Theft in Supply Chain: Impact on Californian Nut Producing Industry

This article discusses the impact of theft in the supply chain on the Californian nut producing industry. It explores the PESTEL analysis of the industry and the preventive measures taken to mitigate theft. The article also examines the economic, social, technological, environmental, and legal factors that affect the industry. Additionally, it analyzes Porter's five forces model to understand the industry's competitive landscape.

Running head Theft in supply chain 0
Californian nut producing industry

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Contents
Introduction......................................................................................................................................2
Background......................................................................................................................................2
PESTEL...........................................................................................................................................3
Porter’s five forces model................................................................................................................5
Prevention........................................................................................................................................7
Summary..........................................................................................................................................9
Reference.......................................................................................................................................10

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Introduction
California is the major nuts growing state of U.S, and it comes on second in the world for
producing pistachios and walnuts. The California industry of nuts and fruits consists of the
farming of Grapes, almonds, pecans, pistachio, and many other fruits also. More than 99% of the
walnuts in U.S are grown in the fertile soils of California's valley. California deals in majorly
four nuts that are almond, pistachio, pecan, and walnut. California supplies approx. 98%
pistachios to the nation. And Pecans is the nut which is grown in California and it is a native nut
of the United States. Almond is the most popular nuts of California (Clausnitzer, et al., 2016).
In this report, PESTEL analysis of Californian industries will be discussed and how they
are affected because of theft in supply chain. The analysis of five forces is done for the
commodity industries that are suffered because of theft. To prevent the theft few organizations
took the preventive measure for eliminating large scale theft during the process. For preventing
theft, business level resources and capabilities were required by the affected companies. The
strategies are required by the companies to make their business more strong and eliminate theft
during the supply chain.
Background
California nuts industry produces almost $9.3 sales in a year. It was analyzed that the
production of almonds contributes more than $21 billion per year to the economy. The prices of
nuts such as almonds, pistachios, walnuts and much more had increased with the growing
demand. It was seen that the production of almonds contributes more than $21 billion per year to
the economy (Yada, et al.,2013). California nuts industry has made its tradition to produce a
healthy, safe, quality food product for worldwide customers.
It is a curious case that walnuts and pistachios are disappearing in California. Majorly the
cargo thieves are damaging the supply of nuts. Thefts in supply chains process are taking place
by the criminals, employees or even the stakeholders who were involved in the process mostly
truck drivers. Cargo theft is a major issue in California's industry (Duchelle, et al.,2011). During
the cargo process, the supplier is facing the issue that the products are not reaching the final
destination. Thieves are targeting the areas more frequently to theft the products. A large number

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of thefts are happening because of the cargo of approx. $300000 per incident. Majorly thieves
are posing as they are drivers of truck-load of the nuts and instead of delivering the nuts to
buyers; they divert the entire shipment to the black market and make the massive profits. The
various industries are suffering because of theft as the water consumed in agriculture is almost
90% of the nation. Industries are improving the safeguard for thefts and also increasing the
securities on various points and also made a plan to create a task force in cargo theft (Chen and
Fan, 2012). Petty thefts of nuts are also very common in central California. Crain theft also took
place in stealing the nuts in California as they are committed by the person who knows about the
trucking businesses, identity theft, and computer security. Thieves are having a long chain for
stealing the nuts from farms to retailers. Criminals are insightful in the long chain between the
buyer and sellers, also setting of fictitious companies for stealing, altering paperwork and
diverting the shipments of nuts (Prokopets, 2014).
PESTEL
California nut industry has been targeted by many international crime gangs to steal the
almonds and pistachios during the shipments which are worth to millions. Thieves are using fake
IDs to stop the truck loaded trucks of nuts. As the demand for nuts is increasing and remains
high globally is the main reason for theft. California produces almost $9.3 billion worth nuts
yearly. PESTEL analysis is done to analyze the macro environment of the industry. PESTEL
includes the factors which are political, economic, social, Technological, environmental and
legal which has an impact on the industry. If any changes took place in the macro environment it
has a direct impact on the industry but also on the other industries that are linked with the nuts
industry (Walker and Jones, 2012).
Political factors that impact California’s Nuts industry
Political factors play an important role in analyzing the impact on industries profitability
for the long term in the market. As California is producing and operating industries of nuts on
large scale and supply the nuts to other countries, so in that process they deal with the different
types of political environment and the risks associated with them(Manuj and Mentzer, 2008).
During the supply of nuts to other countries, the California nut industry faces many political
issues before entering and investing in other country markets by taking a risk. Legal frameworks

