The SunRice Group is an Australian food group comprising multiple businesses, assets, and operations across Australia, New Zealand, the Middle East, the United States, the Pacific Islands, and Asia. SunRice’s (2021) portfolio of 35 major brands present rice foods, gourmet, ‘free from’ goods, and animal feeds. SunRice’s (2021) future strategy is designed to strengthen its position as a global, multi-origin, and multi-market business. SunRice (2021) aims to benefit all of its shareholders alike – its investors, growers, employees, and the communities in which it operates. The company pursues its objectives through a variety of operational and sustainability-oriented solutions.
There are several ways international companies may approach building effective supply chains and logistics systems. SunRice (2021) built a significant international sourcing capability to move rice products from 12 countries, including Italy, China, Pakistan, Australia, Cambodia, India, Uruguay, the USA, and others. The origins of the supply chain where the rice is sourced are dispersed worldwide, currently including 115 growers (SunRice, 2021). The product is then processed at SunFoods’ facility in Woodland, California, and packed into high-value branded products for sale (SunRice, 2021). However, the company simultaneously provides more affordable Asian-sourced rice brands like SunGold to the Australian market (SunRice, 2021). The diversified approach to product sourcing and distribution allows for critical operational versatility. SunRice (2021) developed complex supply chains to meet global demand in approximately 50 markets from Japan to Canada. This approach ensures reliable and quality supply through strategic logistics and supply agreements.
Moreover, the company focuses on product innovation and new launches to constantly improve the quality of its products and processes. For instance, SunFoods’ contract with the Central Valley Rice Growers Association guarantees rice supply through 2024 (SunRice, 2021). Further, SunRice (2021) has implemented a new Supplier Sustainability Program, focusing on labour standards in the supply chain as part of its commitment to UN Sustainable Development Goals (SDGs). Such practices are compelling drivers for aligning with the SDGs (Zimon, Tyan, and Sroufe, 2020). Another addition to the system was marked by the completion of the $4.5 million upgrades of the Leeton Specialty Rice Foods Facility to reduce operating costs while improving product quality (SunRice, 2021). These logistics and supply chain decisions allow the company to effectively facilitate its operations and sustainability processes.
Economic, Environmental, and Social Impacts
The company identified several critical factors as impactful in 2021, which can be subdivided into macroeconomic and sustainability considerations. According to the SunRice (2021) report, the macroeconomic factors include growing demand for health, wellness, and nutrition, demographic shifts, the rise of Asian consumer demand, and supply chain stress. Recently, SunRice (2021) had to address the volatility of the Australian rice supply, limited water and land, market diversification, access issues, economic and geopolitical conditions’ instability stemming from climate change and the COVID-19 market impacts. Pandemic impacts included disruptions to the shipping industry, differing regulatory requirements, competition for talent, resources, capabilities, restrictions on movement, and other complexities, which disrupted operations worldwide (SunRice, 2021). All these matters brought a substantial cost to the business.
Some of the factors above will be discussed at length. As Norris et al. (2020) state, the business suffers if supply chain vulnerabilities are not identified and addressed. For instance, rise in demand of Asian consumers may vary by country, indicating a differential effect on business (Bairagi et al., 2020). Moreover, the company should critically examine which demographic shifts are influential, given that there is a chance of political bias in the analysis (Perkins, Toskos Dils, and Flusberg, 2022). The stress put on the supply chain in 2021 is discussed in the last section of this analysis. Weiszegger (2020) recommends integrating category management to safeguard the supply chain and improve operational performance. Effective operational management in the modern world necessitates big data analytics and increasing staff capabilities (Bag et al., 2020). Arguably, SunRice already incorporates this approach to an extent, but further improvements may be made.
A separate category of external factors that impact the company is related to sustainability. SunRice (2021) identifies climate change, a global waste crisis, water scarcity, chemicals and pesticides, habitat and biodiversity loss, poverty, slavery and inequality, and population growth. These factors may significantly challenge the company’s operation performance, given that water scarcity and other climate change impacts will worsen production in Australia and other regions (Chandio, Magsi, and Ozturk, 2020). However, the company’s focus on sustainability commitments and effective transportation chains is a step in the right direction. Dev, Shankar, and Qaiser (2020) recommend embracing the diffusion of information sharing and green products. Overall, the impacts of climate change are likely to compromise both operational and sustainability commitments unless appropriate steps are taken.
