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Global Supply Chain Management GSCM Final Assignment Abdirahman Adan Ahmed
Global Supply Chain Management GSCM Final Assignment Abdirahman Adan Ahmed
Global Supply Chain Management GSCM Final Assignment Abdirahman Adan Ahmed
The assignment is about “How the Covid-19 and Russian-Ukraine war affected the Global supply
chain network and Egyptian’s food sector.”
Confirmation of Originality, this is to certify that the work is solely mine and any other sources
utilized are fully referenced.
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Executive Summary
Global supply chain consists mainly on global firms that are operating jointly over several
countries or even continents to make sure that their final raw supplies or services reach the final
consumers, however there are several layers of challenges or obstacles that makes no easy task for
managers whether on man-made or natural (cultures, designs, customs etc. or natural calamities).
Over the last three years, the world has experienced a catastrophic event of Covid-19 that
devastated the global supply chain management GSCM followed by the Russian-Ukraine, R-U
war.
The assignment report is currently based on the two mentioned Burdens; the report will be
subdivided into three sections.
Section A, Assessment of supply chain disruption during covid-19 period and how the Russian-
Ukraine war affected the food chain system of Egypt.
Section B. Initiatives taken by Egyptian authorities to keep the supply go smooth during the
periods mainly during the R-U war.
Section C. Implementation of technological advances on food industries to mitigate the
challenges of the both Burdens.
The covid-19 and Russian-Ukraine war have both affected the GSCM in a level that have not
been experienced by the Egyptians before, to mitigate the situation, Egyptian authorities engaged
in mitigation measures to reduce the spread of the virus, lock-downs, Restriction on international
cargo movement, closure of some food processing plants, reduction of work force, etc. that
reduced the level of the spread of the virus and on the other-hand it has affected production of
flatbread that is consumed in Egypt in every morning.
The R-U war has also disrupted the availability of wheat and sun-flower oil so the government
planned to source from other suppliers, the government increased local production and also
increased the subsidiaries to help 88 million users of government aid package.
Egyptian’s local production of wheat is estimated at 9 million Mt while its consumption is totaled
21.3 million Mt, leaving a big gap of 12.3Mmt that the Egyptian Government has to cover an
approximate of more than 88% of Egyptian population registered bread rationing system, the
Government allocated some $3.3B for bread subsidies.
Not only the food was disrupted by the war, also energy was also disrupted, as Ukraine imports
fuel for its food industries from Russia and Belarus so this fuel supply is critical to spring planting
and harvesting in August 2022 as of Ukrainian harvesting time.
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Table of contents.
Executive summary……………………………………………………………………………...1
Table of content.………………………………………………………………………………...2
Table of figures……………………………………………………………………………….…2
Introduction …………………………………………………………………………………......5
Global Food supply chain management………………………………………………………....6
Importance of wheat for Egypt…………………………………………………………….……7
Section A
Egyptian food supply chain disruptions during Covid-19………………………..…………..…8
Agricultural production……………………………………………………………………8
Food import/export………………………………………………………...........................9
Section B
Egyptian’s initiatives to mitigate supply chain disruptions during the Covid-19 and Russia-
Ukraine war
Over all concept
Increase of government aid Package………………………………………...……...........11
Increase local production…………………………………………...…………………….11
Diversification of wheat imports ……………………………………………...................12
Initiatives taken by some flour mills in Egypt during Covid-19 and R&U war………….13
Al-hazaa investment Group co………………....………………………………................13
Section C
Technological advancement in food supply chain………………………………………….13
The importance of AI in food industries……………………………………...…………….14
Conclusion…………………………………………………………..…………..….…….…14
References ……………………………………………….……………………………….....16
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Table of Figures
Introduction
The SCM encompasses the planning and management of all activities involved in sourcing and
procurement, conversion and all logistics management activities, importantly it also includes
coordination and collaboration with channel partners, which can be suppliers, intermediaries, third
part service providers, transportations, inbound logistics, outbound logistics, customers, in
essence, supply chain management integrates supply and demand management within and across
companies. (CSCMP, 2008).
However, food supply chain management (FSCM) is quite complex than other supply chains, a
gap in the FSCM can cost lives, as there are several challenges in the SC, such as food safety,
quality, food fraud, as well as inefficient processes, (Katsikouli et al, 2021).
FSCM is one of the most difficult supply chains to manage and is yet very important for our day-
to-day life, it requires proper production mechanism, proper storage to avoid humidity, it requires
proper transportation from country to country, from airport to airport and/or port to port.
