Archive for 'Supply Chain'

Produce & Digital Technology

speaking at rotterdam15December 2015 had me presenting to an international fresh produce audience  at the 2nd EU Fresh Info Forum in Rotterdam.  The event was organised by Frug I Com, the Dutch produce industry body for electronic messaging and coding standards and co-hosted with GS1 and IFPS, the International Federation for Produce Standards.   Anyone interested in a summary of the event, can find this here.

Following the event, Frug I Com and its sister organisation, Fresh Information Management Centre BV, produced a white paper  which can be found at  Internet-of-Veggies, Horticulture in the Digital World.

The big learning for us here at The AgriChain Centre has been the realisation that even the smartest minds struggle at times comprehending that the way business is conducted can change, will change and needs to change because the availability of new technologies not only makes change possible but, in many cases, compelling to the extent that without timely and strategy driven change being embraced, the biggest change of all may well occur – a business that cannot at the very least adapt to change will sooner or later cease to exist.

Now more so than ever, horticultural and produce industry leaders owe it to their organisations to cultivate a questioning mind, particularly with a firm focus on the potential impact generated by emerging technologies.

This process is most certainly in full swing around here, particularly since The AgriChain Centre became an Independent Verification Agency (IVA) for the New Zealand Ministry for Primary Industries last year.

So – what is going to happen in your business when you ask these questions:

“How could I improve my customer service delivery through smarter use of digital technology?”

“What business activities can I add to my existing ones, if I were to introduce smart technology?”

“How will my industry look like in five years time and what are the big data based opportunity for my business in that new landscape?”

The first two questions are very much incremental.  There are a good way to start building on today – the platform and environment you are familiar with.  The third question challenges the fundamental.  It assumes the industry will change and questions whether there is still a place for your business on the future strategic canvas.  Not for the faint hearted, but an essential question to ask for all serial value -adders.

My Milk Was Off This Morning

lgmaking_tea_milk_1000_0056One of the more frustrating occurrences in one’s morning…the milk is off! Not good at all when one only notices it after one has poured said milk into one’s tea. A glance at the label and the mood does not get any better. The milk should have lasted for another three days at least. Granted, it is summer – at least in New Zealand – but hey, my fridge works, I drove straight home with my shopping a couple of days ago, the car is air conditioned and the store is five minutes down the road. Where is the problem then?

Let’s start with where the problem most certainly will not be found….at the source. There is nothing wrong with my milk when it leaves the cow. Farmers have a reasonably good handle on making sure it does not go off on the farm, the milk tankers collect like clockwork and the processors tend to get that bit right as well, i.e.; processing the stuff coming out of the cow in a timely and temperature controlled fashion into plastic bottles with various lid colours ready for distribution in chilled trucks. Sooo – if my milk goes off despite the processor having his cool chain under control, the milk sitting in the retailer’s fridge when I bought it and yours truly being able to look myself in the eye with a clear conscience re personal fridge discipline at home….what does that leave us with?

Well, my money is on the retail rear store area being the culprit. Or more precisely…the amount of time it takes for the milk to get from the store delivery dock into the rear store chilled area. All the other steps are dedicated…cow gives milk, farmer stores milk, tanker driver collects milk, factory processes milk, truckie delivers milk,  THEN  BIG BLACK HOLE, retail assistant restocks milk fridge, customer selects milk and takes milk and all other purchases home.

The BIG BLACK HOLE  in my mind is that I have seen several variations to the theme over the years when it comes to milk being delivered to the store. These are, in no particular order,

  • delivery driver leaves milk on rear dock and buggers off
  • delivery driver attempts to raise store receiving staff and when he fails in that endeavour, leaves milk on rear dock and buggers off
  • receiving staff see milk sitting on rear dock but don’t register that milk and sun don’t go together, so the milk stays put
  • receiving staff see milk, but have other priorities, with milk shifting being not being high on that list
  • receiving staff drag milk out of sun into the rear store proper but not straight away into the chilled area.

There are bound to be other scenarios as well but the ones I have listed here  serve the purpose of illustrating a critical aspect of supply chain management when it comes to fresh food, whether we are talking about milk, peaches or bagged salad. The sad truth is that effective  supply chain management is generally consistently achievable when the focus is on individual products or a group of products with similar characteristics and therefore needs. When products with different characteristics and needs appear at a critical supply chain node at the same time, a high degree of personal initiative, the ability to prioritise without waiting to be told and the capability to understand the ’cause and effect’ concept become crucial.

Do supermarkets really train their rear store receiving staff to work consistently to these principles? I think not.

