Supply chain analysis: the five themes for business success
The red meat supply chain, in some areas, is world class, but there are others which can benefit from improvements. The hard part is knowing where to start. Ed Bedington reports on the latest document published by the Red Meat Industry Forum to make
the process easier
Ensuring good, cost-effective service in any supply chain is never easy, and the red meat sector is certainly no exception. That said, those in the know claim that in some areas, the red meat supply chain sets the standards.
The problem lies with the other areas, where it is not setting those standards, that drag it back down. "The red meat supply chain has some world class attributes," said Paul Jose, operations manager from the Red Meat Industry Forum. "That they deal with such a level of demand amplification while handling perishable goods, yet deliver on time, is world class."
However, previous work by the RMIF, in conjunction with Cardiff University, the Food Chain Centre and industry think-tank IGD, has shown there is potential to save at least £500m a year throughout the UK industry. "Supply chain performance is one area where the red meat sector can make huge improvements, particularly in terms of information through the chain," said Jose.
While the scale of the problem and scale of the opportunity has been known for some time, ways in which to tackle the issue have been less clear.
The RMIF is now stepping up to the challenge and has produced a new document aimed at giving the industry the chance to break the problem down and develop suitable ways to apply the knowledge to their businesses.
The new document, entitled The Whole Chain: aligning the five themes for business success, is aimed at addressing that situation. "We've done value chain analysis and found a lot of opportunity," said Jose. "If anything, we found too much. When you dig up so much opportunity the issue effectively becomes: Where do you start?"
He said the value chain analysis, while good at addressing the scale of the problem, is like using a sledgehammer to crack a nut. "Anyone can read the case studies, but they don't tell you where to start either."
The new pack summarises all the analysis and work done by the RMIF and its associates and acts as a simple introduction to whole chain improvements, encouraging businesses to think about ways in which they can improve their operations. It breaks the concept down into five themes that every business in the supply chain should consider.
All of the themes are interlinked and, applied correctly, ensure the chain works together as efficiently as possible. Businesses need to focus on getting the balance right between the themes - at the moment, they are stronger in some areas than others, said Jose. "Good supply chains have a number of attributes, but the ones that are really good have all those in balance. For red meat, being flexible, delivering on time and achieving carcase balance are all areas where they are excellent, but in terms of levels of relationship management or communication of needs, they're not so good."
The RMIF document gives practical advice and information on how companies can apply the themes to their businesses, but it does not have all the answers, Jose is quick to point out. "We'll be the first to admit people can pick holes in what we've done. There's no easy solution, or magic bullet. If there was, people would be doing it. The purpose of this document is to stimulate thought - which areas are you getting right in your business?"
It also encourages industry feedback, and includes questionnaires and feedback forms to allow the RMIF to get to the root of the issues the sector faces. Jose said: "We hope that will give us more areas to focus on. It's about listening to the industry to see where they need help."
The five themes are:
1 The Deal - this addresses what your customers value and what they are prepared to pay for, said Jose, adding that each component of the chain has different requirements. So while it is vital to keep an eye on the consumer, it is also
important to meet your immediate customers' needs: "Farmers delivering dirty animals to the slaughterhouse means that the farmer isn't considering what the processor wants," he said.
2 Flexibility - This looks at the need to adapt to market requirements and the importance of planning to deal with the unexpected. Jose acknowledged that demand amplification is never going to be eliminated, but said the industry can work harder to reduce its impact.
3 Communication - The whole chain needs to get better at sharing information, which in turn will help improve planning and trust within the sector, said Jose.
4 Control - This focuses on the importance of planning and producing for what the market wants, not what companies think it might want.
5 Relationship management - This looks at whether businesses are recognising and
treating the needs of their customers properly. Everyone in the supply chain has customers and are, in turn, customers, so building good relationships is vital.
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