Since 1621, the Thanksgiving holiday has been celebrated in the United States with a group of people gathering around a large feast. Although the Thanksgiving menu has evolved since the first meal, over 45 million turkeys are served across the country every year. A turkey can be found at any food market throughout the year, but November is peak season for leading turkey brands. How does a company like Jennie-O and Butterball prepare for a three-week surge in sales of a timely product like a Thanksgiving turkey? The 45 million turkeys that will be eaten this November will require a complicated and deliberate supply chain.
One of the most difficult tasks of the Thanksgiving meal is the seasonality of a perishable item as the centerpiece of the table. Ninety percent of turkeys eaten on Thanksgiving are frozen and have had a longer supply chain than the 10 percent of fresh turkeys eaten. For the consumer, a fresh turkey may seem like a better option, but for the suppliers, this is a much more practical solution for the holiday. Rong Li, assistant professor of supply chain management at the Syracuse University’s Martin J. Whitman School of Management, agrees that supplying frozen turkeys to the millions of Americans who buy them this season will hedge the risk of any production errors.
“Frozen is a great option because it will smooth production quite a lot. Having the farmer produce quickly gives them a lot of trouble if they need to raise a turkey six months ahead of time, it is wasted if you miss that time frame between conception and delivery,” says Li.
In addition to the high demand for turkeys during the season, companies have to account for different complications they may face throughout the farm-to-table supply chain process, such as food waste and a change in demand. Supply chains cause 40 percent of food waste in North America, according to the Food and Agriculture Organization (FAO) of the United Nations. The loss of product can occur at any stage of the process: production, handling, storage, processing and distribution. When turkeys are sold in such large quantities, there is a very good chance that food will be wasted and thrown out after the holiday.
Another root cause of supply chain complication is the unpredictability of demand. If a company is short on production, it will not meet the demand of the retailers and wholesale stores. If a company is overproducing, it will just cause more waste. Like any other supply chain, meat producers will face the same difficulties in estimating the demands each Thanksgiving.
“If there aren’t enough turkeys then you can’t meet the demand, and the longer the supply chain the supply chain becomes, the more difficult to estimate the demand and more waste gets produced,” Li explains. Li described this phenomenon as the bullwhip effect. The bullwhip effect is a concept that states that any small changes in demand at the retail level can have propagated effects going up the entire supply chain. Most turkey companies can generally predict how much their retailers will demand each season but will produce a safety stock to account for any changes.
Technological advancements, including different ways to raise and process turkeys, can help shorten the time it takes for turkeys to be prepared for distribution, as well as prevent complications.
“Technology and automation can be used during the processing of meat and could later be applied to raising the animals,” said Li. “This can reduce demand risk and waste during processing, which can save time, delivering the turkeys closer to the time they are in demand.” As an expert researcher on supply chain risk management, Li understands the evolving supply chain industry with new ways to quicken the chain to satisfy the consumer.
Every Thanksgiving holiday will yield more and more turkeys to be prepared and shipped across the country, so it will take the experts in the supply chain to serve the 300 million hungry Americans this Thanksgiving season.
Read more about the supply chain faculty members research at Whitman.
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