarled, loading docks filled up or the customer didn’t turn up to receive delivery.

Along with potential customers voicing their needs, MIT advisors noted the same challenge existed in the U.S. Using harvested data as a backbone, the team tackled the complex problem of route optimization for the shipping and logistics industry. Here was the answer to their assignment: a technology to offer nimble routing using big data, machine learning and cell phones.

The first thing they discovered was that most traditional delivery routing systems weren’t accounting for the volume of available open-source data that could reveal historical patterns such as traffic and weather. The team created several algorithms that take in passive data, including historical service times or traffic patterns as well as direct feedback from drivers using their prototype — a straightforward mobile app for drivers to follow, paired with a web-based tool for managers to review.

The students searched for companies willing to share data so they could test it. That part was easy.

“We would cold-call companies on LinkedIn and say, ‘MIT and big data,’” says Shaikley with a laugh. Apparently, that combination was enough to pique interest. To better understand drivers’ challenges, Shaikley rode along with them. “I’d hop in these giant trucks and watch them use our app,” she says. “It was like standing in front of a crowd naked. Drivers are sharp and they know what they’re doing.” And they had immediate feedback: Drivers were critical of the abundance of in-app messaging. How could they deal with a ton of pop-ups while on the road?

After two years of fine-tuning their proof of concept, the team made it official, incorporating the business and naming it Wise Systems. After graduation in 2014, they joined an MIT startup accelerator. When they wrapped that, they searched for paying clients.

Through an advisor at the MIT Center for Transportation and Logistics, they were introduced to Anheuser-Busch. They walked the beer giant through their process, explaining that by using data such as traffic, cancellations, late customers and weather, the Wise algorithms adjust drivers’ schedules on the fly. This means “they can make the most efficient decisions possible” about navigation and order of delivery, according to Chazz Sims, Wise Systems CEO and co-founder.

In 2016, Anheuser-Busch agreed to run a pilot using Wise Systems in two locations: Seattle and San Diego. The company still used Roadnet, its existing technology, for its route pre-planning, but it used Wise for day-of routing. Several months later, when Anheuser-Busch reviewed the metrics — driver satisfaction, shorter routes, quicker work time — they were impressed enough to roll the Wise launch out to every single U.S. wholesaler, plus two locations in Canada.

Wise’s success with the beer giant demonstrates the novelty of their solution — real-time route optimization.

“People think this is solved, but it’s not,” says Sims. Case in point: UPS spent billions to create its in-house system, called Orion. Initiated more than a decade ago, the system didn’t launch until 2016, with the help of 500 staffers working on the technology. In contrast, Wise has a staff of 15. While UPS has incredible numbers — handling 15.8 million packages on an average day — imagine how much technology has changed since Orion was initiated. A UPS spokesperson noted that real-time optimization, including real-time navigation and updates after each stop, won’t be fully deployed until 2019.

Wise’s app makes extensive use of third- party tools — including mapping, weather, traffic and navigation — and focuses solely on the algorithms that take in the data and create flexible day-of schedules.

“We pull real-time traffic, we look at history, we make projections of what the rest of the day will be like,” says Sims. Taking into account that specific route’s history, the software determines that if a driver continues with his or her current route, a delay is likely. At this point, the Wise app alerts the driver to a route change, which the driver can accept or reject based on his or her experience with the trip.

Shaikley calls drivers’ collective experience “tribal knowledge.” A driver who hits the same stop week after week knows some customers have good and bad times for deliveries. Maybe the Coke delivery guy will be there at the same time, maybe parking will be terrible, perhaps the customer is out for his daily coffee.

“They [drivers] can add their own knowledge and insight into the app, and we can take in the feedback,” says Sims, noting that future algorithms for a specific route would include those updates. Shaikley emphasizes their goal of being a driver-first solution.

With several new contracts on the horizon, Wise Systems is making progress expanding the business and plans to capture new market segments in 2018. They will have helped the delivery of 10 million packages by the end of this year by homing in on a single part of the puzzle: flexible routing. For a project that started as a grad school lark, Shaikley says they’re chipping away at the original goal of changing a billion lives by focusing on drivers. “Understanding what is in their heads is the most valuable.”

Wise Systems co-founder Layla Shaikley isn’t your run-of-the-mill MIT architecture grad. Yes, she co-created a tech startup that’s improving the way logistics companies optimize deliveries. But she also interned at NASA, co-founded TEDxBaghdad and co-produced a video featuring #mipsterz, aka Muslim hipsters. Creativity and impact are guiding themes for Layla and key pieces of a lesson her own Muslim parents instilled early on. “They had one rule for me growing up: Do whatever you want, just be the best at it.”

