The document provides background on Professor Andrew Fearne and summarizes his work as the Adelaide Thinker in Residence focusing on sustainable food and wine value chains in South Australia. It discusses value chain thinking and management. It also analyzes South Australia's food and wine value chains, identifying challenges and opportunities. Professor Fearne provides 5 recommendations: 1) developing a global thought leadership program, 2) generating integrated market intelligence, 3) developing a holistic food policy, 4) reviewing education and training for the industries, and 5) creating regional co-innovation clusters. The executive summary concisely outlines the key points covered in the full report.
3. Andrew Fearne
Andrew Fearne
Professor Fearne’s integrated chain Partners in the residency:
analysis research system and style of
communication has been particularly • Department of the Premier and Cabinet
effective during a period in the UK food • Primary Industries and Resources SA
and beverage sector when assaults to • Department of Trade and Economic
public confidence in food products from Development
livestock disease outbreaks demanded
system change. Growing up on a family • Department of Health
farm and his early career role as an • University of Adelaide
economist with the National Farmers • University of South Australia
Organisation in the UK were formative • Yalumba
and influential stepping stones to an
academic and consulting career which • Constellation Wines Australia
has been consistently transforming • TARAC Technologies Pty Ltd
under-performing supply chains into • AMCOR Australasia
value chains by focusing on consumer • Barossa and Light Regional
preferences. Development Board
Professor Andrew Fearne is Director of the
Centre for Supply Chain Research at Kent • Meat and Livestock Australia
Business School, University of Kent. He is His research and facilitation activities
have involved the strategic analysis • Department of Education and
an expert on food marketing, consumer
of consumer behaviour and the co- Children’s Services
behaviour and supply chain management.
An economist by training, Andrew moved ordination of agri-food supply chains • Zero Waste SA
into the area of supply chain management with clients and research partners from • Sustainability and Climate
because of an interest in an area of around the world. Change Division
growing importance not usually covered
by economists. Professor Fearne is the founding editor
of the International Journal of Supply
During the past twenty years he has been Chain Management, author of over 100
researching consumer requirements and articles, and editor or contributor to over
expectations in a wide range of food a dozen books on industry values chains
supply chains in the United Kingdom, and related matters.
shedding light for farmers, processors
and retailers on the changes needed to
lift agribusiness performance in supply
chains and the consumer food experiences
in supermarkets into better value chains
for stakeholders and better and safer
eating experiences for consumers. He has
also worked in France, Ireland, Slovenia,
Germany, North America, the Middle East
and South-East Asia.
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4. Andrew Fearne Sustainable Food and Wine Value Chains
Foreword
Foreword
South Australia is globally renowned This not only enhanced his understanding
for the quality of our food and wine, of South Australia’s agri-food sector, it
and these industries remain our State’s also enabled him to better identify the
biggest employer and among our largest challenges and opportunities facing our
export earners. primary producing regions.
However, the impact of climate change His message is a confronting one for our
and rising living and production costs, food and wine industries – adapt, or risk
along with the growing demand for extinction.
healthy eating and more sustainable
consumption, means the sector faces We must embrace improvement and
significant challenges. innovation to ensure we remain globally
competitive, which is why the State
During his term as an Adelaide Thinker Government established the SA Food
in Residence, Professor Andrew Fearne Centre at Regency Park, the first facility of
brought his vast international experience its kind in Australia.
to help improve the processes that
deliver food and wine from producers to Professor Fearne’s final report also
consumers. highlights the enormous potential that
exists, and the key steps we must take in
Professor Fearne’s residency focussed on order to position South Australia as the
assisting local food and wine businesses leading innovator in Australian food and
to better understand the importance of wine.
value chain thinking – to ensure we value
add to our products, and maximise our I thank Andrew for his work and his
sustainable competitive advantages. contribution to our State, and I commend
this final report to you.
He emphasised the need to work
beyond traditional boundaries, and
challenged the conventional thinking of
organisations and individuals.
Professor Fearne spent time working
closely with regional communities –
in the Barossa Valley, Riverland, Eyre Mike Rann
Peninsula and South East – where he met Premier of South Australia
with farmers, fishers, growers, packers, August 2009
producers and retailers.
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5. Contents
Contents
Executive Summary 5
Introduction 7
Value chain thinking 8
Value chain 8
Value chain management 10
Value chain analysis 13
Life cycle thinking and the value chain 14
Demonstration projects 16
Value chain management in practice – insights from around the world 17
An analysis of South Australia’s food and wine value chains 23
Contextual challenges 23
Diagnosis 24
Grasping the opportunities – the process of adaptation and 28
the role of government
Primary Industry and Resources SA (PIRSA) 29
Department of Trade and Economic Development (DTED) 29
Education – Department of Education and Children’s Services (DECS), 30
Department of Further Education, Employment, Science and
Technology (DFEEST)
The ‘Alliance’: SA Health, Sustainability and Climate Change Division – 31
Department of the Premier and Cabinet, and Zero Waste SA
Regional Development Boards 33
Recommendations 34
Acknowledgements 37
References 38
Further Reading 40
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6. Andrew Fearne Sustainable Food and Wine Value Chains
Executive Summary
Executive Summary
disciplinary and functional silos, as evident
in government as they are in business.
Achieving the requisite change in mindset
that constitutes the first steps on the road
to sustainable competitive advantage has
been the greatest challenge I have faced
in this residency. It is likely to prove one of
the greatest challenges in the future, so
embedded is the supply chain paradigm,
in government and industry alike, in
strategic planning, policy making, program
development and the delivery of products
and services.
Recommendations
‘When you stand back and face your issues, a In considering my recommendations, of
which there are five, I have been mindful
glimpse of light falls on the face in the shadow.’ of the depressed economic climate and the
need to ‘do more with less’, which is, after
Rabbi Lionel Blue all, consistent with value chain thinking!