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are required for contract enforcement. Trade regulations and tariffs are applied with are related to
the materials. Taxation is an important factor, the tax rates and the incentives of the country
effects on the industry (Hendrickson, et al., 2015).
Economic Factors that impact California’s nuts industry
Economic factors which had an impact on the industry are inflation rate, interest rate,
foreign exchange rate and the cycle of economic help in determining the aggregate demand and
the investment in an economy are the macro-environmental factors and the micro environmental
factors are the competition norms that impact on the competitive advantages of the industry
(Pickles and Zhu, 2013). California's nuts industry should consider the economic system of the
country for the supply of the nuts. For the supply of nuts to different countries, the exchange
rates and the stability should be considered as they impact on the economy of the hosting
industry. The inflation and interest rate to be considered for the supply of goods to another
country as it will help in analyzing the performance. Every nuts theft is not only affecting the
farmers and producers and it also impacts on the state's economy (Cousins, et al., 2008).
Social Factors
In the environment, the culture of the society and the way of doing things impacts on the
organization's culture. As society shares the beliefs and attitudes which affect the market so it is
important to analyze the culture of the society. The areas are selected after analyzing the shared
beliefs and attitudes of the population. California’s nut industry and the commodities should
analyze the demographics and the skills of the people who are associated with the industry
(Reynolds, 2010). The culture of the country is important for the people. They should take the
entrepreneurial spirit for growing and securing the supply of the nuts.
Technological factors
As we are aware that how the technological landscape changes are taking place and how
they are impacting the markets. It includes a different and innovative way of producing and
supplying goods and services (Lambert, et al.,2008). As industries are transforming fast because
of the technologies and it is necessary to adopt the latest technology to produce the products in a
different way. The impact of technology involves the development by the industry and the

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impact on the products offering to customers (Conlon, 2016). California’s nuts producing should
adopt the technology for production and for supplying the products. The impact on the supply
chain of the products as the thefts is increasing day by day by the criminal gangs.
Environmental factors that impact California’s nut producing industry
Each market has its own norms or environmental standards that impact on the profits of
the organization. The factors to be considered before entering in market, the environmental
factors must be considered foremost like the weather, Laws regarding the environment pollution,
attitudes in support for renewable energy. The nuts industry must consider the climate for
producing the different varieties of nuts and the places where they are supplying as the climate
has an impact of the nuts also.
Legal Factors
An industry has to evaluate the legal framework of the market before entering into it. The
various laws associated with producing and supplying the products. The discrimination law,
employment law, data protection, law of health and safety. Several laws were made for the theft
and increasing the export on a large scale(Burges, 2012). It is important for the grower/
distributors of California as the theft is affecting their production and profitability every year.
The legal laws and regulations are set up by the councils to prevent theft and selling the nuts to
other countries on a large scale. Laws are formed for investigating the transport companies for
preventing thefts in the state.
Porter’s five forces model
The five forces model determines the structure of the industry and its competitors of that
industry. If the competitive forces of the industry are stronger in the industry it states that it is
less profitable. It helps in identifying the power of the industry in the market. it helps in
analyzing the position of the industry in the market. The forces are:
The threat of New entrants: when the new entry comes in an industry, it comes with the
innovation, the way of doing things will be new, it will be a threat for the existing firm. It will
decrease the profitability of the business. When the entry in the industry is easy then new

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entrants will be more and the profitability will be low in that industry. In California, industries
are producing nuts on a large scale and supplying to other countries. New entrants from different
countries who are producing nut will enter the market. As California’s nuts producing industry
were worried about the pistachio competitors from Iran are taking place in supplying of pistachio
globally. They are giving tough competition to California’s industry. Iran has started their sale in
large quantities to China. It became a competition for them.
Bargaining power of Suppliers
It is an assessment of the power of suppliers that is easy for them to raise the prices of the
products. Suppliers who are producing the products have the power to raise or lower the prices
after researching the market conditions and the number of suppliers in the market (Ekwall and
Lantz, 2016).
A large number of farmers are growing nuts and supplying to the industry for exporting
to other countries. The way of growing nuts is different from each other and uses the best
technique so that it will attract more customers.
Bargaining power of Buyers
The bargaining power of buyers is how the buyers help in driving the prices down. It is
affected by the number of buyers, the importance of each buyer for the organization, and the cost
when the buyer is switching from one supplier to another supplier (Yüksel, 2012). The sale of
nuts to different countries may be affected by an increase in suppliers. Theft of nuts is causing
the demand of the nuts as the thieves are stealing the nuts and selling it to the black market and at
the farmers market.
The Threat of Substitutes
In the market, when the close substitutes are available in the market the customers have
more alternatives of product in response to when price increases. Numbers of industries are
producing nuts in California, so when one organization increases the prices of nuts it may affect
the sale in the market as the customers will buy the products from a different place.
The rivalry between Existing Companies