Keep up with the latest in logistics entrepreneurship and follow Layla Shaikley on Twitter @laylool.

The Evolution of How We Shop for Food

by Cory Leahy | Jun 22, 2018 | Feature, Issue 4, Stories

In 1900, the “eat local” movement wasn’t a movement — it was harsh reality. Just over a century later, advances in technology — from shipping to inventory management — allow us not only to eat Japanese sushi so fresh it’s practically flapping, but also to restock our fridge with delivered groceries we ordered two hours before. How did our food get here?

Located in a gritty section of Manhattan called Hell’s Kitchen is a large grocery store stocked with everyday essentials — but it’s not open to the public. The building is leased by Fresh Direct, the largest online grocer in the northeast; it’s part of a new hybrid of on-demand shopping and is called a “dark store.” Products on the shelf of a dark store are picked and packed by employees and sent off in cars or on bicycles to fulfill same-day deliveries. In today’s grocery store parlance, same-day has ousted Fed-Ex priority overnight as the new gold standard.

For FreshDirect, creating a new sub-brand to serve consumers’ last-minute needs was vital to remaining competitive. The idea was tossed around in 2011, when the team did a market assessment of its conventional model. Online grocery stores offered a wide spectrum of where and when you get your food. But if you needed something the same day — maybe because you hadn’t thought about dinner or you didn’t know where you would be — well, you were high and dry. The resulting concept, named Foodkick, launched first in Brooklyn in November 2015 and then in Manhattan in 2017.

The private company won’t share numbers, but Jason Lepes, vice president of merchandising, says they’ll be expanding to a third location soon.

“The business is going really well,” he says. “Huge.” FreshDirect is not alone. A McKinsey & Company report on the state of parcel delivery notes: “The last mile is seeing disruption from new business models that address customer demand for ever-faster delivery.”

While speedy delivery is what everyone says they want, consumers are mostly interested in the cheapest option. What will bring down the cost of same-day delivery? Scale, automation and robots.

This is a grocery store. But the public isn’t allowed inside — only Foodkick’s personal shoppers, who gather provisions ordered online and send them via bike or car to customers. The so-called dark store enables same-day deliveries in Manhattan. (Click image to enlarge.)

The Roots of Food Shopping

How did we get here? While today’s passionate consumers debate the merits of local versus organic, in the early 1900s everything was local. Markets were small areas where carts, farmers, buyers and sellers gathered together to buy, sell and trade. In cities, if you couldn’t pick it up within a 10-minute walk from your home, it wasn’t in your bag. Markets were open six days a week, and notions like refrigeration were pure space-travel fantasy.

Eventually, these loose outdoor areas moved under roofs and inside buildings to create permanent spaces for vendors, which enabled more reliable sourcing and a greater selection of foods offered. Over time, improvements in transportation and shipping also increased selection.

Before cars overhauled our diet — allowing consumers the ability to drive longer distances to stores and buy more than one could carry home by hand — trains did. First, by moving commodities around the country, increasing selections and lowering prices at markets. And then, by incorporating refrigeration technology.

“The refrigerated rail car made meat affordable for average households by allowing companies to ship carcasses rather than live animals across the country,” writes Marc Levinson in “The Box,” his book about the shipping industry. Once refrigeration became an everyday reality, food products could be shipped farther from their origin. [Learn more about the importance of refrigeration in the food supply chain in our feature story, “Transcending Seasons: Following the Global Cold Chain.”]

But before shipping could become fully globalized, our food cargo had to transition from rails to trucks, a trend that began in the 1940s and firmly took hold in the 1950s.

Once trucking became the de facto interstate transit (complementing trains but surpassing them in goods delivered), leaders in the industry began retrofitting the human side of delivery, tackling shipyards first. Trucking magnate Malcom McLean realized that quicker loading times could improve every stage of logistics. He helped create a streamlined container, leveraging what he knew of trucks and trains. This shipping container became the industry standard and rapidly made delivering goods by boat an affordable idea. In the 1960s, once mechanical cranes transformed how containers were loaded and unloaded, removing traditional dockworkers from the process almost completely, goods from every continent, such as kiwis from New Zealand, Italy or China, could reach the world.

Read our story about early NYC’s network of markets, located so people could access provisions as part of their daily routines.

Global Goods

Each year, 817 million tons of foods are shipped around the world, with distances increasing over the last 50 years to an average of 1,300 miles. More than $50 billion worth of goods is moved every day by cars and trucks, a journey that depends on shipping containers. We need look no farther than our morning cup of coffee for an illustration of those miles.