These recommendations are summarised
Sustainable value chains are those in There is no reason why South Australia
below and explored more fully in the main
which collaborative relationships facilitate could or should not position itself as the
report.
the effective flow of information, to innovator in Australian food and wine.
enable rational decision-making and Indeed, it already has an international
1 Thought leadership
effective resource allocation, for the reputation for excellence in some
benefit of the chain as a whole. Value sectors – for example, viticulture and
chains can only be sustainable if chain aquaculture. However, to develop a I believe that there is a serious lack of
members are in tune with and responsive sustainable competitive advantage, South understanding of value chain principles
to the needs of their customers, the wants Australian food and wine businesses must amongst senior managers, in both
of final consumers and the complex devote more resources to penetrating government and industry. What is needed
interaction between what they do, how higher value markets and avoid the ‘race is a catalyst for change and a mechanism
they do it and the natural environment to the bottom’, competing purely on price, for empowering senior managers to turn
within which they operate. which they are ill-equipped to win. the principles into practice. Thus, my first
recommendation is the development of a
global thought leadership program, with
I found pockets of excellence in the South All organisations can benefit from the
investors from multiple agencies and a
Australian food and wine industries, application of value chain thinking.
range of industries, not confined to South
where the principles of value chain However, the process of change is
Australia. The focus of this program is the
management are being implemented challenging, as it requires a paradigm
development of leaders who will drive
by businesses large and small. However, shift in thinking (from supply ‘push’
change in their respective organisations
the examples of good practice were to demand ‘pull’), and a collaborative
and raise the level of awareness,
over-shadowed by an overwhelming re-allocation of resources and
understanding and implementation of
sense of denial – the rains will come, responsibilities amongst all stakeholders
value chain thinking and management
the markets will adjust… ‘She’ll be right’ in the value chain. This encompasses
in South Australia and beyond, at a time
– with few substantive changes in the the relationship between government
when the need could not be greater.
strategic orientation, culture, business and industry and is applicable to all
processes or incentive structures within sectors – it is not an imperative that is
many of those organisations – businesses exclusive to food and wine. Complex Such a program should attract investment
and government agencies – that problems demand holistic solutions, from across government – all agencies
are struggling with the challenge of which are stifled by the proliferation of would benefit from value chain thinking
sustainable business development. – other states, the Commonwealth
5
7. Executive Summary
common understanding amongst all take adequate account of industry needs,
Recommendations (cont) stakeholders of what it is that consumers are deficient in critical areas, and the
value and how this differs across markets methods of delivery are not as flexible
Government and the Research and
(distribution channels and geographies) as they need to be to attract more young
Development (R&D) corporations. This
and consumer segments. people into the food and wine industries
program would put South Australia on
the map, in terms of global thought – an ageing workforce and low levels of
leadership in value chain management. Whilst this may be a weakness shared retention are major concerns. Thus, my
The program should also seek to break by other sectors, the focus here is fourth recommendation is for a root-and-
down the ‘silo’ culture that is endemic unequivocally on food and wine branch review of the current education
within business and government – the consumers. Thus, I would recommend and training provisions for the South
benefits should transcend functional, that the lead agency for implementing Australian food and wine industries.
disciplinary, geographical and sectoral this recommendation is PIRSA, in
boundaries. Thus, I believe it would be partnership with the other state This is clearly a task for DECS and DFEEST
most appropriate for the Department agencies responsible for agriculture, food and was initiated during the course of
of Further Education, Employment, and wine; the federal Department of my residency. It must not be allowed to
Science and Technology (DFEEST) to Agriculture, Fisheries and Food (DAFF); falter and should involve consultation
be charged with implementing this and the plethora of trade associations with PIRSA, DTED and the regional
recommendation, in consultation with and R&D corporations, whose duplication development boards.
the Department of Primary Industries of effort in the exploration of overseas
and Resources (PIRSA), the Department markets and consumers is bewilderingly 5 Regional co-innovation clusters
of Trade and Economic Development spectacular.
(DTED) and other agencies with an Innovative industries are built around
interest in value chain thinking. 3 Holistic food policy innovative communities, and I believe
that there is scope for more effective
2 Integrated market intelligence The current SA Food Plan is devoid of collaborative innovation at the regional
and consumer insight meaningful linkages to the plans of other level. Thus, my final recommendation is
agencies, yet the food system impacts the creation of regional co-innovation
The lack of consumer insight, at all substantially on the work of many of clusters. The vision is to create virtual
stages of food and wine value chains (but them. Thus, my third recommendation is networks that are rooted in the regions
particularly upstream), amongst input the development of a holistic food policy, but extend globally and target young
suppliers and primary producers, is a to support the implementation of an people, on whom the future depends
major impediment to the development SA Food Plan that interacts with other but who are currently excluded from
of a sustainable competitive advantage plans (trade and development, health, the sustainability debate. These clusters
for the South Australian food and wine education, workforce development, would act as incubators for ideas, and
industries. This is a ‘blind spot’ which sustainability and climate change) and provide pathways for young people to
everyone can ‘see’, the removal of which will facilitate the development of cross- gain experience in business and become
is therefore something around which all agency programs and a more effective more pro-actively involved in community
stakeholders can unite. Existing market engagement with industry. development.
intelligence is extremely fragmented
and not easily accessible in a form that This recommendation should be led This recommendation is strongly
individual businesses can readily use by PIRSA but must involve other key influenced by the insightful conclusions
in business planning and marketing agencies with an interest in the food and drawn by the A-team1. Thus, I am keen
decision-making. Thus, my second wine industries – DTED, Department of that the Office for Youth should have
recommendation is the generation of Education and Children’s Services (DECS), a major role in taking this forward, in
an integrated market intelligence and SA Health, Sustainability and Climate partnership with DTED and the Barossa
consumer insight service, one that is Change Division – Department of the and Light Development Regional Board,
accessible to all stakeholders in the Premier and Cabinet, and Zero Waste SA. with whom progress has already been
respective (sector specific) value chains. made in the formulation of a potential
It should combine information about 4 Education and training pilot project.
markets (size, structure, organisation,
access), consumers (attitudes and Pathways through the education and 1
‘Engaging Young People in Sustainable Value Chains
– Communication, Education and Opportunities’,
perceptions) and shoppers (purchasing training system are, to say the least, Office for Youth Policy Action Team (OFY A-Team)
behaviour). The goal is to achieve a complicated. Syllabuses do not always Recommendations Report, January 2009.
