Temple U. Professor Misty Blessley raises a timely topic.
Chapter 11 of the Heizer/Render/Munson textbook explores strategies for mitigating supply chain risks. This is particularly relevant in considering the current egg shortage. As companies produce less and purchase more, sourcing agents must fully understand the products they are sourcing to effectively manage risks. It is crucial for sourcing agents to consult experts from various fields to understand the causes of the shortage and anticipate future challenges and opportunities. A recent article describes the egg shortage as a “perfect storm of disease, costs, and demand.” The H5N1 bird flu is a key driver, requiring the depopulation of entire flocks when just one bird is infected, according to the USDA. Inflation has also raised the costs of feed, fuel, and labor, while demand spiked during the holiday season. This occurred when 17 million birds were culled, and replacing lost flocks takes months.
Four mitigation strategies can address the shortage:
1. Increased U.S. Domestic Production: Experts predict that domestic egg production in the U.S. will become more productive. Chickens tend to lay more eggs during longer days, temperate weather, and their first 1-2 years of life—conditions currently prevailing in much of the U.S.
2. Increasing Imports: Turkey is being considered as a viable source to increase egg imports. Turkey as the only country from which the U.S. imports eggs.
3. Reconsidering Broiler Eggs: The use of broiler eggs, which are fertilized eggs laid by chickens raised for meat production, is being reconsidered after being banned since 2009. Experts suggest that since these eggs are pasteurized, they could safely be used for products like cake mixes and salad dressings. Broiler eggs are used in animal feed and those unsold have traditionally had to be discarded. Over 5.4 billion eggs have gone to waste.
4. Improved Storage and Transportation: To preserve eggs, firms can implement safer transportation and storage methods. At 0°C, eggs can be stored for about six months. Fresh eggs are highly sensitive to improper storage and can be spoiled if stored near odorous goods.
By implementing these strategies, firms can mitigate disruptions caused by the egg shortage.
Classroom discussion questions:
·1. What are the tradeoffs with the use of broiler eggs?
·2.What other risk mitigation tactics would you consider as a sourcing agent?