Combating Nut Theft in California

This assignment explores the issue of rising nut theft in the California nut industry. It examines the impact of this theft on farmers, companies, and the US economy. The analysis suggests several recommendations, including implementing secure transportation systems with tracking devices, enhancing communication channels between stakeholders, and acquiring insurance policies that cover non-violent thefts. The document also presents a table illustrating potential cost savings through these proposed measures.

Running Head: QUANTITATIVE CASE STUDY
CALIFORNIA NUT INDUSTRY THEFT QUANTITATIVE STUDY
Student’s Name:
Institution Affiliation:

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Introduction
California is the leading commercial producer of almond, pistachios, and walnuts, with
United States being the global producer commanding a market share of about 80% of the total
world’s production. The consumption rate has also increased on an average of about 2.17 pounds
per person in the year 2016/2017 crop year. The products are consumed either as ingredients of
the manufactured products such as granola bars or as snacks (Rehm & Drewnowski, 2017).
California nut farming and the processing industry contributes about $7.6 billion and $3.4 billion
respectively to the United States of America The nut products does not only attract consumers
but also criminals that have made the California nut industry run into losses due frequent number
of nut thefts. In 2013, about 35 truckloads of almonds, pistachios, and walnuts worth $10
million disappeared in California while in 2015 a truck driver whose paperwork was iffy
vanished with products worth $450,000. Many criminals are hacking the company’s system and
trick the farmer’s representatives of the nut industry, thereby collecting almonds from them
before disappearing. These thefts have been rampant in the past years and have caused the
farmers and the company loss of millions of shillings in every year that eventually affect the
economy of the United States since most of the stolen product end up in the black market. The
paper examines the impact of the of the nut theft in California and further provide the analysis of
the situation, by covering the amount of the loss, the weak points favoring the theft process and
recommendations on how to limit the theft cases.

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California nut industry Supply Chain
The supply chain is the business designed process to enable the collection and delivery of
raw materials from the farmers or suppliers for processing and then delivery of the product and
services to the designated customers. The process entails, farmers, transporters, manufactures,
suppliers, warehouses, retailers, and customers, therefore proper management of the supply chain
ensures that the products reach the customer at the correct time. Below is a diagram representing
the California Nut Industry Supply Chain.
Figure 1shows supply chain of California Nut Industry
The California nut industry supply chain starts from the farm, where the productions of
the nuts happen. California State is the main grower of commercial nuts; however, nut farming
also happens in other counties thus imported into the United States for processing. The imported
nuts are always shipped into the United States and collected by a designated transport company
or the California Nut industry Company, while those grown in California are collected by

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California’s nut industry drivers upon the farmer making an order of the ready harvests through
making a call to the California nut industry procurement office. The head office then releases
trucks and drivers to collect the nuts from the farmers and deliver them to the factory for the
drying in hot air roasting process. The roasting is essential as it changes the flavor profile of the
nuts resulting in a brownie, crunchy texture. The roasted taken for the mechanical extraction of
the shells, and the hull removal through the sorting machine. The kernels are packed in cartons
for the delivery in various points of the world; the deliveries are always done through shipping to
multiple suppliers and warehouses, point where the shipments are hijacked too before reaching
the designated owner.
Vulnerabilities of the California Supply Chain
The main vulnerable points in the supply chain that foster nut thefts are at the farms,
airports and on the roads during transportations. Most of the nut thefts result from the fictitious
pickups, during the transportation from the farmer or at the airport to the industry. These
criminals either rob the trucks at gunpoint or impersonate as the company’s official drivers, or
lower the farmers or the clearance officers at the airport to release the products only to be later
realized that landed on the wrong hand. The criminals exploit the advantage of the remoteness of
the farmers who are easy to pull out with fake identifications, and the technological advancement
whereby a request for the collection of the harvest, through phone calls and laptops as reported
by Visalia Times-Delta (2014).
Through the technology, the criminals can hack and make fake documents, driving
license and any other required document to enable them to impersonate. The criminals hijack the