6
8. Andrew Fearne Sustainable Food and Wine Value Chains
Introduction
Introduction
‘I choose life over death... and if I should fail, then
I will try again. The only true failure would be not
to explore at all’ Ernest Shackleton
When I began this journey of discovery My journey, like everyone else’s, is
This report is in four parts:
I had little idea of the terrain before me, coloured by my own background,
my fellow travellers or even the final • Firstly, I discuss the development of experiences and intellectual limitations.
destination! After twelve months of value chain thinking, the benefits of As a social scientist, my fundamental
looking, listening and engaging with a value chain management and the interest is in behaviour – of individuals
fascinating mix of government, industry generic barriers and enablers to its and organisations – and in how to change
and academic stakeholders, I have a application. behaviour to achieve different outcomes.
much clearer picture of the landscape In the context of building sustainable
of the South Australian food and wine • Secondly, I provide examples of the food and wine value chains, the purpose
industries. application of value chain thinking of my residency was primarily to explore
in the food and wine industries from not what people and organisations
I also have a better understanding of around the world, to demonstrate do, but how they do it. Value chain
the adaptation that is required if they what is possible, and make the case thinking is concerned primarily with
are to fully exploit their potential, and for the adoption of value chain inputs (processes), not outputs (products
become more resilient and responsive thinking in South Australia. and services), the assumption being
to the increasingly complex economic that if the processes are responsive to
and environmental forces that are an • Thirdly, I present my diagnosis of the customer needs and consumer wants,
enduring threat to their sustainability. current state of South Australia’s food and resilient to the external challenges of
and wine industries, highlighting climate change and global competition,
The future prospects for the South what I see as the strategic challenges then the outcomes will be more
Australian food and wine industries are, of today and the major opportunities sustainable – economically, socially and
I believe, fundamentally positive, but the for the future. environmentally. Thus, the focus of my
impediments to sustainable growth and final report is less on what is happening
• Finally, I set out my recommendations. in South Australian food and wine value
prosperity are significant and cannot be
ignored. chains and more on how things get done,
with a view to identifying opportunities
for process improvement.
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9. Value chain thinking
Value chain thinking
as possible, heavily reliant on wholesalers
and agents, building distribution and
sales and exchanging transactional data
(eg. sales orders, delivery notes, invoices)
with little interest in behavioural drivers
(eg. attitudes, perceptions, motivations),
upstream or downstream. In these chains,
efficiency grows from being a primary
objective to an obsession and businesses
do whatever it takes to cut costs (including
the abuse of market power). Information
is viewed as a cost, which means it can be
cut and the only information exchanged
is transactional. Relationships are ‘arms
length’, due to the lack of trust and
commitment between opportunistic buyers
and sellers. Success in these chains is
measured by the margin each stakeholder
manages to generate over their costs –
‘If you talk to a man in a language he understands, that for commodity suppliers this will vary
goes to his head. If you talk to him in his language, that according to factors largely beyond their
control (eg. exchange rates and world
goes to his heart.’ Nelson Mandela stock levels). The end result is a race to the
bottom (lowest cost) in which there is little
There are various interpretations of (and The starting point on the journey to incentive to invest in anything but scale –
some might argue a degree of confusion sustainable competitive advantage is commodity production and supply chain
over) what constitutes value chain thinking a change in mindset that places the thinking is a hard addiction to kick.
and its relevance to the South Australian consumer first and everything else
food and wine industries. In the following subordinate to their wants. Consumer In value chains (Figure 2), by contrast,
sections I aim to clarify the scope of the preferences (eg. taste, texture, the focus is on the identification of
subject and the distinction between three provenance, convenience, value for opportunities to differentiate – cutting
key elements: value chain, value chain money) are not always consistent with costs where necessary (hence the removal
management and value chain analysis. customer needs (eg. higher rates of of wholesalers and agents) but adding
sale or lower levels of in-store waste) or value wherever consumer preferences
policy objectives (eg. healthier diets or make so doing profitable. In these chains
Value chain fewer food imports), but whether we information is regarded as a critical success
are trying to build loyalty for individual factor in which businesses invest and are
The concept of the value chain was brands or more sustainable communities willing to share with like-minded trading
first introduced by Michael Porter in his and environments, changing peoples’ partners – those with whom trust has
seminal work on competitive advantage behaviour begins by understanding what been built through commitment over time
(Porter 1985). The chain, as the name motivates them. The ability to do that and with whom conversations focus on
implies, represents a linked set of value- requires a paradigm shift in the way we where the opportunities for adding value
added activities. Porter’s view was view the value chain – from supply push exist and how the benefits of collaborative
that competitive advantage cannot be to demand pull. cost reduction and differentiation can
discerned by looking at a firm in isolation,
be shared for the longer term benefit of
but stems from the many discrete
The implications of this paradigm shift all stakeholders in the chain. Notice also
activities in designing, producing,
for the way organisations interact is that in value chains the barriers between
marketing, delivering, and supporting
summarised in Figures 1 and 2 . firms (inter-organisational silos) that are
products and services. Hence, sustaining
so prominent in traditional supply chains,
a competitive advantage depends on
In (traditional) supply chains (Figure 1) dissolve over time as the chain learns to
understanding not only a firm’s value,
the primary focus is on material (product) pull together, as one, united in the focus on
but how the firm fits in the overall value-
flow – pushing what is made/available the final consumer and the sustainability of
adding activities (value system) of the
through as many distribution channels the chain as a whole.
chain as a whole.
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10. Andrew Fearne Sustainable Food and Wine Value Chains
Figure 1. Supply chain thinking
IMAGE COURTESY OF PRIMARY INDUSTRIES AND RESOURCES SA
TRADITIONAL SUPPLY CHAIN – SUPPLY PUSH
Figure 2. Value chain thinking
SUSTAINABLE VALUE CHAIN – CONSUMER DEMAND PULL
Focusing on the key enablers – effective flow of information – within Thus, when discussing value propositions,
information flow and relationships and between organisations – which value chains and the sustainability
– changes the way businesses view is an essential ingredient for rational thereof, it is important to distinguish
the world in which they operate. A decision-making and effective resource between the terms ‘customer value’ and
switch to value chain thinking has allocation. More important, in the ‘consumer value’. The former relates
fundamental implications for the quality context of sustainability, sustainable to organisational buyer behaviour and
of information and the strength of value chains are more in tune with the focuses on the buyer’s evaluation of a
relationships that underpin strategic needs of their customers and the wants product (or service) in the context of
and operational decision-making, and of final consumers, and more sensitive organisational performance measures
the financial model that drives the to the complex interaction between (eg. margin, rate of sale, waste), and
incentivisation of individuals’ behaviour, what they do, how they do it, and the business objectives (eg. profit, return on
from the boardroom to the shop environment within which they operate. investment, market share). The latter
floor. Value chain thinking requires term focuses on final consumers and
firms to embrace the principles of The value chain proposition their evaluation of the consumption of
collaboration, which in turn demands a product or service, in the context of
aligned objectives, open communication, It is widely recognised that final individual or collective (eg. household
sharing of resources, risks and rewards. consumers have exclusive rights to the or community) utility, which extends
This is not easy and cannot happen definition of what constitutes value from the basic fulfilment of physiological
overnight, particularly when the in a product or service. Firms can only needs (eg. hunger and thirst) to higher
dominant paradigm, which has served create successful value propositions by levels of psychological fulfilment (eg.
