'Volcanic Ash = No Sushi', The Times (Raconteur)

Wednesday, June 09, 2010

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Contingency-planning and supply chain event management are all very well. But there are some things you just can’t plan for no matter how much risk assessment you do, reports James Silver.

With its dependence on fresh fish, few businesses have as complex and finely-calibrated supply chains as the Sushi trade. The journey from fisherman’s net to chef’s blade, can be tortuous, often clocking up several thousand air-miles.

As a rule Sushi restaurants dislike discussing their Godzilla-size carbon footprint, which made it all the more eyebrow-raising when the boss of one top New York chain recently revealed that the Bluefin tuna served at his tables was caught in Greek waters, flown to Japan to be gutted, cut and boxed, before being air-freighted to New York - a roundtrip of 12,676 miles. Not so much a supply chain as an around-the-world tour.

No wonder then that when an Icelandic volcano near the Eyjafjallajoekull glacier, which had been dormant since 1823, erupted on 14th April sending a plume of ash into the atmosphere, leading to the closure of swathes of European airspace for seven days, the global Sushi supply chain was badly disrupted. At the height of the crisis - on 18th April - there were just 5,204 flights in Europe compared with 24,965 on the same day a week earlier.

Exports of Norwegian salmon to Taiwan dropped by up to 20 per cent, for example, forcing Taipei’s largest chain, Sushi Express Co., which imports 3-5 tons of salmon daily, to switch to Canadian and Australian alternatives. In Malaysia, the price for fresh salmon more than doubled to US$16 per kilo.

Leading UK sushi chain itsu declined to comment on how the Eyjafjallajoekull eruption impacted on their supply chain (rival YO! Sushi claimed that that they “weren’t affected”). However, a customer who visited a City branch of itsu during the flight ban was informed that tuna sashimi was off the menu because of the volcanic ash cloud.

A subsequent conversation with a branch manager confirmed that the company’s supply of Yellowfin tuna - which is sourced from the Indian and Pacific oceans - had been interrupted “for one or two days”. French beans imported from Kenya were also hit, she said.

If The Butterfly Effect refers to the theory that the flutter of a butterfly’s wings might create tiny atmospheric changes that may ultimately alter the course of a tornado thousands of miles away, 2010’s Icelandic volcano might be viewed as a sort of Butterfly Effect in reverse.

A major faraway natural event rippled out to cause thousands of small disruptions across the world. Prime ministers and heads of states could not attend the funeral of the Polish President Lech Kaczynski, who had been killed just a few days earlier in an air crash; families found themselves stranded on holiday; Sushi-addicts in London had to make do with tuna sandwiches.

Effective Supply Chain Event Management gauges the risk of all conceivable events and factors than can disrupt a supply chain. Everyday risks can be screened out, contingency plans woven in. Some events fall into the category of unlikely, but foreseeable: if you have goods on a vessel passing through the Gulf of Aden or the Somali Basin, it is entirely possible that that ship may be hijacked by pirates. After all, in 2009 there were some 214 attacks in the region, of which 47 resulted in hijacking.

But other events are entirely unforeseeable. Few in the Sushi business are likely to forget Eyjafjallajoekull in a hurry. Even if they never learn to spell it.

(The Times, Raconteur Supplement on Supply Chain Management, 10th June 2010)

Posted by James Silver - On Wednesday, June 09, 2010

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