Over the years, the world has experienced a covid-19 global food shortages, followed by R-U war
The covid-19 and Russia-Ukraine has mainly disrupted the FSC of the Middle east and North
Africa and Egypt is the major importer of wheat from both Russia and Ukraine and similarly both
R&U are the Global producers of wheat, corn and sunflower in the world, (FAO, 2022).
The ongoing conflict will also induce the disruption of global food security as it displaces
population, damages food industry infrastructure, prevents farmers from farming, blocks sea
cargo free movement, increases food price etc, (Li et al., 2022).
R&U both imported 86.01% of total wheat imports into Egypt and domestically produces roughly
(9 million tons of wheat), and Egypt cannot even reduce import dependence below 50% of their
monthly consumption, the Government propose of domestic increase production limited as the
country is mainly desert only about 5% fertile.
Egypt is the world’s major consumption of wheat about 45-55% of wheat that is consumed is
imported which makes Egypt the world’s biggest importer of wheat, (Woertz and Keulertz 2015).
as they make round flat bread.
This report will focus more on the effects of both burdens on the GSCM and how industry 4.0
will also affect the implementation of, production, procurement, logistical aspects as well as
transportation as the world is moving onto industrial 5.0, it will focus primarily on how the two
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global Burdens affected the Egyptian food industries. And how Egyptians implement industry 5.0
for their food supply chain system.
Global Food supply chain management.
Food industries play a crucial role in providing the basic necessities to support livelihoods of
various human needs (cooper et al, 1993), food is not like other products available in the markets
once harvested, produced, and should be stored delivered and retailed through specified
requirements
The food supply chain management requires special SC, like food quality, freshness within
limited time which makes the underlying supply chain more complex and difficult to manage (la
scalia et at., 2016).
Food chain become more complex unless stated and invested in, food chain start from
Agricultural and ends up in consumer and in-between these two ends encompass a large
geographical, economical over large distance between farm to food industry to retailers, from
country to country and sometimes from continent to continent, over these distance there are no
free challenge zones there might be challenges associated to it, such as food prices,
contamination, theft, food and terrorist attacks (Zsidisin et al., 2004),
After productions food requires proper maintenance like proper packaging in a way that it’s not
damaged during transportation or storage at the warehouse for retail, the packaging process is one
of the most important among all of the food manufacturing process, (Kelsey, 1985).
Ukraine is a major Agro-producer mainly wheat, sunflower, and maize and these are mainly
transported through ports in Mariupol and Odessa of Azov and Black sea respectively. As shown
in the figure below.
Egypt become highly dependent on wheat imports from both Russia and Ukraine countries than it
produces, Egyptian government spends roughly $3B annually for wheat imports alone the
Tamween ration card that covers the need of about 73 million people about half of Egyptian
population (MIST, 2019) this program is about 150 loaves of round bread per capita per month.
A part from food, Russian and Ukraine are also a major supplier of other important agro-products
in MENA Regions (middle east and North Africa) roughly 85% of sunflower imported to Egypt
are from Ukraine and 30% of corn imports because of the war this Region is suffering a lot and
Egypt is among them.
There are a number of countries roughly 25 countries supplying wheat to Egypt, so the biggest
two countries importing wheat to Egypt being R&U roughly 86.1% of Egypt’s Grand total wheat
imports (FAO, 2022), in 2020.
Section A
Egyptian food supply chain disturbances during the covid-19.
The Covid-19 and pandemics has resulted unforeseen pressure on food global supply chains,
creating unprecedented challenges for farm labor, production, processing, transport and logistical
activities (OECD), (Petetin,2020).
It has also affected Egypt’s Agri-food sector and brought the commonly known challenges of the
supply chain from Field to fork, agricultural production, food processing and transportation, it has
also affected implication for global food security the virus itself and policy restrictions resulted a
big disruption in food value chain, harvesting was interrupted as a result of shortage of workers,
farming because of lack of feed or fertilizers, transport because of reduced passage services,
market exchange because of curfews or social distancing, (Carrier-swallow et al., 2022).
Agricultural productions
Agri-food SMEs (small and medium enterprise) is an important sector for food and agricultural
economy, and they exemplify at least 90% of Egypt’s Agri-economic (MALR, 2015).
However, they are more vulnerable to any internal or external shocks like water scarcity, financial
options, etc (Abu Hatab, Hess, 2013).