so many businesses so well in the past, understanding what it is that consumers wellbeing and self-respect).
is diametrically opposed to value chain value in the products and services they
thinking. create, and subsequently adapt to Therefore, the primary difference
suit specific target segments (see, for between a supply chain and a value chain
Sustainable value chains are those in example, Anderson et al. 2006, Butz is a fundamental shift in focus, from
which collaborative relationships are & Goodsten 1996; Parasuraman 1997; the supply base and producers to the
underpinned by inter-personal and inter- Rintamäki et al. 2007; Vargo & Lusch customer base and consumers. Both ends
organisational trust. This facilitates the 2004; Woodruff 1997). of the chain are highly heterogeneous
9
11. Value chain thinking
and require careful segmentation, for the the form of a price premium. However, they are to stand any chance of competing
purpose of effective resource allocation. if consumers remain oblivious to effectively. Similarly, government agencies
However, in most instances, supply the challenges of sustainability – and non-governmental organisations
chains focus upstream on integrating the response to which is currently (NGOs) must be tuned into the same
supplier and producer processes – being led by government policies wavelengths if they are to stand any
improving efficiency, reducing waste and and corporate social responsibility chance of changing consumer perceptions,
meeting customer value – while value initiatives – the appropriate allocation attitudes and preferences where it
chains focus unequivocally downstream, of resources could be very different, matters most – at the supermarket
on understanding what it is that with compliance the primary motive checkout.
consumers value and then delivering it for changes in the way products and/or
as effectively, efficiently and quickly as services are produced and delivered. In collaborative value chains prices
possible. This distinction often gets lost are determined by the value that is
in translation as businesses become too The potential disconnection between derived by the final consumer, which for
focused on value as defined by their own customer needs and consumer wants commodities is volatile but generally
organisation (or in some cases the next is not the only one that makes the falls over time. Thus, in commodity
organisation in the chain) and fail to concept of ‘value’ in value chains a markets, the emphasis is very firmly on
recognise the importance of delivering difficult one to pin down. The tension reducing supply chain costs to enable
value as defined by the final consumers between consumerism and citizenship businesses to survive at lower prices. By
of their products or services. is at the heart of the sustainability contrast, the adoption of ‘lean thinking’,
debate, in which too few people are in which value chains are configured to
The important point here is that engaged. The resulting degradation allow product to be pulled through the
whilst customer value is critical in of our natural environment and value chain in response to demand, with
order to gain market access – failure deterioration in social welfare (eg. minimal inventory and maximum speed
to understand and meet the needs of public health) represent fundamental and flexibility of response, is gaining
retail buyers will eventually result in challenges to the notion of consumer increased attention. In the UK several
an adversarial relationship, minimal sovereignty. Some would argue that pilot projects have been co-ordinated
information sharing and a competitive sustainable value chains should have through government-funded initiatives to
strategy wholly reliant on efficiency – it public good, not private benefit, as the demonstrate the value of lean thinking in
is the final consumer who ultimately primary focus. The problem with this removing waste and improving efficiency2.
determines where the value lies in a argument is that most commercial
product or service. Failure to understand enterprises are motivated by financial
Value chain management
and meet the wants of final consumers returns, not the public good, which of
will result in both suppliers and buyers course is why the market mechanism
Managers are charged with making
losing ground to competitors who have often fails to deliver the public
decisions about resource allocation and
likewise satisfied customer needs but benefits that governments seek.
use. When an organisation recognises
present a stronger and more carefully This is changing, albeit slowly, as
the merits of value chain thinking and
targeted consumer value proposition. consumers become more aware of and
comes to terms with the consequences of
concerned about the sustainability of
embracing the paradigm shift from supply
This point is particularly relevant in their lifestyles and reflect this in their
chains to value chains the question arises:
the context of the growing interest purchasing decisions.
What should it be doing differently?
in sustainability – of both production
and consumption behaviour – and In the meantime, whilst the
There are four key ingredients for effective
the increasing demands being made rapprochement of consumerism and
value chain management (VCM):
of commercial businesses to behave citizenship may be happening too
more responsibly with respect to slowly, it remains the most effective • Strategic alignment – collaboration is
the environmental sustainability of way to capture the minds of chief not feasible unless all parties are pulling
their procurement, production and executives, which is why I continue in the same direction.
distribution practices. If sustainable to promote a strong focus on the
production and distribution practices consumer value proposition in value • Transparency – this relates to the
are something that consumers value, chains. Commercial businesses must be efficient and timely flow of relevant
then suppliers should allocate resources tuned into the way consumers perceive, information to all parties in the
to reduce their carbon footprint, in the form attitudes towards and establish value chain, without which too many
expectation of a commercial return in preferences for different products if decisions will be taken ‘blind’ leading
10
12. Andrew Fearne Sustainable Food and Wine Value Chains
Figure 3. Co-innovation Roadmap
Operational Integration
Organisational Structures
and
Business Processes
Strategic Vision & Strategic
BUYER Alignment Leadership Alignment SUPPLIER
Resources &
Incentives
Trust & Commitment
Mutual Benefits Co-innovation Shared Learning
to inappropriate allocation and use of develop a conceptual framework for practice. It begins with the strategy and
scarce resources. the analysis of VCM, and particularly vision – so often lacking, particularly in
the identification of barriers and small and medium-sized enterprises
• Relationship integrity – trust, enablers for its adoption in the food (SMEs) – which must be aligned with
commitment and inter-dependence and wine industries. We have placed that of key (target) partners – you
are key success factors that require specific emphasis on collaborative cannot ‘do’ VCM with everyone so the
fundamental changes in the way innovation (which we refer to as co- first step is to determine the most
organisations and people interact. innovation), where we feel there are likely candidates. This is followed by
Without trust, buyers and suppliers real opportunities for improvement, in investment in and design of business
have no choice but to trade on the open organisational activity (product and/ structures and processes that support
market or use traditional contracts as or service innovation) and the way that the vision and, again, are aligned
transactional vehicles to reduce the risk organisations go about their business with partners. If these are not well
of opportunistic behaviour. (process innovation). We have developed understood and well integrated then the
the framework, which we refer to as the strategy will fail, as people within the
• Consumer insight – customers co-innovation roadmap (Figure 3), by organisations will face repeated barriers
are the gatekeepers, with whose modifying existing value chain theory in to change – working around existing
strategies suppliers must be aligned light of detailed insights gained from two processes is a drain on resources and the
if market access is to be maintained, Australian case studies – Houston’s Farm spirit of co-innovation.
but consumer insight is the key to (Bonney et al. 2007) and Coles-Simplot
sustainable competitive advantage as (Horticulture Australia Ltd 2008).
