SINGAPORE--With the bird flu pandemic alarm sounding across the globe, now more than ever, companies urgently need to strike that delicate balance between supply and demand, says an Intentia executive.
Geoff Squires, who is the Asia-Pacific director of the Swedish mid-market enterprise resource planning company, warned that industries that are directly affected by the avian flu, should it strike, would feel a "significant impact on brand", as well as experience supply and demand effects.
For instance, when the bird flu struck Malaysia in August 2004 and the Singapore government banned poultry and egg imports from its neighbor, supermarkets and suppliers of food containing eggs in the island-state could not cope with the shortage.
Squires told ZDNet Asia in an interview here: "You won't know what the immediate impact is on demand, but your risk mitigation strategy is to know where your alternative sources of supply are."
He highlighted the example of the duck market, which "is relatively Asian" and prone to supply shortages in the case of a bird flu, because the scenario calls for mass culling of birds. Dual-sourcing of birds, in this case, would be imperative.
"If you were selling duck, for instance, and the bird flu strikes southern China, which is where your primary source of ducks comes from, then you would need to look for alternative supplies immediately," he said. He added that in this scenario, it would be good to understand one's risk profile; establish those channels for alternative sources of supply; and negotiate a deal "upfront".
Traceability of the supply is also another important factor in controlling the outcome in the event of a disaster.
Squires said software can be used to determine the origin of the afflicted birds, such as which farm and which country they came from, as well as to process the data associated with that flock.
"If the bird flu strikes [your supply], you would need to quickly identify exactly which lot the bird flu struck. And if you're a big-enough company, you will need a strong recall process as well as clear traceability of the product," he said.
He drew a parallel with the cattle industry, which suffers intermittently from outbreaks of mad cow disease. Farmers have begun to tag cows with RFID (radio frequency identification) chips to track which lots have contracted the disease. RFID tags have proven to be useful in helping farmers trace the origin of herd supplies.
At this stage, however, farmers face a rather unique obstacle in applying RFID technology to poultry. "Cattle and sheep have tags [inserted] into their ears. But ducks and chickens have no ears. There is some difficulty in attaching tags [to poultry] at the moment," he noted with a chuckle.
Intentia is familiar with the requirements of the livestock industry, because it specializes in providing ERP software to small- and medium-sized businesses (SMBs) in niche verticals, such as the food and beverage and fashion industries.
In particular, the European regulators and the United States' Food and Drug Administration impose strict specifications on the food and beverage industry concerning the origins of food supplies that are imported, and this impacts supply chains globally, said Squires.
To this end, Intentia's ERP software helps companies comply with the strict requirements imposed by these regulators, he added. The company's line of software, called Movex, include capabilities such as demand forecast, production management, production planning, and procurement planning.
Squires said: "We don't play in healthcare, government, or banking. We focus very strongly on the things that we do well, and we've designed our products around the best practices that we have developed from our customer base in those verticals."