“By the time you enjoy the beans back in L.A., they had traveled more than 30,000 miles from field to exporter to port to factory to distribution center to store to my house — more than enough to circumnavigate the globe,” writes Edward Humes in “Door to Door.” “Thousands of man-hours and billions of dollars in technology and infrastructure — along with the efforts of countless unsung heroes who pack, lift, load and drive and track it all — combined to bring that cup of coffee to my lips.”

Fast Versus Instant

Ten years ago, the Natural Resources Defense Council reported that a “typical American-prepared meal contains ingredients from at least five countries outside the United States.” What’s in our refrigerator today represents an even bigger diversity, and the last mile these far-flung foods travel is being compressed into a sandwich of instantaneous desire.

While many companies and startups are focusing on speeding up the last mile, only a fraction of consumers are ready for it. In a survey of almost 5,000 people, McKinsey reported that only 23 percent wanted to pay for the same-day option. Despite that, “same-day and instant delivery will likely reach a combined share of 15 percent of the market by 2020,” McKinsey asserts.

Evidence of this burgeoning trend is everywhere: Amazon expanded its same-day delivery service to Prime members in 8,000 cities in early 2018. Around the same time, Target purchased Shipt, which has more than 20,000 personal shoppers, for $550 million. Instacart, which works with almost every major supermarket, has expanded to 69 regions across the U.S. and by the end of 2017 was serving 60 percent of American homes. Jet.com, owned by Walmart Inc., offers its same-day service for free, and soon, Walmart will pilot the same service in New York.

While everyone from big brands to startups attempts to tackle the challenges of same-day food logistics — a problem that involves route optimization, staffing, merchandising, scheduling and supply chain — the concept still relies on old-world delivery methods like trains, trucks and ships. Whoever dramatically changes that network — getting food delivered to our homes in game-changing ways — will also own that well-worn cliché: I reinvented the wheel.

HEB’s Curbside Pickup is only one of many examples of ways we’ve outsourced our shopping to others. Personal shoppers gather the items on your list and package it all together for your quick pickup in designated parking spaces. (Click image to enlarge.)

Will Trucks Ever Vanish? The Future of Transportation

by Cory Leahy | Jun 19, 2018 | Feature, Issue 4, Stories

While trains, trucks and ships continue the global movement of our food in what is now a decades-old system, the evolution of that last mile to our front door is vaulting forward. Here are a few innovations that might become old hat within the next few years.

Foodie Robots

Don’t be surprised when you begin to notice your sidewalk cluttered with electronics instead of people. DoorDash, an on-demand food delivery service based in San Francisco, is testing out robots as an addition to its food-delivery workforce. [Read more about DoorDash in our story, “Smarter TV Dinners.”] With pilot programs that began in Redwood City in 2017, the self-driving robots deliver goods to customers within a two-mile radius. The futuristic helpers come from Starship Technologies and look like small refrigerators on wheels. The self-guided machines use nine cameras and sound waves to create an imaginary bubble around them, which allows them to go around objects or make a full stop. It’s not all rose-colored glasses, though, as cities like San Francisco attempt to enact restrictions limiting these pesky bots.

Edible Drones

The future of delivery, according to everyone, is drones. But that reality — drones dropping boxes out of the air — is a long way off, despite stunts pulled off by Google and Amazon. However, two designs are delivering food in meaningful ways. Windhorse Aerospace has developed a one-use drone, nicknamed Pouncer, to bring food and other supplies to disaster zones. The device, made of lightweight plywood that can be used for firewood post-delivery, incorporates meals wrapped in thin plastic that could be reused in disaster shelters once the meals are finished. According to founder Nigel Gifford (above), the drone will feed about 100 people for one day. Inedible components, such as the electronics, are being kept to a minimum. One day, Gifford’s crafty engineers could wrap those components in bouillon cubes. Sounds delicious, right?

Another forward-thinking drone test is happening in our national parks. The pilot program is aimed at rescuing prairie dogs. The cute rodents have been hit by a disease that, if left untreated, could spell disaster for their primary predator, the black-footed ferret, an animal on the brink of extinction. This is where the drones come in: They’re dropping peanut-butter pellets — the size of blueberries — laced with vaccine for the sick prairie dogs on the ground. The beauty of the drones in both examples is the distance they can cover and their ability to serve hard-to-reach spots.