2
See, for example, the work of the Food Chain Centre
(www.igd.com), the Red Meat Industry Forum (www.
without it, sooner or later, buyers and
redmeatindustryforum.org.uk), the Cereal Industry
suppliers fall blindly into the commodity Forum (www.hgca.com) and the Dairy Industry
The framework builds on the key VCM
trap. Forum (www.dairyuk.org).
ingredients highlighted above, placing
them in the context of an individual
3
Laurie Bonney and Rob Clark, Tasmanian Institute of
Since 2005 I have been working with Agricultural Research (www.utas.edu.au/agsci)
business seeking to embrace the
colleagues in the University of Tasmania3
4
Ray Collins and Ben Dent, School of Integrative
principles of VCM and put them into Systems (http://www.nrsm.uq.edu.au/)
and the University of Queensland4 to
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13. Value chain thinking
Accepting the need for continuous markets were in a general state of difficult for individuals to think
improvement creates a culture and excess demand and the focus was on ‘outside of the box’, to consider the
mindset that embrace change rather operational effectiveness – making implications of their actions for the
than resist it – people are encouraged sure there was enough product in organisation, let alone the chain, as a
to challenge the status quo; where the chain and shifting it as quickly whole, and to recognise the value of
skills are deficient, training and support as possible to strategically located ‘seeing the whole’. Managers tend to
is provided, often in partnership with warehouses. The concept of ‘value’, work in specific functional areas (eg.
collaborating partners. Mentoring and let alone ‘consumer value’, was purchasing, manufacturing operations,
mobility within the value chain are the irrelevant and distribution was the key logistics, sales, marketing, finance
norm in ‘mature’ value chains that co- commercial weapon employed. and innovation) and are usually
innovate. rewarded for optimising that part
• The planning horizon for too many of the business for which they have
Trust is a critical component of VCM as business managers and policy-makers responsibility. Worse still, CEOs are
it lies at the very heart of relationship is too short. Small and medium sized generally paid on results, no matter
development; the co-innovation enterprises (SMEs) struggle to find the process, and as Nicholas Taleb
roadmap highlights the importance the time or the desire to consider the laments, in his incredibly insightful
of building trust through what you longer-term challenges as they grow book “Fooled by Randomness”6, “We
do (competence) as well as what you – if growth is their objective. Policy continue to worship those who won
say (commitment). The key here is the makers are often politically motivated, battles and despise those who lost, no
cycle of organisational learning, within which means the planning cycle is far matter the reason”. Many CEOs are
and between partner organisations, as too short, particularly when it comes revered for their success in commodity
this learning is the hardest thing for to policy planning for challenges that markets, which in many, if not most,
competitors to copy. voters do not understand or recognise instances, has more to do with good
as immediate priorities (eg. climate luck than good judgement.
Despite the well documented benefits change and sustainability). Focusing
of the collaborative business model that on the here-and-now leaves businesses • The benefits of collaborative value
value chain management embraces5, the (and government) blind to the chains generally outweigh the costs,
proportion of businesses practising it is challenges of tomorrow, and impotent but the latter are not insignificant.
relatively small. Managers continue to when required to respond swiftly to They are often perceived as prohibitive
refer to the value chain as a supply chain crises, often of their own making and by those (primary producers,
and practice supply chain management to which they have paid insufficient processors and retailers) scarred by
rather than value chain management. attention to fully comprehend. opportunistic behaviour upstream and
As Meadows (1999) explains ‘Paradigms downstream, and for whom the abuse
are the sources of systems. From them, • Determining what it is that of power remains a much easier option
from shared social agreements about consumers value is conceptually in the short term, which is as far as
the nature of reality, come system goals and methodologically challenging. many stakeholders in the agri-food
and information flows, feedback, stocks Why focus on the complex when industry care to look. The biggest cost
and flows and everything else about it is much easier to assume that associated with building collaborative
systems’. The paradigm shift from supply all consumers want to pay less for value chains is management time
chain thinking to value chain thinking everything and then focus on reducing – generating the trust and goodwill
is in motion but has a long way to go costs? Within organisations this necessary to integrate key business
before the transition becomes the norm. often results in relocation to low-cost processes in order to reduce costs
countries, outsourcing and process re- takes time, and results in a degree of
I believe the primary reasons for this are engineering. Externally, it often results inter-dependency with which many
fivefold: in the rationalisation of suppliers and feel uncomfortable and about which
the abuse of market power. those outside of these collaborative
• The majority of today’s chief executive
value chains remain sceptical.
officers (CEOs) and senior managers • The proliferation of functional and
– those who make the rules and disciplinary silos stifles innovation I believe that these barriers to the
determine the vocabulary and culture and adaptation to what is becoming adoption of value chain thinking are
within and between organisations – an increasingly turbulent, uncertain endemic, and embedded in business
cut their business teeth during the and dynamic business environment. organisations and business culture the
1980s. It was a time when global The silo mentality makes it extremely world over. Overcoming them is bound
12
14. Andrew Fearne Sustainable Food and Wine Value Chains
the multi-dimensional assessment
of the performance of value chains
including the analysis of product flows,
information flows and the management
and control of the value chain’. It
provides a mechanism for drawing the
attention of different stakeholders to
the opportunities for improvement at
different stages in the value chain, and
can be an effective catalyst for change.
VCA involves an assessment of the
relationships between the different
stakeholders which, coupled with the
effective flow of information, enables
the economic optimisation of material
flows – allocating time, people and
technology appropriately. Consequently,
to take considerable time and effort. As by industry associations, government the methodology focuses on three key
Meadows puts it: ‘You keep pointing at agencies or regulators. Yet all issues:
the failures in the old paradigm, you keep organisations (large or small, public or
speaking louder and with assurance from • the dynamics of information in the
private) can benefit from the application
the new one... you don’t waste time with value chain, from final consumption
of value chain thinking – using scarce
reactionaries; rather you work with active through to primary production and
resources more efficiently and effectively
change agents and with the vast middle input suppliers and back again – how
by focusing on specific consumer
ground of people who are open-minded’ inclusive, transparent and responsive
segments in distinct target markets.