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database of the transportation department and get information regarding the points of collection,
track number, and time. Using such information, the criminals either impersonate as the
companies officials or hijack the trucks on their way back to the company after collection and
disappears. The products such as walnuts do not contain the serial number and RFID tag that
makes tracking to be easy. The inability of tracing the stolen nuts through internet and high rate
of consumption makes it difficult for the company to curb the heist as many cargos get lost in the
black market.
Table 1 shows the value of California nut industry
products Average amount in $
Almond 5 billion
Pistachios 1 billion
walnut 1.5 billion
others 1.3 billion
Average value 8.8 billion
Table 2 shows total cost of nut theft to the California nut industry
years Amount
2012 1.1 million
2013 2.4 million
2014 9.6 million
2015 4.6 million
2016 1.8 million

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Total Cost 19.5 million
Table 3 shows the cost of nut theft at specific point of supply chain in 2015
Points on the supply chain Places of incidents Amount lost($)
From the farmers In Tulare County $ 300,000
In Stanislaus county $ 150,000
California central valley $ 400,000
At Gold Rivers Orchard $ 400,000
Yuba city $ 50,000
Processing plants At Sunnygem processing
plant
$ 180,000
At the airport $ 200,000
Total Amount lost $ 1,680,000
Recommendations
Cargo theft is something that if not controlled by the company then collapse might be
experienced since it takes almost a year for the crops to ripe, and the time difference in the
unavailability of raw material causes the production process to slow down. According to Western
Farm Press (2013), the high rate of California nut theft is high because of the tracking inability at
the collection point of the nuts from the farmers. The nuts don’t always contain tracking devices
such as a serial number that will ease internet tracking like in other electronic products. To

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control these activities, the company management must ensure that the system they are using is
encrypted so as the criminals cannot be able to crack and retrieve information.
California Nut Industry should also contract another transportation company that has the
security protocols to do the collection and supply of the finished products. Companies such as
Road Scholar Transport offer collection and deliver services on a daily basis, and have security
measures placed to curb the cargo thefts. The company has Real-time satellite tracking that
enables to locate the movement of the tracks from the office. The tracking system will show the
office whenever the tracks make wrong directions, make inappropriate stops and even when
moving at inappropriate speed (Lin, 2018). The information will help in securing the cargo from
being hijacked on the way. In case of a hijack, the company is capable of locating the track
through the help of the facility security personnel and the anti-crime department.
The tracks also have electronic door monitoring and navalock that cannot be opened after
the package of the nuts from the farmer, and only get opened at the designated place through
electronic process. A forceful attempt of opening the door, or opening the door inappropriate
time, raises the alarm in the central office. The company should also train the farmers on how to
verify the documents presented by the drivers, for example calling the central office for
confirmation before releasing the products.
The company in collaboration with the farmers buys insurance policies that cover theft
from Real estate firms, retirement funds, and insurance companies. Such thefts are not always
compensated as most happen without violence, and the insurance cover for the company does not
guarantee such loss. Having that policy will reduce the amount of loss in such cases.
Table showing the cost cut if the recommendations are adopted

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Recommendation type Cost of the services Cost of the
product
Amount saved
Road Scholar Transport
Company
$ 30, 000 Per delivery for 50
tons
$ 400,000 $ 370,000
Insurance company Three quarter refund on nut
theft without violence with
monthly insurance cover of $
10,000. For example goods
worth $400,000
$ 400,0000 $ 300,000
Expected loss without
recommendation
$ 800,000
Expected save with
recommendations
$ 670,000
Expected loss with
recommendations
$ 30,000
Conclusion
Cargo theft has always been high on electronic equipment that is easy to track and
recover. However, the rise of food theft such as that faces California Nut Industry makes it
difficult to track and recover the lost items since they do not contain tracking devices. The high
rates of nut theft have disadvantaged farmers, the company, and the economy of the United

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States. The loss of revenue calls for proper supply management channel on specific points such
as in the airport, at the farmer’s collection unit, on the roads and during delivery of the products
to warehouses.
California nut industry needs to take into account the security measures on the transport
system, both the communication channels and use of trucks with tracking devices will help in
reducing the nut thefts. Additionally, the company should also acquire insurance policies that
cover non-violence thefts to minimize the amount of loses per year. With the application of these
recommendations, the company will not only eradicate nut theft but will also cut the cost in case
of the unfortunate.
References