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The competitors in the market are the main driver of running a business. When the
competitors in the market are offering undifferentiated products and services, it may decrease the
market attractiveness. The more the competition the less will be the profit proposition for the
industry. For increasing the sale on a large scale company should produce the best quality
products as it attracts the consumers on a large scale.
Prevention
The preventive measures took by the various organizations to prevent theft in California
during the supply of nuts in other countries. It is important to take action against the thieves as
the cases are increasing every year.
Emergency Nut Theft Summit in Visalia, California
It is a trade group of the processors who brings the insurers together, and the processors,
growers, shipping companies and the law enforcement together to take the action against the
thieves and prevent theft in the industry. They had increased the awareness and vigilance about
the theft and making the industries aware of the issue. Majorly the theft has taken place in rural
fields (Rothaermel, 2013). The awareness they had made is to encourage the growers and the
farmers to take and think of various security when they take any decision.
Protective security measures
The thefts are taking place when they are grown by the farmers on the ground and the
grounds are not completely fenced and the gates are not placed properly. It is important to fence
the place and put the gates on the main entry and exit and should be always locked to prevent the
theft. Now advanced technology has taken place and it is cost effective also. At main gates,
inexpensive sensors can be placed at gates so that they can alert the owner when someone tries to
open the gate at an unusual time of the day. Also, CCTV cameras may serve and prevent
theft(Lynch, 2005).
Supply chain controls
To prevent the theft it is important to control and manage the supply chain of exporting
the nuts to other countries. To detect the thieves during the supply are dealing with the truck

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companies by suspecting and taking the thumbprints of drivers and inspecting carefully the
shipping paperwork (Danyluk et. al., (2007). And in some countries, the buying and selling of
nuts have to provide the certificate as proof of ownership with the details from where and when
they have sold or purchased. Companies have made the code and also placed the agents for the
identification and protect the nuts from theft.
Agricultural Crimes Units
It is important to detect and catch crop thieves. In California, industries have Agricultural
crime units who investigate agricultural thefts by investigators (Johnson and Cody, 2015).
Private investigators use their skills with the security expert to investigate the theft and help in
analyzing the security problems and will make the practical and provide the recommendations
for cost-effective security.
In order to make the business on large scale and make it more profitable it is important to
prevent the theft. Companies are taking tailoring insurance coverage as a solution for the post-
loss as the nuts are valuable, the truckload full of nuts which are almonds, walnuts and pistachios
are averages of $100-500k (Govindan and Soleimani 2017). And the demand for nuts is very
high because of health benefits.
Precautions should be taken by the growers and distributors to prevent theft. Distributors
can develop a good relationship with the transport carriers for transferring the nuts to other
countries so that the loyal truck drivers pick the loads to transfer the nuts. It is important to make
the security in computer systems so that the details will get hacked easily by the thieves. Track
the transport carrier on a regular basis by the various tracking facilities and ensure to get the
driver's license number and thumbprints (Klonsky, 2010). It is important to take the 360o
approach to manage the risk during cargo theft. In order to prevent theft, the truck should not be
parked in the dark as many of the cargo theft happen at that time. Installing tracking devices in
the truck will help the distributors. As crime groups use sophisticated technologies to hack the
trucks and take benefit. In order to prevent theft, the industries are hiring the highly educated and
experts in computer security who have the knowledge of agriculture and the trucking sectors.

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Summary
In order to conclude, the California nuts industry is growing and producing nuts on a
large scale in the world. The companies who are dealing in this sector should adopt the strategies
and ideas to make the business on large scale by exporting more goods and taking the prevention
for the theft taking place at various stages of the supply chain. Growers should adopt the best
technology for growing and keep the security of nuts. Fencing should be properly maintained
and gates must be placed at the entry and exit of doors. The transport facility via the goods are
exported should be trustworthy and the security should be adopted for the supply of the nuts to
another country. Growers and distributors must do every possible at their end to ignore the theft
situations by ensuring the best shipment, warehousing, and cargo services. The strategy they can
adopt is increasing the efforts in informing the public about the products. It is observed that the
major theft has been done by the truck drivers so for decreasing the theft the proper investigation
must be done.

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