supplier/buyer relationships incorporating regional farms in the supply chain aspen institute...
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Supplier/Buyer RelationshipsIncorporating Regional Farms in the Supply Chain
Aspen Institute Business Education SymposiumOctober 2014
Deishin LeeBoston College
Small to mid-sized
farms
Regional market
Where we live
Tomatoes
CA + FL = 67%
Broccoli
CA = 90%
Lettuce
CA + AZ = 98%
DC
DC
Store
Store
Store
Store
DC "Breaks bulk"
DC
Store
Store
Store
Store
DC "Breaks bulk"
Economies of scale•High volume•Low variety•Steady processing rate
DC
Store
Store
Store
Store
Economies of scale•High volume•Low variety•Steady processing rate
Regional small and mid-sized farms•Low volume•More variety•Seasonality
DC
Store
Store
Store
Store
Economies of scale•High volume•Low variety•Steady processing rate
Regional small and mid-sized farms•Low volume•More variety•Seasonality
Challenges•Logistics•Retail ordering
DC
Store
Store
Store
Store
Why should we care?
Economies of scale•High volume•Low variety•Steady processing rate
Regional small and mid-sized farms•Low volume•More variety•Seasonality
Challenges•Logistics•Retail ordering
Improving Regional Farm Viability
• Operations and Supply Chain Management:• Forecasting (e.g., sharing long-term demand information)
• Logistics (e.g., backhauling, scheduling)
• Regional aggregation (e.g., Red Tomato)
• Overhead functions (e.g., regulations/specifications, packaging, cold chain handling)
• Marketing• Differentiating the product
Segueing into the Classroom
• Understanding what is challenging
• Upfront costs vs. Uncertain future benefits
• Economies of scale vs. Economies of scope
• Analysis vs. Decision-making
17
© Willy Shih
Economies of scale:Monoculture
Economies of scope:“Three sisters” polyculture
18
© Willy Shih
Segueing into the Classroom
• Understanding what is challenging
• Upfront costs vs. Uncertain future benefits
• Economies of scale vs. Economies of scope
• Analysis vs. Decision-making