Operational and Management Approaches
In 2021, the SunRice Group faced various operational and management challenges. The first operational decisions that the company had to address were related to climate change issues. The prior two years (2019-2020) have exhibited critically low crop yields due to worsening drought, water availability, and high water prices (SunRice, 2021). SunRice (2021) had to cut costs due to the expected low production, while offering all-time-low contracts to ensure sufficient product availability to maintain baseline levels. Moreover, SunRice had to build its international sourcing capability to address these issues, including trading in Singapore, production in Vietnam, capability in Californian facilities, and supply arrangements with China and India. SunRice (2021) sourced rice from 12 countries, which enabled the business to meet growing global demand, with only 5% of rice supply from its Australian supply chain. Lim-Camacho et al. (2017) stress that complex resource supply chains are more resilient to climate change disruptions, explaining SunRice’s resilience to the past events. Hence, SunRice’s variety of rice origins across its international supply network provided an opportunity to meet the demand and overcome these challenges.
The COVID-19 pandemic further exacerbated the impact on the company. The increased consumer demand linked to the pandemic exhausted existing inventory more quickly than initially anticipated (SunRice, 2021). Despite a favourable impact on revenue, this lack of inventory meant some locations ran sub-optimally on reduced shifts during the year, with production ceasing until the rice was available from the next harvest (SunRice, 2021). SunRice (2021) had to meticulously manage rice paddies to contain production cessation to weeks rather than months. Moreover, employee relocation constraints imposed under COVID-19 restrictions resulted in further expenses, which had to be offset by profits from recently acquired businesses and the sale of non-core assets (SunRice, 2021). As Disparte and Tillemann (2020) note, developing a new system from scratch is not feasible in crisis conditions. Overall, the company has executed a series of thought-out decisions and mitigated the crisis thanks to its extant tools and creative approaches.
In 2021, SunRice faced numerous challenges related to climate change and supply chain stress related to the low price growth in Australia and the consequences of the COVID-19 pandemic. These challenges significantly disrupted global shipping lines and caused difficulties in achieving the needed production levels. However, the company operates a resilient supply chain network, with numerous points of rice sourcing and a diverse global market, which allows it to withstand the challenges. For instance, it has combated the consequences of climate change on the Australian-based production, managing to meet demand by employing other sources. Moreover, SunRice somewhat succeeded in overcoming the effects of the pandemic, which included inventory’s unexpected exhaustion due to increased demand, by carefully managing its stock.
Bag, S. et al. (2020) ‘Big data analytics as an operational excellence approach to enhance sustainable supply chain performance’, Resources, Conservation and Recycling, 153, p. 104559.
Bairagi, S. et al. (2020) ‘What drives consumer demand for rice fragrance? Evidence from South and Southeast Asia’, British Food Journal, 122(11), pp. 3473–3498.
Chandio, A.A., Magsi, H. and Ozturk, I. (2020) ‘Examining the effects of climate change on rice production: case study of Pakistan’, Environmental Science and Pollution Research, 27(8), pp. 7812–7822.
Dev, N.K., Shankar, R. and Qaiser, F.H. (2020) ‘Industry 4.0 and circular economy: operational excellence for sustainable reverse supply chain performance’, Resources, Conservation and Recycling, 153, p. 104583.
Disparte, D. and Tillemann, T. (2020) ‘Supply chain management, in The great correction. Washington, DC: New America, pp. 24–26. Web.
Lim-Camacho, L. et al. (2017) ‘Complex resource supply chains display higher resilience to simulated climate shocks’, Global Environmental Change, 46, pp. 126–138.
Norris, W. et al. (2020) ‘A market-oriented approach to supply chain security, Security Challenges, 16(4), pp. 65–81.
Perkins, K.M., Toskos Dils, A. and Flusberg, S.J. (2022) ‘The perceived threat of demographic shifts depends on how you think the economy works’, Group Processes & Intergroup Relations, 25(1), pp. 227–246.
SunRice (2021) SunRice annual report, pp. 1–145. Web.
Weiszegger, W. (2020) ‘Operational support’, in Implementing the UN Management Reform: Progress and Implications for Peace Operations. New York, NY: International Peace Institute, pp. 12–16. Web.
Zimon, D., Tyan, J. and Sroufe, R. (2020) ‘Drivers of sustainable supply chain management: practices to alignment with UN sustainable development goals, International Journal for Quality Research, 14(1), pp. 219–236.