Autonomous Pizza

For six weeks in late 2017, Ford partnered with Domino’s to deliver pizzas to randomly selected customers in Ann Arbor, Michigan, via its Ford Fusion Hybrid Autonomous Research Vehicle. Customers who agreed to be a part of the test could track their pizza on the Domino’s delivery app, receiving text messages as the car approached. When it arrived, customers received a text with a unique code to unlock the heating compartment inside the vehicle and retrieve their pizza. Ford’s test cars use lidar, a method for measuring distance to a target using pulsed laser light detected by both radar and camera sensors. While the test did include an engineer behind the wheel, the windows were blacked out so there was no interaction. Despite these depersonalization measures, the team found people wanted to interact with the car, even saying hello to it and waving goodbye. As the second-most-profitable pizza company in the world, behind Pizza Hut, Domino’s is paying close attention to what role self-driving vehicles may play in the future. While Ford won’t begin building its self-driving vehicles until 2021, you can already order a pie from Domino’s simply by tweeting the pizza emoji to your local franchise. [Read more about the self-driving Domino’s vehicles in MIT’s Technology Review.]

Underground Delivery

In the distant future we may see the return of pneumatic tubes making their way back into the world as we know it. Several years ago, Amazon filed for a patent for a dedicated system of underground tunnels that could bring packages closer to home — a system that “may avoid congestion experienced by traditional transportation networks.” Late in 2016, the patent was awarded. Other companies are tinkering with similar ideas: Elon Musk is developing technology to bore tunnels below street level in Los Angeles, and Mole Solutions Ltd, an English company, has tested similar systems with government funding. But there’s another more obvious use for our underground spaces, and that’s for our salad bowl. So far, we’ve got greens growing inside giant warehouses, in shipping containers and on rooftops, and it won’t be long before we see hydroponic cells — microfarms, if you will — cropping up underground. When the lettuce is ready for harvest, it can be delivered quickly to surrounding areas, keeping the carbon footprint as tiny as a microgreen.

On Our Loading Dock: Food System Resources

by Cory Leahy | Jun 18, 2018 | Issue 4, Loading Dock, Stories

Our nightstands are loaded with books to read and our laptops are packed with websites to explore and unpack some wisdom about the global food supply chain.

Books

Before the Refrigerator (Jonathan Rees)

Before the refrigerator, there was the icebox. But if you didn’t live in the frozen tundra, getting ice required a complex choreography. Jonathan Rees traces the process of ice harvesting and distribution — a key method of preserving perishable foods — as it evolved in the late 19th and early 20th centuries. As the country moved toward mechanical cooling, widely available ice played a vital role in transforming the American diet. (Read Jonathan Rees’s Food+City story about the cold chain.)

Coffee Lids: Peel, Pinch, Pucker, Puncture (Louise Harpman, Scott Specht)

Some things just seem like they were always there, as if no one could possibly have spent time inventing them. The ubiquitous plastic lid on the humble paper coffee cup is just such an item. But take time to consider its nuanced and varied design features, as architects Louise Harpman and Scott Specht have in this delightful mini-primer on industrial design, and you may enjoy your morning joe even more.

Barges and Bread (Di Murrell)

It’s not every day that a historian has lived the life she’s writing about. But for Di Murrell, barging has been her way of life for more than 30 years. Her book looks way back to 13th century London and the history of the grain trade on the Thames. Grains and bread — not coincidentally, a synonym for money — were staples for all citizens because, as a commodity crop, grain was stable, and large quantities could be transported efficiently over even the shallowest waterways. Take a trip back in time with the historian barge master. (Check out our story about the role of barges in moving food throughout history.)

The Flavor Thesaurus (Niki Segnit)

As we investigated IBM’s Chef Watson, another source of clever food pairings sprang to mind: Niki Segnit’s “The Flavor Thesaurus.” Structured like Roget’s classic, the book lists ingredients — such as beets, blueberries, oysters — and offers classic and novel pairings based on flavor themes. Recipes and other suggested preparations are included in the text. It’s a fantastic resource for moving off the beaten path and developing your own recipes.

Fishing Lessons (Kevin Bailey)

Bailey provides a glimpse of the future of the global fishing industry, documenting the rise and fall of fish populations, the loss of indigenous fisheries and the arrival of fish farms. He makes the case for a future seafood industry that includes “new” artisan cultures while incorporating new ways of selling direct to consumers. He says that his book provides “a fine-grained view of the larger issues in the world’s fisheries — too many fishermen with too few fish, conflicts with other resource users, loss of fishing rights and degraded habitats.” There’s room for hope, according to the author.

The Long Haul (Finn Murphy)

Finn Murphy dropped out of college in the late 1980s, much to the chagrin of his parents, and became a long-haul trucker. He’s a furniture mover, but his experience driving the nation’s highways — and navigating the small lanes of Lower Manhattan or the mountain passes in Colorado’s Rockies — runs in parallel to the thousands of other haulers who transport our food, our packages and everything else we buy and ship. This catchy memoir offers multiple tableaux, and lots of juicy slang terms, of one life on the road. (Read about another truck driver, Annette Womack, in our Food Mover story from Issue 2.)

