Supply-chain managers must have been crying in their beer this January when they saw the TV pictures of merry Devon lads plundering containers washed up from the hapless MSC Napoli, and carting off everything from BMW motorbikes to nappies and dogfood.
You can do an awful lot of planning to get the supply chain right, but how do you plan for shipwreck and plunder? It was an extreme example, and most disruptions are less spectacular, but with supply lines now stretching as far as China for an increasing range of goods, the supply chain is ever more complex, and there is far more to go wrong.
A survey of US supply-chain managers, commissioned by Accenture last May, revealed that most problems arose from much more mundane causes - lack of raw materials, or being let down by suppliers, for example.
Of the 151 managers interviewed, all from companies with annual revenues over $1 billion, three-quarters admitted to supply-chain disruptions over the past five years. Half those events had caused a serious or tangible impact on profitability, and a third had taken more than a month to recover from.
But most companies could do better, says Gary Hanifen, a consultant with Accenture. 'Most of the problems that people experience in their supply chain are self-inflicted, because they have failed to factor in risks properly.'
Mitigation strategies, such as having spare capacity and alternative suppliers, are expensive, he says, and he suggests that better sharing of information is the key. 'It could be something as simple as having the supplier understand your manufacturing schedule so that they are in sync with you. Information is always the cheaper thing to share, rather than having spare capacity or inventory.'
The sharing of good information is the basis of any efficient supply chain, and the industry is working on a number of initiatives to make it freely available between consenting parties.
Take basic product data, for example. This is often unavailable, out-of-date or differently described by the manufacturer, distributor and retailer. This makes it hard for everyone in the supply chain to get a single view of the truth, and makes it slow to react to change. For instance, if Kellogg's changes the size of a cornflakes pack, the supermarkets need that information fast in order to re-plan shelf layouts. Multiply that by thousands of items and you see the challenge.
The solution being adopted is the creation of electronic 'data pools' for different industries, through which suppliers can take charge of keeping their information up to date and then making it accessible to retailers.
More than 40 of these data pools already exist around the world, allowing information to be shared between retailers and manufacturers on a national or regional level. Now, thanks to standardisation work done by a global non-profit organisation called GS1, the individual data pools are starting to link in a programme called the Global Data Synchronisation Network (GDSN).
'This will revolutionise supply chains,' predicts Aedan Kernan, editor of Supply Network, a specialist magazine. 'GDSN is a standardised global network that allows operational data, including location data - down to the individual item level - to be shared and updated as product moves from raw material suppliers through to retail shelves.'
An important breakthrough came last December, he says, when Nestle and Procter & Gamble, which both make major use of 1Sync, a US-based data pool, started to share operational data with Germany's biggest retailer, the Metro Group, a user of the German data pool Sinfos, via GDSN. This proved that GDSN could work at an operational level, and experts now think a broader roll-out, linking all data pools to create a true global network, will be just a matter of time.
The standards effort is also tied into promoting the greater use of radio-frequency identification (RFID) tags for recording the progress of goods from raw material to checkout. A standard global electronic product code (EPC) is being developed that should allow retailers and suppliers to share information easily. But it will still need a huge exercise by industries to find shared definitions that they can agree on.
Even so, while RFID has made inroads in helping to track goods at pallet and container level, the tags themselves are still too expensive, or in some cases too unreliable, to go on individual items. Says Philip Kyte, a practice manager at consultants Arthur D Little: 'RFID offers little apparent financial benefit in the short term for suppliers, apart from compliance with the retailers' requirements.'
He also raises questions over the reliability of the technology. 'Technical issues include RFID accuracy, potential interference with other technical equipment, current supporting technologies that are not yet up to scratch, and no globally or nationally agreed RFID standards, with many competing RFID technologies and systems.'
RFID has also raised privacy scares among some consumer groups worried about a Big Brother-style technology that can track their every move. Websites like www.nocards.org and www.spychips.com give some idea of the level of alarm. But the civil liberties groups probably have little to fear for the time being. According to Steve Freshwater, who heads the supply-chain practice for Capgemini, companies have a lot of basic work to do in organising their data. 'They want to have a customer-driven supply chain, but they're still struggling to get the basic data right before they can really start segmenting their customers as they'd like. We see a lot of high-level mission statements, but much of the detail still needs to be done.'
Some companies are doing a good job, he says. 'In the PC market, Dell has been leading the way in connecting to the market and streamlining the supply chain, and Procter & Gamble is a leader in CPG (consumer packaged goods).' But only 60% of companies have got their internal collaborative processes sorted out, let alone testing the boundaries of full collaboration with the market and suppliers. 'There is still a way to go to put the processes and the supporting systems in place. Data will be the bottleneck of the future.
'If you can get it right and clean and, moreover, do it time and time again, it will give a competitive advantage,' he adds. 'Many companies don't really know what information they have and where they have it. They have never had to work on a global scale before, but now markets are shifting eastward and this is exposing gaps in their systems.'
But such issues are crucial in meeting the needs of future consumers. The Global Commerce Initiative, a cross-industry think-tank, recently produced a report (free from www.gci-net.org) that envisaged the retail environment in 2016 where the 'home-direct' model will prevail and visiting shops will be an event.
The vision is based on much closer engagement with the individual consumer. Systems will suggest purchases based on previous patterns - as Amazon does now, but better. Consumers will be persuaded to share their tastes and health details (allergies, for example) in exchange for a more personalised service delivered to whatever electronic device they use for shopping.
That will raise questions of trust, data privacy and who owns the shared assets. As the Global Commerce Initiative report points out: 'Privacy standards focused on areas such as health/wellness information, payment and loyalty programmes will be critical.'
And as environmental concerns increase, there will be moves to eliminate unnecessary journeys. The report predicts, for instance, that we will see new delivery companies that specialise in servicing specific neighbourhoods on behalf of multiple retailers - unlike today's model, where the Tesco and Ocado vans jostle for roadspace. Consumers might pick up their goods from a local drop-off point, or have their groceries, meals and dry-cleaning delivered to the door by a local firm in one single energy-saving delivery.
The way companies choose to organise their supply chain will differ depending on whether they compete on quality, innovation, cost or service. They may even have several supply chains to cope with different types of product. But it's clear that collaboration and the exchange of accurate data between all the links in the supply chain are going to become increasingly important to make the new model work.
The task will not be easy, especially when you factor in other aspects - corporate social responsibility (can you be sure your supplier uses no child labour?), the environment (can food really be organic if it travels 5,000 miles?), and your overall carbon footprint. But if you can gather the information, you'll have more answers to those questions too.