Thanks to COVID-19, governments in most industrialized nations are preparing for shortages of life's necessities. If they fail, riots over food may be inevitable. Some wonder if we are responding appropriately to COVID-19, and it's clear that recent events expose a fundamental flaw in the global systems that bring us our daily bread.
We live in a wondrous age when global supply chains seamlessly link farmers and consumers using the principles of "just enough, just in time." For years, companies have worked hard to keep inventories low, timing shipments to balance supply and demand using knife-edge accuracy.
In many ways, this system is a miracle. Low-cost food is one outcome. And if there's a problem in one part of the supply chain, the global system is good at finding alternatives. (Mangoes from Asia gone bad? Try the mangoes from Central America!)
But with this abundance — and convenience — comes a hidden cost that COVID-19 has exposed: a loss of resilience.
Our global food system depends on the tendrils of international trade to wrap the world in an ever more complex system of buyers, sellers, processors and retailers, all of whom are motivated to keep costs low and operations lean.
So when the supply chain system itself is thrown into question — as it is now thanks to COVID-19 — then the wheels threaten to come off the proverbial apple cart. COVID-19 shows that we need to wake up and realize that if we really want to be resilient, we need to build in more redundancies, buffers and firewalls into the systems we depend on for life.
In practical terms, this means we should be keeping larger inventories and promoting a greater degree of regional self-sufficiency.
These measures will help ensure that our communities don't panic if the food trucks stop.
But while this may sound sensible, high inventories and more regional self-sufficiency are, in fact, antithetical to the "just enough, just in time" approach that drives most of our economy, even though no one's suggesting we need to be completely self-sufficient of the time. Read more at Business Insider