Horsemeat and the resilience of food supply chains

Contributor: Will Bugler

As the horsemeat scandal gallops on apace and we learn that as well as worrying about the amount of sugar in meat products we are also to be concerned about their Shergar levels, it is appropriate to reflect on the nature of the meat supply chain. The saga has not only exposed the full extent of the capacity for social media to generate jokes at a frankly frightening rate but has also uncovered how spiralling complexity can undermine resilience.

One of the most surprising things about the affair, after the initial shock, that something labelled ‘beef’ may actually be up to 100% horse, is the difficulty that the authorities have had in finding the source of the problem. One might have thought that, on discovering that a large portion of beef products that have been sold, in good faith, to consumers across Europe, was horsemeat, it would be a fairly simple process to find the source. Yet weeks after the discovery of horse DNA was first made in beef burgers sold throughout the UK and Ireland, the authorities have only just discovered that the likely source is in Romania. Not an exact company mind you, just someone in Romania.

Resilience in the food supply chain, as with most complex-systems, should protect against a wide variety of shocks. Environmental disasters, fuel price rises and technological failures are all shocks that can disrupt the supply chain. However, disturbances can take innumerable forms, and in the case of the horsemeat scandal, we see that corruption and criminal activity can also constitute a threat to the system. There are many drivers for this, religious conviction or revenge could feasibly lead people to undertake criminal acts that might threaten complex systems. In this case, of course, it appears that the primary driver was money.

As agriculture has become increasingly market-oriented, exposure to price-related shocks has inevitably increased. This is not an irreconcilable weakness but it does mean that, as with any other free-market, it is vulnerable to corrupt practice. We have seen this in many other systems as well of course, from bankers fixing Libor rates to fishermen under weighing their catches. Such weaknesses are moderated through measures such as monitoring, regulation and penal deterrents. These control processes rely, to a large extent on transparency and the availability of information.

Prior to the horsemeat scandal many people – this author included – may have understandably assumed that traceability would not be a problem, especially for branded products sold by the some of the biggest retailers in Europe. Horsemeat in a lasagne? They’ll find out who is responsible in a matter of hours, minutes even, a click of a mouse button, one phone call. Now, of course, we are all too aware that this is not the case.

So why is it that when a beef burger is found to be a horse burger no one quite knows who to blame? The simple answer is complexity. So often the enemy of resilience, complexity can make systems far more susceptible to shock, as identifying and understanding the areas of weakness become increasingly hard. The horsemeat scandal is a prime example of this. You don’t have to take my word for it; Dalton Philips, Chief Executive of Morrisons, told the BBC that the key issue that needed addressing was… the complexity of the food supply chain:

“If you think about [the food supply chain] in its simplest terms you have got the farmer, you’ve got the abattoir, you’ve got the meat processor, and the retailer, so there is four people in the chain. But today in the UK [supply chains] have become so complex that the retailer or the manufacturer doesn’t know where the product’s coming from… It doesn’t need to be complicated and we need to bring it back to its simplest terms. When you introduce complexity, you introduce risk.”

The supply chain of Finders ‘beef’ lasagne, shows what a mess our meat-supply is in. The French Anti-Fraud Office, which is investigating the product, has tried to shed some light on the situation. They have found that Finders, a Swedish brand supplying British supermarkets, employed Comigel – a French company – to make its ready meals. In order to get meat for its factory in Luxembourg, Comigel asked another French company Spanghero, who went to an agent in Cyprus, who in turn used another agent in the Netherlands, who placed the order at an abattoir in Romania.

Oh, what a tangled web we weave, when first we practice to deceive.

In an article for the Harvard Business Review called, “Want to Build Resilience? Kill the Complexity” Andrew Zolli, founder of PopTech and co-author of the must-read book on resilience of 2012, ‘Resilience: Why Things Bounce Back’, explains why complexity is so problematic:

As the complexity of these systems grow, both the sources and severity of possible disruptions increases, even as the size required for potential ‘triggering events’ decreases — it can take only a tiny event, at the wrong place or at the wrong time, to spark a calamity…” he writes. Zolli also warns against simply adding more layers to the complexity, by introducing many more monitoring procedures or bureaucracy: “Without taming complexity, greater transparency and fuller disclosures don’t necessarily help, and might actually hurt: making lots of raw data available just makes a bigger pile of hay in which to try and find the needle.”

In the case of the horsemeat scandal, it is perhaps unsurprising that the way we may eventually trace the culprit is by following the litigation trail; each link in the chain suing the next until there is no one to pass the buck on to. At the moment this trail has led the authorities to Romania; a country where the price of horsemeat has recently dropped suddenly as the government introduced a new law banning horse and carts from the country’s roads. The fact that this saga has been sparked by a minor piece of legislation in a country in Eastern Europe underlines how unexpected events can threaten vital systems.

Following Zolli, our response to this problem must not be to beef-up (no pun intended) our monitoring processes, strengthen our reporting strategies or demand a more detailed paper trail. Our response must be: simplify.

Will Bugler is Editor at Get Resilient, he has worked within the ‘Adapting to Climate Change’ department at Defra, Friends of the Earth, and for the UK government’s advisory body on climate change issues; The Energy and Climate Change Committee.

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