(Meadows 1999). Nobody said it was easy! are the information flows in the chain?
To what extent are stakeholders’
The process of change is challenging, as
It is important to acknowledge that decisions (what to produce, when to
it requires a paradigm shift in thinking
the collaborative business model is produce, how to produce) influenced
(from supply chains to value chains)
more appropriate for some enterprises/ by what consumers value?
and a re-allocation of resources, risks
markets/value chains than others. For and rewards. Many, perhaps most, • the creation and flow of value, in the
example, in commodity markets (in businesses in the food and wine eyes of the final consumer, at each
which the opportunities for growth are industries find this difficult to accept, so stage in the value chain – how many
diminishing), price is the key driver of scarred are they by the systemic abuse of the production and processing
resource allocation, and volume growth, of market power, particularly from activities truly add value? How much
market share and efficiency are the stakeholders downstream, in the past. investment is being made in these
key performance measures. In these
critical activities? How many are
circumstances there is less scope (and it is
necessary but do not add value (these
fundamentally more difficult) for trading Value chain analysis
should be completed with minimal
partners to develop relationships beyond
resource allocation)? How many are
‘arms length’ and share information There are opportunities for improvement
beyond the transactional level. In contrast, unnecessary (wasteful activities must
in all organisations and all value chains.
in value-added, differentiated, fragmented be eliminated and resources re-
The problem is that all too often
and rapidly changing markets (which tend allocated to drive value creation and
organisations (or at least the people
to provide the greatest opportunities for efficiency)?
that manage them) are reluctant to
growth) the scope and need for improved accept the principle of continuous 5
See, for example, Bello et al. 2003; Cannon &
vertical co-ordination is far greater. improvement, or believe it applies only Homburg 2001; Duffy & Fearne 2004; Kalwani &
to other organisations with whom they Narayandas 1995; Lusch & Brown 1996; Noordewier
It is also important to stress that VCM is interact and not themselves! et al. 1990; Whipple et al. 2002)
a strategy that businesses, individually
and collectively within a chain, choose
6
Taleb, N. 2004. Fooled by Randomness: The hidden
Value chain analysis (VCA) is a diagnostic role of chance in life and in the markets, Penguin
to do; it cannot be imposed from above, tool, defined by Taylor (2005) as ‘... Books
13
15. Value chain thinking
of life cycle thinking has been applied recognised environmental management
to the field of industrial ecology as a system uses a streamlined LCA that
means of understanding the interaction underpins the company’s commitment
of industrial systems with the natural to sustainable winemaking, and provides
environment7. Life cycle thinking does a catalyst for strategic dialogue within
not produce easy answers, but it does Yalumba and with its trading partners,
provide a framework to recognise and upstream and downstream (Camilleri,
understand complex systems and their 2008).
inter-relationships.
Sustainable value chain analysis
The goal of life cycle thinking is to
reduce resource use and emissions VCA and LCA are diagnostic tools, the
to the environment from a brand, value of which lies in their ability to
product or service whilst simultaneously stimulate behaviour change amongst
improving its socioeconomic multiple stakeholders in the value
performance throughout the life chain. LCA, by definition, requires
cycle. This way of thinking leads to an assessment to be made of the
extended and shared responsibilities environmental sustainability of a
from cradle to grave. It goes beyond the product, from input supply to final
traditional focus on production sites consumption and end of life. VCA
and manufacturing processes so that requires value chain members to expose
the environmental, social, and economic themselves to scrutiny with respect
• the nature of relationships – how impacts of a brand, product or service to the economic efficiency of material
much trust exists between different over its entire life cycle, including the flows, the effectiveness of information
stakeholders? What is the nature of consumption and end-of-use phase, are flows and the resilience of stakeholder
communication within and between taken into account. relationships.
organisations? What evidence is there
of organisational commitment? How Life cycle analysis Together they have the potential to
are risks shared and the assumption of provide a more powerful diagnosis of
risks rewarded in the chain? Life cycle analysis (LCA), often called sustainability, within and between
‘cradle-to-grave’ analysis, is the most organisations in the value chain. Their
Understanding the nature and source comprehensive of the analytical combined application was explored
of consumer value (as opposed to tools available for quantifying the during the course of my residency, in a
cost or margin) facilitates behaviour environmental impacts related to the demonstration case study sponsored by
change at all stages in the value chain, production, processing, packaging, PIRSA and involving a host of partners8.
the operation of which will always be distribution, use and disposal of a The case study used the value chain
sub-optimal when there is a lack of product (Camilleri 2008). The focus for Oxford Landing (one of Yalumba’s
transparency (poor information flow) and of LCA is on the intensity of resource brands) to Tesco (the largest single
poor communication between trading use (eg. energy, water) and the overseas customer of Australian wine) in
partners due to a lack of trust and environmental impact of outputs (eg. the UK (the largest overseas market).
commitment (poor relationships). by-products, waste and emissions)
at each stage of the value chain, the The full results of the project can be
aim being to identify opportunities downloaded from the PIRSA website9 –
Life cycle thinking and for improving resource use, reducing they represent one of the major outputs
the value chain environmental impacts and targeting from the residency – but are summarised
parts of the life cycle where the greatest in the following case study.
Life cycle thinking is a qualitative improvements can be made. 7
Cohen-Rosenthal 2004; Ehrenfeld 1997; Ehrenfeld
framework used to understand and 2000; Nielsen 2006; O’Rourke 1996
assess systems. It has historically been During the course of the residency
applied to natural systems through fields I was exposed to life-cycle thinking 8
Yalumba, Tesco, Amcor, PIRSA, DTED, University of
like ecology, where the relationships South Australia, University of Adelaide, Kent Business
through my involvement with Yalumba, School
between species and their habitats are Australia’s oldest family-owned 9
studied. More recently, the framework http://www.pir.sa.gov.au/__data/assets/pdf_
winemaker. Yalumba’s internationally file/0003/93225/V2D_Final_Report.pdf
14
16. Andrew Fearne Sustainable Food and Wine Value Chains
Case Study
Sustainable Value Chain Analysis –
Key Findings from the ‘Vine to Dine’ Project
CONSUMER VALUE: More sustainable
wine production/packaging may
be something that retail buyers are
requesting of their suppliers, in an
effort to support socially responsible
strategic initiatives, but very few UK
shoppers currently value sustainability
as an attribute of the wine they
purchase from supermarkets. Oxford
Landing is regarded as a ‘typical’
Australian wine (a ‘safe bet’) but for
many supermarket shoppers the
selection of Oxford Landing, like most
‘everyday’ wines, is triggered by a
promotion, which in the case of a
known brand is difficult to resist and
requires little effort, and thus, attention
to the bottle or the label.