So many of these SMEs faced few challenges during the lockdowns, lack of work force,
transportation and other issues, and after Government granted softened, roughly 3% ceased such
business activities. for cereals, the most important product for Egypt and among “their strategic
group of commodities”.
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Food imports
Soon after WHO announced global pandemic government authorities to respond to their national
strategic covid-19 response plan, amongst them is ban of global exports over more than 150
countries put trade measures into forces, such measures led to severe issues in terms of global
food price as well as insufficient supply, (Anania, 2013).
as food importing countries were negatively affected by the food exporting countries, Egypt
implemented different strategies to make sure food availability, these include, the importation of
substantial quantity of wheat, increase the country’s storage capacity, increase domestic
production (HEICS, 2015).
The figure below shows how price went up.
Romania one of Egypt’s main supplier of wheat initially banned exports of wheat outside the EU,
but there a wheat shipment already sold to Egypt held up by new restrictions roughly 7.59m tons
of wheat (Anania 2013).
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SECTION B.
Egyptian’s initiatives to mitigate supply chain disruptions during the Russia-Ukraine war.
Overall concept
As mentioned earlier Egypt is the world’s biggest wheat trader in 2022 alone an estimate of
13Million tones were imported, this similarly corresponds to the wheat consumption in Egypt is
relatively increasing yearly and estimate of 20.8 Million tons were used compared to 21.1million
tones in 2022 alone, the government’s effort in the area is to increase domestic production of
wheat rather than foreign dependency. (FAO, 2022).
Egyptian Agri-food deserves much attention when Government plans intervention like Covid-19
pandemic as they contribute a higher percentage to the country’s GDP.
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While restriction was a common, however farm and food industries restrictions were lowered as
they contribute a bigger for the country’s export and Domestic use.
The government buys imported and locally produced wheat and distributes to the Mills in each
governate and the produced flour is distributed to the bakeries” (the national Business news of
Egypt)
Section C
Technological advancement in supply chain
During covid-19, the world has experienced a large disruption of supply, namely, labor shortages
social distancing, lack of transportation due to lockdowns, introduction of technological
integration have become more effective and efficient, fourth industrial revolution or Industry 4.0
has transformed the supply chain and warehousing as well as manufacturing sector by
interconnecting different departments of the supply chain, and Industry 5.0 has also played a
greater role in crop quality, harvesting, watering etc.
the automated production system APS with the combination of production system, require higher
connectivity, flexibility.(Ungerean et al., 2014)
Egyptian introduced Hudhud smart assistant project for the farmers to take a picture of infested
plant and send it to Hudhud so that the clearer instruction will follow. (farmers review in Africa),
several techs were used in precision farming like remote sensing RS, (CRC, Press Taylor and
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Francis Group in 2011), GPR, Geographical information system and the most important part is
that generation of the maps of the soil.
It is greatly noticed that the Industry 4.0 can significantly increase food production as well the
entire FSC, from harvesting, through production and processing as well as proper warehousing
and highly standardized means of transportation to retailer (Kayikci et al., 2021).
Conclusion
This report has outlined Egyptian food industry, how the Covid-19 affected the food supply chain
and food industry plus, how Egyptian’s food supply chain has been disrupted by the covid-19
followed by the Russian-Ukraine war, the mitigation measures put forward by the Egyptian
authorities, to tackle the situation, the report also captures the food production of Egypt compared
to the their annual consumption, food price subsidies, restrict on food exports imposed by the
Egyptian authorities on farmers has played a significant role to tackle the global food crisis due to
Russian-Ukraine war.
The report also captures Egyptian’s production capabilities, as the country’s food mainly depends on
wheat imports from Russian-Ukraine, and 5% fertile land of Egypt is far away to cover the food gaps,
which on the hand meaning that Demand is much higher than domestic supply.
Egyptian government has to amend its strategic plan of wheat policy, increase government aid
package of wheat price subsidies, increase domestic increase of production of wheat, obtain and
diversify its global wheat suppliers and expand its irrigation system to make deserts fertile lands
the latter is subject to an agreement to make by Egyptians and Ethiopians over GERD water
system.
As Egypt’s wheat import depends on how the Russian-Ukraine war ends and effects exports of
the coming months, Egypt’s wheat will also depend on how other big wheat suppliers respond to
the vacated wheat global markets.
As mentioned Egyptian government need to discover more options on reducing this huge gap of
domestic production, global import vs domestic consumption., few takeaways are shown below.
Increasing domestic wheat production.
Reduction of high consumption of wheat (more than global average per capita per
annum).
Improving the effectiveness of Tamween food policy.
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