We Would Not Want The Truth Get In The Way Of A Good Story

As I mentioned in blog entry “The Grocery Fullfilment Conundrum”, there was a second element in that NZ Herald article  of 3 August 2013 which caught my eye. Here is the offending paragraph…”Our survey showed some fresh fruit and vegetables were cheaper at Countdown than at an independent fruit shop but Fox said they would likely not last as long. She said the best place for fruit and veg was a Saturday morning market. There, people could buy in bulk and it would be fresher and better quality.”

There is absolutely no denial that visiting  markets is a very popular Saturday morning pastime for many city dwellers the world over. And if the image displayed in this blog is anything to go by, then we need to get used to Farmers Markets not being a passing phenomenon. They are here to stay alright. (The image is the back cover of the NZ Herald’s most recent weekend magazine and it is actually an advertisement for a radio station.Farmers market image) But none of that means that wild statements made by people with little knowledge should be allowed to go unchallenged. What industry and industry observers like myself are used to is the unrelenting negative commentary on supermarket pricing by people who have no comprehension of the intricacies of the fresh produce supply chain. So when Countdown then gets reported as having cheaper fruits and vegetables than independent greengrocers, what happens? Instead of letting that fact speak for itself, we need to immediately find some opinionated commentator to offer a negative angle, because the facts don’t suit the editorial direction. To imply that produce that reaches the consumer through the supermarket channel “will not last as long” as that purchased from an independent fruit shop is an outrageous piece of misinformation. Yes, there are some Saturday markets where indeed fruit & vegetable growers  are offering their produce direct to the consumer. In many cases that produce can be fresher if it has been harvested the night before or early the same morning. But to expect that to be the case with all produce sold at all markets  is based on a romantic myth fed by a lack of knowledge, a fair degree of ignorance, an unwillingness to put in the hard yards to establish the facts and an unfortunate tendency to generalise. It has been my experience that supermarkets take freshness and quality far more serious than journos give them credit for. Could they do more to increase awareness? Sure. Do they at times get it wrong? Sure. But give me a UK newspaper anytime. Their journos still know how to write an objective story.

Bananas from the Bay of Plenty?

I think not!

locavore

Grab One is a New Zealand website focused on daily deals and aimed at stimulating targeted consumption.  Nothing wrong with that.  Today, one of the deals popping up in my electronic in-tray is an offer to buy a fruit box, door to door delivery, supplied by Kiwi Growers Direct.

So far so good.

The offer is quite specific…”Tuck into a wide variety of freshly picked fruit including apples, lemons, mandarins, kiwifruit and persimmons.”

Can’t be clearer than that…and the merchant claims to be a collective of growers, 100% kiwi owned…and for my convenience, a link to the organisation’s website has also been provided.  Here it is…Kiwi Growers Direct

Naturally, I go for a look….and immediately end up with an authenticity/credibility problem…

The composite picture shown on the website includes bananas, table grapes, pears and melons, none of which are grown in the Bay of Plenty….as well as tomatoes, artichokes and egg plants, product I can’t order from the supplier.

Guys, a good initiative, but you ought to get your marketing story straight.  I ‘shop’ with all my senses…

New Zealand Banana Politics 2013 – First Installment

fyffe What might this be?  Well, it looks like a bunch of bananas.  It sure felt like a bunch of bananas and when I ate one, it certainly tasted like a banana.  Therefore it is a banana.  Case closed.

If only there wasn’t this little blue label on the fruit and that’s where matters  gets interesting.  You see, during the last ten years the New Zealand consumer has been used to seeing Bonita, Dole and Gracio branded bananas in supermarkets and greengrocers.  More recently, Fair Trade fruit has also made an appearance.

Bonita bananas, coming  from Ecuador, are imported by Turners & Growers, Dole bananas get here from the Philippines via a joint venture with MG Marketing and Countdown imports Gracio bananas, also from the Philippines.

Consumers care very little about banana politics.  As long as the fruit is the right colour, does not have bruises or stem rot and is priced reasonably, bananas will be purchased and consumed. Period. lrgscaleCoaster-Fyffes

Only – those of us who have a little inkling on how the produce industry works are left pondering how the Fyffe fruit got into the country in the first place; whether this was a once-off occasion or whether Fyffe will be a regular caller; how Luigi Noboa feels about this; what the impact on the wider banana pricing position will be as a result of someone deciding to mix matters up a little; whether overall volumes coming into the country were adjusted or whether the Fyffe fruit is ‘extra’….  You know, just a few minor considerations really….Yeah, right – to quote the Tui billboards.  Anyone interested in a historic perspective of the New Zealand banana business could do worse than following through here.