emissions. However, the fact that INFORMATION FLOW: The OLT value
consumers regard the appearance of chain contains a mixture of strong
MATERIAL FLOW: The VCA highlighted
the bottle and the information on the and weak information flows between
the dominance of necessary but non-
label as ‘value adding’ means that and within organisations. A clear
value adding activities in the Oxford
low cost solutions that are effective correlation exists between the nature
Landing/Tesco (OLT) value chain,
in reducing emissions may reduce of relationships and information flows.
which implies a focus on efficiency and
the perceived value of the wine in Relationships appear slightly weaker
suggests that there is limited scope
the eyes of the consumer, resulting with downstream partners (eg. Tesco)
for adding value. Tesco’s approach to
in less not more value being added and with the secondary players (eg.
merchandising and setting promotion
as a result of reducing the carbon logistics providers). Moreover, the
slots introduces greater uncertainty
footprint understanding of the customer (Tesco)
in forecasting annual sales, which
needs and consumer wants (value) is
potentially creates waste or loss of
RELATIONSHIPS: The OLT value distinctly limited upstream, particularly
profit along the value chain.
chain is characterised by strong amongst input suppliers and growers.
relationships. There are many
CARBON EMISSIONS: The LCA revealed
examples of best practice throughout The case study highlights the value
relatively low carbon emissions
the chain – Yalumba is widely of emissions data – when viewed
occurring downstream (retail and
respected as a customer, a supplier alongside the categorisation (in the eyes
final consumption) but substantial
and as a place to work. However, of the consumer) of activities involved
contribution made in the vineyard
they need to make more use of in the production and distribution
and at the winery. Together these
their strong relationship with of wine – as an input to sustainable
account for more than one-half of
Tesco to engage more effectively value chain management and resource
the total carbon emissions from the
in strategic dialogue with respect allocation for capital expenditure,
chain. The recent attention directed
to sustainability and to the longer R&D, and government intervention
towards alternative packaging formats
term development (and possible programs. This ensures that decision-
is justified by the emissions data –
re-positioning) of the Oxford Landing making is more closely aligned with and
bottling, packaging and labelling
range. driven by environmental and economic
together account for 15% of total
sustainability.
15
17. Value chain thinking
Demonstration projects imported prawns (in partnership with the right format (eg. fresh, prepared,
Rural Solutions SA, PIRSA, Spencer Gulf pre-packed) for different target groups
Achieving the requisite change in and West Coast Prawn Fishermen’s (in partnership with the Department of
mindset that constitutes the first Association, Seafood CRC). Health, PIRSA, Rural Solutions SA and
steps on the long and winding road Adelaide Produce Markets).
• Barossa Valley Community Store –
to sustainable competitive advantage
leverage of their existing co-operative • Riverland Futures – a value chain
has been the greatest challenge I have
membership and purchasing databases workshop was held with a wide range
faced in this residency, and is likely to
to enable more effective use of targeted of stakeholders from government
prove one of the greatest challenges
promotions and the maintenance of and industry, the result of which was
facing the South Australian food
store loyalty in the face of growing the identification of a number of
and wine industries in the future, so
embedded have they become in the competition from national supermarket potential value chain projects designed
supply chain paradigm. chains (in partnership with Barossa to support innovative approaches
& Light Regional Development Board, to much-needed community and
University of Adelaide). industry restructuring in the face of
Demonstration projects are key to
a chronic lack of water for irrigation
engaging people and organisations • ‘Feast’ Fresh Meat retail stores – and declining demand for the crops
in the change process. Thus, during development of a loyalty card program traditionally grown in the region (in
the course of my residency a Value to enable the targeting of specific
Chain Project Development Team partnership with PIRSA, Rural Solutions
shopper segments with specific SA, DTED, Riverland Grape Growers
(VCPDT) was established to assist in promotional offers, encouraging
the design and implementation of a Association, Riverland Tourist Board).
repeat purchase and building shopper
range of value chain projects to help
loyalty to help grow the business from The legacy is that many of these
promote the message. The VCPDT
the strong niche base established in projects continue to progress and will
comprised of eighteen people from
Adelaide (in partnership with Meat hopefully generate lasting benefits to
across a number of disciplines and
& Livestock Australia, University of the stakeholders, providing relevant
experiences, representing relevant
Adelaide). (local) examples of value chain thinking
government agencies and industry
stakeholders10. Their prime task in practice.
• Free Eyre – feasibility study for the
was to identify projects that would development of sustainable lamb 10
Rural Solutions SA (convenor), Primary Industries
enable the participants in the chain value chains in the Eyre Peninsula, for and Resources SA, Dept of Trade & Economic
to embrace the principles of value Development, SA Health, University of Adelaide,
the benefit of more than 240 mixed University of South Australia, Yalumba Wines, Tarac
chain management and to work farming enterprises who have come Technologies, Amcor, Barossa and Light Regional
towards collaborative solutions that together in pursuit of a collaborative Development Board, Zero Waste SA, Meat and
involve multiple stakeholders and an Livestock Australia
business model based on value chain
acceptance of the need to change what efficiency. The scoping project includes
is done, as well as the way it is done.
mapping existing resources (flock
sizes and genetic pool) and potential
The VCPDT was successful in working links into differentiated markets (in
through a number of project proposals partnership with PIRSA, Rural Solutions
and kick-starting several ‘live’ projects SA, Meat & Livestock Australia, Eyre
during the course of the residency, in Regional Development Board).
addition to the Vine to Dine project
summarised above: • Fruit & Vegetable Consumption – South
Australian consumption of fresh fruit
• Spencer Gulf Prawns – mapping and vegetables is amongst the lowest
of existing South Australian in Australia and the Departments of
prawn value chains with a view to Health is keen to engage with industry
identifying opportunities for greater stakeholders to explore collaborative
collaboration between fishermen interventions to raise awareness and
and vertical co-ordination with educate consumers about the benefits
agents, distributors and end users, to of eating more fruit and vegetables,
differentiate South Australian prawns whilst simultaneously making sure
from (lower cost but inferior quality) that quality produce is available and in
16
18. Andrew Fearne Sustainable Food and Wine Value Chains
Value chain management in practice – insights
from around the world
‘The range of what we think, do, and
achieve is limited by what we fail to
notice’ John Grinder
Value chain thinking, management dedicated to Asda, whose range is
Case Study 1
and analysis are not new concepts, but less diverse, comprising 10 key lines.
