Holy Hot Sauce, Batman! A Sriracha Shortage?!
Ok, so there are more pressing matters in the world than the potential Sriracha shortage The Huffington Post is reporting on. But this spicy situation is a surefire way to give any seasoned CEO (and its cult followers) indigestion. What do you do when you are forced to shut down operations?
For the uninitiated, Sriracha (pictured) is a popular hot sauce manufactured by the Huy Fong Foods plant in California. Complaints from nearby residents about the strong odors emanating from the plant may force the company to shutter operations for a bit to figure out a solution, which could lead to a shortage, company founder and CEO David Tran told the L.A. Times.
Supply chain disruption? Potential product makeover? Cranky customers? Sounds like a job for SAP.
I had a chance to catch up with SAP’s Supply Chain guru, Richard Howells, to learn what he would recommend in this type of fire, er, dire situation.
1. Don’t get hot under the production collar. Alternate sources or production facilities would mitigate supply chain risk, according to Richard. “Being 100% reliant on one facility or supplier to produce a product makes you vulnerable to unexpected delays, issues or downtime,” he said. “It’s also an opportunity to perform preventative maintenance on the equipment to ensure no downtime when you return to production.”
2. Warm up to software solutions. Software solutions can help identify alternate sources or the reliability of supply (e.g. Supply Chain InfoCenter), according to Richard. “This also appears to be an area where a PLM solution can help in the research and development of alternate recipes for producing a less pungent version of the product,” he said.
3. Keep customers cool. Are there other strategies, besides raising prices, to stay in business? According to Richard, “You are in a situation where you have to prioritize customers and ensure the supply you do have gets to the customers you need to service best. Customer segmentation is key when demand exceeds supply.”
What supply chain best practices would you deploy in a time of crisis?
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