Aon has called for a “new supply dynamic in the food and beverage industry, one that is set within a more robust, productive and sustainable framework,” said a bulletin issued from the broker’s London office.
The call came during a “thought leadership conference entitled ‘Food
Security in the 21st Century,'” sponsored by Aon, which is being held by international policy think tank Chatham House in the City of London this week.
Speaking at the event, Alex Hindson, head of Enterprise Risk Management for Aon Global Risk Consulting, stressed that the continuing ability of global food production to meet rising demand is a burning issue, and companies in the sector face the very real prospect of being unable to source materials and supply at all.
“Despite this increasing scarcity, not to mention the increasing cost of raw materials, just under half of organizations are failing to properly assess and manage risks in their supply chain, according to recent research,” Hindson stated.
“It tends to go against popular thought or perception, but efficiency, resilience and sustainability can in fact be common objectives for supply chains,” he continued. “Typically, more resilient supply chain management employs less capital.
“Key to a more robust and productive framework are more collaboration between functions, particularly risk, supply chain and procurement, as well as business partners. Equally important is investing in improved communication throughout the supply chain and less reliance on formalistic supplier audits, which often have limited value.”
Hindson also warned that the is a new breed of company, many of which are blue chip internationals, which could face the disastrous consequences of supply chain disruption in the coming year. “The food supply chain has globalized over the last decade and these issues affect smaller food producers as much as they do the multinationals,” he explained. “And with 20 million acres of arable land lost every year to urbanization and other factors, and a rapidly growing middle class demanding ever more food, the problem is not going away any time soon”, he concluded.
Source: Aon – www.aon.com
Topics Aon
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