their application to the food and wine Dedicated value chains for dedicated Rationalisation of the respective
industries remains limited outside value chains, at packer level, occurred
Northern Europe, and particularly the
retail strategies – fresh potatoes in several years ago, so both companies
UK, where supermarket strategies, Asda and Waitrose have been working as sole suppliers
government regulations, market (Duffy et al, 2008) for some time.
conditions and industry structure have
conspired to promote an increasingly Asda and Waitrose are at opposite Both business are extremely well
collaborative model of doing business. ends of the retail spectrum – Asda is integrated with their respective
the second largest supermarket in the customers’ operations. Solanum has a
The case studies presented here are not UK with an every-day low price (EDLP) desk at Waitrose head office and the
intended to provide exhaustive insights strategy that drives volume; Waitrose is account manager spends two days
into the scope of collaborative value a niche player with quality and choice per week working directly with the
chain initiatives. Indeed, the focus is at the heart of their offer to consumers. Waitrose team, who encourage open
deliberately on small-scale businesses Yet in recent years these two retailers communication with their supply
operating in commodity (eg. largely un- have led the pack in terms of market base. Fenmarc is given a free hand to
branded) sectors, in order to illustrate growth in fresh produce, a category that develop the category plan for Asda to
that value chain management is not the both retailers regard as strategically ensure that they remain on target over
exclusive domain of global corporations important and in which they have the course of the season. There are no
with well-developed systems and adopted very similar value chain panic buttons in the Fenmarc/Asda
integrated business processes. Further strategies. relationship – Fenmarc is entrusted
examples can be found in the additional to get it right over time and Asda
readings and on websites listed at the Solanum packs fresh potatoes from trust them to take difficult decisions
end of the report. its Sutton Bridge site, which is almost on their behalf. A trusted source of
100% dedicated to Waitrose, who stock supply means fewer inspections, fewer
up to 35 different varieties throughout rejects, better availability and fewer
the year. Fenmarc packs from its customer complaints.
site at March, which is almost 100%
17
19. Value chain management in practice –
insights from around the world
Both Fenmarc and Solanum see KG Fruits is a grower-controlled soft fruit
dedication as a key part of their
Case Study 2
marketing co-operative and the largest
competitive advantage and want to Implanting the benefits of buyer- of Sainsbury’s five soft fruit suppliers. In
see greater dedication at the grower Susan Barrow they had someone who
level, but for different reasons. For supplier collaboration in the soft fruit
was IT literate, well informed about
Fenmarc, fewer, larger, dedicated sector – KG Fruits and Sainsbury’s consumer needs (having worked for
growers is consistent with the Asda (Fearne et al, 2006) several years on KG’s extensive program
model of volume growth and cost of consumer research) and keen to get
reduction, but Mark Harrod, Managing Forecasting sales is notoriously difficult an insight into retail systems, for the
Director of Fenmarc, is keen to stress for many food products, but particularly benefit of all concerned.
that it is not just about taking out the for those susceptible to surges in
cost; it is what you do with the savings demand due to unforeseen changes in Susan was given the objective of ‘...
that makes the difference in the long key environmental factors, such as the assisting the accurate forecasting of soft
run: weather. This makes it difficult for food fruit to maximise sales and reduce waste
retailers to predict accurately what will across the Sainsbury’s estate’. Associated
‘A dedicated grower base with be needed and hence what to order. In responsibilities included:
fewer larger growers will provide their efforts to ensure adequate on-shelf
opportunities to keep driving down availability, retailers will tend to over- • assistance in the provision of accurate
the cost of doing business. It is really order when demand is uncertain, to avoid soft fruit forecasts, with final sign off
simple, but organisational culture is a running out of stocks and disappointing from the supply chain manager and
major barrier to change. Taking cost out consumers. This can cause significant buyer
is one thing, investing in growth and problems for suppliers of short shelf-life
further cost-saving is another thing. products, such as soft fruit, for which • interrogation of data at store level
Many farmers will use profit from one wastage can, in extreme cases, reach
• management of weekly service level
enterprise to subsidise another. The 15 to 20%.
analyses for all suppliers, including
big prize is investment in continuous
rationale for performance
improvement – a lot of or growers have Sainsbury’s is one of the few multiple
invested in cold storage on the back of a retailers to open their doors to suppliers • assistance to the buyer in post-
cost-plus contract.’ and invite them to collaborate, specifically promotional analysis, planning
in the highly sensitive area of sales analysis for seasonal programming,
Solanum sees communication as a forecasting. Supplier implants now and daily (summer), weekly and
key in driving down costs and raising populate Sainsbury’s Holborn office monthly customer complaints
quality across the grower base, as on a regular basis but, as soft fruit management
Paul Tracey, Logistics and Purchasing buyer, Dominique Schulenburg recalls,
Manager explains: the decision to open up their demand • weekly store visits and quality
management systems to suppliers was not benchmarking
‘Growers have a better chance if they taken lightly:
have a full understanding of what • collation of Electronic Point of
Waitrose want and take responsibility ‘At first we were nervous about pulling Sale (EPOS) data and working with
for what they do, for which they will be suppliers in and exposing our systems but Sainsbury’s other soft fruit supplier, AFI
paid a premium. We have worked really it was obvious to most of us that we did Ltd, to produce periodic reviews.
hard on crop intelligence. We don’t not have the capacity to give the soft fruit
want to be giving Waitrose problems, category the attention it deserved... we This seemed a tall order and the implant
we want to offer solutions. The key suspected the problem was largely down was scheduled for six months, starting
is communicating early when we do to our inability to generate store-level in February 2003. However, as Susan
have a problem. Waitrose encourage forecasts that responded more effectively to recalls, it was obvious to everyone that
that and are very open to discuss plans local buying behaviour and short of a major any improvement, however small,
as well as problems. Waitrose want system overhaul we knew the solution would have a positive impact on the
the best potatoes and growers want required manual intervention, product- supply base and so the investment (KG
the best prices, our job is to make specific knowledge and time that we simply continued to pay Susan’s salary for
this possible and retain a margin for did not have within our internal forecasting the duration of the implant) appeared
ourselves!’ team. The scenario was unwelcome but justified:
tailor-made for a supplier implant.’
18