Are You Prepared For Supply Chain Disruptions?

Not long ago, supply chains were the jurisdiction of logistics professionals, economists and government agencies. In the past six months, as the world entered yet another unprecedented period, the term “supply chain” has become synonymous with scarcity, inflated costs and consumer frustration. 

Nowhere are these supply chain issues more apparent than in the consumer goods industry. For the first time, many of us are seeing these problems in longer and less-than-reliable  delivery times, higher prices and most disconcerting, empty store shelves. 

In a recent OU Kosher staff meeting, Rabbi Rueven Nathanson, West Coast rabbinic field representative (RFR) shared a startling data point.  Rabbi Nathanson, who supervises kosher grape juice facilities in California, Oregon and Washington, told OU staff that this year’s regional grape juice yields will decrease by 25%. It’s not completely clear what immediate and residual effects this will have on the food industry, but it will certainly affect kosher products that use grape juice, including wines. At the least, grape juice producers will have to reduce their allocations to their customers. 

Rabbinic coordinator (RC) Rabbi Kalman Scheiner recently received a call from an OU Kosher-certified company producing a kosher-for-Passover product that was set to go into production in mid-December 2021. The caller had just been informed by a supplier that they wouldn’t be able to ship a special oil they need for this product. So  Rabbi Scheiner spoke with a colleague, Rabbi Singer, who knew of another company making the special oil. However, this oil supplier was also waiting for a critical ingredient, which they were hopeful they’d receive in time to provide the alternate ingredient. 

Rabbi Aharon Brun-Kestler, RC, summed up the current challenges facing the industry: “I’m seeing a general problem and theme, which nearly all companies are actively trying to manage. What’s happening has significant implications for kosher products in general.” 

Rabbi Brun-Kestler lists a few things he’s observed:

Production Scheduling Changes

Two possible scenarios: The manufacturer doesn’t receive a shipment because it couldn’t be produced or couldn’t be shipped. Or the shipment arrives all at once with other previously delayed orders. Both of these situations will force changes in scheduling that affect processes all the way down the line. In plants with kosher and non-kosher products, that can have significant repercussions. Issues like equipment cleaning and product storage can complicate production runs.  

Distributors Send What They Have

In order to get something out the door to satisfy customers, distributors will send whatever they have available, regardless of suitability. In some cases an ingredient or product will be a suitable replacement but sometimes it won’t meet requirements. A recent example was a company that needed butter. The distributor had a large, well-known name-brand alternative but the plant it was being produced in didn’t meet OU Kosher requirements. 

The Purchasing Department Will Buy Whatever It Can Find

A company facing a crisis needs to quickly find a replacement so it finds something new, which again can have a domino effect for the production facility and kosher products. With a network of 850 field representatives and 70 rabbinic coordinators (account managers) that spans 105 countries, 3,000 facilities and over 1.2 million products, OU Kosher is able to see what’s happening at both a macro and micro level. Kosher representatives on the ground and at OU’s New York headquarters see manufacturing issues unfold in real time and are uniquely positioned to help OU customers.

How to Prepare for and Solve Supply Chain Disruptions

The most important way to prepare for production changes is to find alternative suppliers and add them to the Schedule A,  a document with an approved supplier list for ingredients used in a kosher product or one that shares equipment with a kosher product. Many companies generally have backup suppliers but if not, we can help them connect with an OU Kosher representative to help find alternatives and add them to the Schedule A. If a company needs a quick response, they can send the name of the product or its specifications, and the OU will provide an immediate answer. Our database includes millions of products and ingredients, so the likelihood of finding something that meets requirements is very likely. And remember that our data includes co-packers and other contract services. 

“The job of OU Kosher’s employees in all departments is to support its client companies in areas that reach beyond kosher supervision. Customer service is a high priority for us.  We take pride in this and want our companies to know that they can rely on us,” said OU Kosher’s COO Rabbi Moshe Elefant.

West Coast RFR Rabbi Nathanson recounted an experience emblematic of what he and his OU Kosher colleagues regularly encounter and shows how our kosher-certified companies and consumers  benefit through the OU’s collective knowledge and connections. He was visiting a plant when the R&D person called him over to talk about something he needed help with. “I gave him some leads,” said Rabbi Nathanson, “and then he said, ‘Wait a minute. I have a few other projects you can probably help me with.’” 

While the two were leaning up against the wall chatting, the owner of the company walked by and greeted him. Fifteen minutes later the owner came by again. Finding them still in conversation he said, “How much is this conversation costing me?” The R&D rep replied, “Not only is it not costing us anything, Rabbi Nathanson’s just saved you about $20,000,” to which the owner replied, “Can I get you guys a cup of coffee or something?” 

Gary Magder