mathew thompson adding value through the supply chain: the missing link?

Mathew Thompson

Adding Value through the Supply Chain:

The Missing Link?

Content

•Globalisation and Traceability

•Importance of Effective Supply

•Effective Technology

The times are a changing - and the pace of that change is very fast, so unless you are growing with it, it is unlikely you will

survive

Globalisation & Traceability

… is giving “inter-dependence”and “inter-connectiveness”

Market Potential

Perishable Products- cost of production remains consistent- opportunity to supply is variable

Therefore failure to supply results inlost revenue

CONSUMER

RETAILER RETAILER RETAILER RETAILER

M M M M M M M M M M M M

ING ING INGING

IP IP IP IPIP

F F F F F FF F F F F FF F F F F FF F F F FF

Failure of Effective Supply

- Dioxin Incident

- Sudan I Dye

- Foot & Mouth

- BSE

Importance of Effective Supply

Analysis of the Existing Supply

ChainMissing Link

Importance of Effective Supply

Importance of Effective Supply

Importance of Effective Supply

Market Surveillance

• Assess QA Product on the Market

• Feedback Reports to Source

• Specific Product and Supply Chain Trials Run

• Same Day Response•Problems Identified

• Quick and Accurate

• Supported the Diary System

•Laboratory Test Confirmation

Typical Problems Identified

Market Surveillance

Flowers on the Island

Growers storage

Flowers transported to UK depot

Flowers are transported to market

Flowers are sorted against invoice (and conveyed to Wholesaler)

Collate Orders

Product Displayed

Stock take of Product

Additional Product Storage

Retailer / Customer

20 Days Shelf Life

17 Days Shelf Life

15 Days Shelf Life

13 Days Shelf Life

FactorsTime

TemperatureHandling

Pest & DiseaseWater QualityStem Quality

ScoreModellingATP Work

Market Information Feedback Loop

Importance of Effective Supply

Success of Effective Supply

- Market Economics

- Supply & Demand Matched

- Improved Quality

- Increased Knowledge

- Use of Feedback Information

- Ability to Trace

Importance of Effective Supply

Business Impact

Example of Supply and Demand Information

QA Product Non QA Product

Product Price Range (£)

Assumed Avg. Price

Price Range (£)

Assumed Average Price

Increase for QA

Price Benefit Opportunity

Lo Hi (£) Lo Hi (£) % (£)

50 - 60 cm Roses 1.25 1.75 1.50 0.80 1.25 1.025 46.3 0.475

Freesia 1.75 2.50 2.125 0.75 1.50 1.125 88.9 1.00

40 cm + Freesia 0.35 0.40 0.375 0.25 0.30 0.275 36.4 0.10

Spray Carnations 0.75 0.75 0.75 0.50 0.75 0.625 20.0 0.125

Importance of Effective Supply

Supply Relationships between Various

Types of Food Businesses

Food processor / manufacturer

Source Auction Hall

Customer “Seller”

Importance of Effective Supply

Reducing the Risk

Risk Management& HACCP

Raw MaterialMonitoring

ProcessImprovement

In-processAutomatic Inspection

ProductInnovation

ProcessInnovation

To Leap-Frog Risks

How Technology May Help

Benefits - Information Service Design

Precise

Accurate

Reliable

Timely

Information

Audit System

Telesales

DiaryDesign Decision

How Technology May Help

The Philosophy

“…have we done all we can…”

If something goes wrong, are we sure that we can identify all affected product?

“…to become price makers

rather than price takers.”

• Ensure business opportunities are market led

• Strategically Drive Up Sale Price

• Promote the Identity of Quality Assured Product

• Improve Product Returns for the Chain

• Improve Strategy for Supply and Demand Picture

• Market Knowledge

Prove you have “controlled it”

Conclusions