Podcasts

Sourcing Matters

Host Aaron Niederhelman takes listeners with him as he examines problems with and solutions for feeding ourselves into the future. He finds leaders focused on food system reform and reducing environmental impact who tell stories worth pausing for. “Our goal with this show is to celebrate leading voices committed to promoting food values through proper natural resource management,” says the podcast’s website. “It is, after all, the sourcing which matters.”

Films

Rotten (Netflix)

This series of six episodes dives into various parts of the food supply chain, exposing some unsavory realities of the industrial food complex. Mass deaths of honeybees, the plight of peanut farmers in an age of allergies, the economics of dairy farming and the dwindling global fish supply are among the tough topics the filmmakers tackle. It may leave you wanting to move to the country and grow all your own food.

Magazines

Eaten: The Food History Magazine

Social and economic historian Emelyn Rude launched a new magazine in the fall of 2017 with a focus on the history of food. Filled with luscious eye candy, rediscovered recipes and gastronomic essays, the magazine transports readers through time on a common vehicle — food.

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The Bullwhip and the Beer Game

by Cory Leahy | Jun 18, 2018 | History, Issue 4, Stories

Only at MIT would students play a “Beer Game” to understand a supply chain phenomenon called the Bull Whip Effect. When you’re holding a whip, a small flick of the wrist creates ever-increasing amplitude down the length of the whip. It’s a problem food distributors deal with all the time because even the smallest variation in consumer demand can increase chaos and unpredictability upstream.

Jay Forrester, a professor at MIT from 1956 to 1989, devised the idea in the early 1960s to illustrate how supply chain forecasts can create inefficiencies. In the Beer Game, a single item — a case of beer — travels through a multilevel distribution system in a supply chain. Players operate four stages of the supply chain, and the objective is to order beer and deliver it to customers. Sounds simple, right? Not so fast. The simple act of a player changing the amount of beer ordered sends a ripple throughout the supply chain.

As consumers — the demand side — change their behavior, the supply side adapts inventory and warehousing activities. Players also blame each other for feedback failures that result in a lack of beer. But a build-up of supplies in a warehouse also reflects a communication breakdown between consumers and producers. You lose if you create a large inventory while trying to adjust to the change in orders. Product sitting in a warehouse costs money, so having a stable supply chain and deftly adapting to changes in demand is the winning play.

Research shows that a variation of as little as 5 percent can lead to a variation of 40 percent up the chain. For example, if consumers order fewer bottles of beer, the grocery store will send a message up the supply chain. (“Up” in supply chain lingo means moving from farm to the table; “down” means moving from table to the farm.) That 5 percent decline in beer sales in April could lead to inventory build-ups within the chain, over- ordering of packaging material, and misguided communication between brewers and ingredient producers and processors.

Another way this concept affects the food supply chain is when weather forecasters predict bad weather. A prediction of icy roads in Texas leads to a rush on grocery stores to purchase food while roads are clear. Store shelves empty, and the store’s procurement team returns to its inventory system to squeeze out more stock, while suppliers downstream scramble to find additional ingredients or sources.

As Beer Game players discover, one strategy for variation in consumer demand is to have extra inventory on hand so they can absorb a temporary uptick in demand. But storage costs money, and many food suppliers, intent on creating a “lean” supply chain, want to minimize inventory to save money and avoid food waste. Sometimes, when consumers stop buying a product, stores offer discounts and promotions, but that may cause unpredictable surges in sales that create more problems downstream. You can only hold onto tomatoes for so long.

Forecasts seem to be the culprit here, and the bullwhip effect is more about the problems in forecast-driven supply chain than in supply chain dynamics in general. If your supply chain depends less on forecasts and is more aligned with actual consumer behavior, the bullwhip effect may be dampened. Food companies that link point-of-sales data and supply chain planning can tighten the loop between consumer behavior and other activities throughout the supply chain.

If nothing else, the Bull Whip and the Beer Game reveal the systems effect of the food supply chain. Everything is connected, and one failure has dire consequences. Lack of beer is just one of them.

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Handoffs: Bills of Lading and the Cargo Custody Relay

Blockchain Explained

Related Stories

Route Optimization That Allows for Constant Change

Related Stories

The Evolution of How We Shop for Food

The Roots of Food Shopping

Global Goods

Fast Versus Instant

Related Stories

Will Trucks Ever Vanish? The Future of Transportation

Foodie Robots

Edible Drones

Autonomous Pizza

Underground Delivery

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On Our Loading Dock: Food System Resources