Impact Of Nut Theft On California’s Nut Industry Supply Chain

California’s Nut Industry Supply Chain

Discuss about the California Nut Industry Theft Quantitative Study.

California is the leading commercial producer of almond, pistachios, and walnuts, with United States being the global producer commanding a market share of about 80% of the total world’s production. The consumption rate has also increased on an average of about 2.17 pounds per person in the year 2016/2017 crop year. The products are consumed either as ingredients of the manufactured products such as granola bars or as snacks (Rehm & Drewnowski, 2017). California nut farming and the processing industry contributes about $7.6 billion and $3.4 billion respectively to the United States of America The nut products does not only attract consumers but also criminals that have made the California nut industry run into losses due frequent number of nut  thefts.  In 2013, about 35 truckloads of almonds, pistachios, and walnuts worth $10 million disappeared in California while in 2015 a truck driver whose paperwork was iffy vanished with products worth $450,000. Many criminals are hacking the company’s system and trick the farmer’s representatives of the nut industry, thereby collecting almonds from them before disappearing. These thefts have been rampant in the past years and have caused the farmers and the company loss of millions of shillings in every year that eventually affect the economy of the United States since most of the stolen product end up in the black market. The paper examines the impact of the of the nut theft in California and further provide the analysis of the situation, by covering the amount of the loss, the weak points favoring the theft process and recommendations on how to limit the theft cases.

The supply chain is the business designed process to enable the collection and delivery of raw materials from the farmers or suppliers for processing and then delivery of the product and services to the designated customers. The process entails, farmers, transporters, manufactures, suppliers, warehouses, retailers, and customers, therefore proper management of the supply chain ensures that the products reach the customer at the correct time. Below is a diagram representing the California Nut Industry Supply Chain.s

The California nut industry supply chain starts from the farm, where the productions of the nuts happen. California State is the main grower of commercial nuts; however, nut farming also happens in other counties thus imported into the United States for processing. The imported nuts are always shipped into the United States and collected by a designated transport company or the California Nut industry Company, while those grown in California are collected by California’s nut industry drivers upon the farmer making an order of the ready harvests through making a call to the California nut industry procurement office. The head office then releases trucks and drivers to collect the nuts from the farmers and deliver them to the factory for the drying in hot air roasting process. The roasting is essential as it changes the flavor profile of the nuts resulting in a brownie, crunchy texture. The roasted taken for the mechanical extraction of the shells, and the hull removal through the sorting machine. The kernels are packed in cartons for the delivery in various points of the world; the deliveries are always done through shipping to multiple suppliers and warehouses, point where the shipments are hijacked too before reaching the designated owner.

Vulnerable points in the supply chain

The main vulnerable points in the supply chain that foster nut thefts are at the farms, airports and on the roads during transportations. Most of the nut thefts result from the fictitious pickups, during the transportation from the farmer or at the airport to the industry. These criminals either rob the trucks at gunpoint or impersonate as the company’s official drivers, or lower the farmers or the clearance officers at the airport to release the products only to be later realized that landed on the wrong hand. The criminals exploit the advantage of the remoteness of the farmers who are easy to pull out with fake identifications, and the technological advancement whereby a request for the collection of the harvest, through phone calls and laptops as reported by Visalia Times-Delta (2014).

Through the technology, the criminals can hack and make fake documents, driving license and any other required document to enable them to impersonate. The criminals hijack the database of the transportation department and get information regarding the points of collection, track number, and time. Using such information, the criminals either impersonate as the companies officials or hijack the trucks on their way back to the company after collection and disappears. The products such as walnuts do not contain the serial number and RFID tag that makes tracking to be easy. The inability of tracing the stolen nuts through internet and high rate of consumption makes it difficult for the company to curb the heist as many cargos get lost in the black market.

Table 1 shows the value of California nut industry

Table 2 shows total cost of nut theft to the California nut industry

Table 3 shows the cost of nut theft at specific point of supply chain in 2015

Cargo theft is something that if not controlled by the company then collapse might be experienced since it takes almost a year for the crops to ripe, and the time difference in the unavailability of raw material causes the production process to slow down. According to Western Farm Press (2013), the high rate of California nut theft is high because of the tracking inability at the collection point of the nuts from the farmers. The nuts don’t always contain tracking devices such as a serial number that will ease internet tracking like in other electronic products. To control these activities, the company management must ensure that the system they are using is encrypted so as the criminals cannot be able to crack and retrieve information.

California Nut Industry should also contract another transportation company that has the security protocols to do the collection and supply of the finished products. Companies such as Road Scholar Transport offer collection and deliver services on a daily basis, and have security measures placed to curb the cargo thefts. The company has Real-time satellite tracking that enables to locate the movement of the tracks from the office. The tracking system will show the office whenever the tracks make wrong directions, make inappropriate stops and even when moving at inappropriate speed (Lin, 2018). The information will help in securing the cargo from being hijacked on the way. In case of a hijack, the company is capable of locating the track through the help of the facility security personnel and the anti-crime department.

The tracks also have electronic door monitoring and navalock that cannot be opened after the package of the nuts from the farmer, and only get opened at the designated place through electronic process. A forceful attempt of opening the door, or opening the door inappropriate time, raises the alarm in the central office. The company should also train the farmers on how to verify the documents presented by the drivers, for example calling the central office for confirmation before releasing the products.

The company in collaboration with the farmers buys insurance policies that cover theft from Real estate firms, retirement funds, and insurance companies. Such thefts are not always compensated as most happen without violence, and the insurance cover for the company does not guarantee such loss. Having that policy will reduce the amount of loss in such cases.

Table showing the cost cut if the recommendations are adopted

Conclusion

Cargo theft has always been high on electronic equipment that is easy to track and recover. However, the rise of food theft such as that faces California Nut Industry makes it difficult to track and recover the lost items since they do not contain tracking devices. The high rates of nut theft have disadvantaged farmers, the company, and the economy of the United States. The loss of revenue calls for proper supply management channel on specific points such as in the airport, at the farmer’s collection unit, on the roads and during delivery of the products to warehouses.

California nut industry needs to take into account the security measures on the transport system, both the communication channels and use of trucks with tracking devices will help in reducing the nut thefts. Additionally, the company should also acquire insurance policies that cover non-violence thefts to minimize the amount of loses per year. With the application of these recommendations, the company will not only eradicate nut theft but will also cut the cost in case of the unfortunate.

References

Lin, W. (2018). Transport provision and the practice of mobilities production. Progress In Human Geography, 42(1), 92-111. doi:10.1177/0309132516666189

Rehm, C. D., & Drewnowski, A. (2017). Replacing American snacks with tree nuts increases consumption of key nutrients among US children and adults: results of an NHANES modeling study. Nutrition Journal, 161-15. doi:10.1186/s12937-017-0238-5

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