Meet supply chain challenges with knowledge capital
This year has been a difficult one for agriculture. Challenging weather around the globe has had a dramatic impact on many commodities, reducing yields and impacting on quality in some, while in others oversupply has led to decreasing prices.
The economy remains weak, putting pressure on consumer spending and supply chain margins and yet there are calls for agriculture to increase food production to feed an ever-growing population using fewer resources.
The question is, how do farmers and the supply chains they feed best meet these challenges? In large part the answer has to lie in building longer-term supply chain relationships where farmers and their customers are working closer together to drive efficiencies and deal with supply chain shocks in a more co-ordinated and joined up fashion.
Critical to this is the ability to accumulate and share knowledge. This is often referred to as knowledge capital and it is this that will really enable businesses to improve performance and compete in the years ahead.
Some may ask, why bother? The answer is because we are seeing a shift in mindset among many primary processors, manufacturers and retail businesses, which are increasingly looking to improve the performance of the supply chains in which they operate to help meet the global challenges they face.
They recognise that the performance of the primary producers that feed into their chain can help or hinder them to achieve a real competitive advantage, especially as supply gets tighter and margins continue to erode.
The more enlightened also realise that simply hammering their suppliers on price is not a sustainable solution but that building supply chain relationships and knowledge capital is.
Therefore these companies are keen to seek out the more efficient and progressive producers who share this philosophy and are keen to get involved.
There are many successful examples where farmers have used knowledge capital to make a demonstrable difference to their businesses. These include the increasing use of precision farming, livestock breeding programmes, benchmarking and sharing best practice, tillage techniques, setting up cameras in chicken houses to monitor behaviour – and there are many more.
The common factor across all of these examples is the recognition that delivering “more with less” and improving the bottom line is more of a science than an art and that informed decision making needs to be based on knowledge, not on assumption.
Another critical area of knowledge capital for farmers is to better understand what is wanted by their customers and ideally align themselves with a specific supply chain all the way to the end user. This enables farmers to grow what is needed, minimising waste, maximising the value from inputs and consequently building stronger, more robust businesses.
Food businesses, now and in the future, are facing huge challenges around procurement. Issues such as security of supply, price volatility, quality issues and margin pressure are driving a new kind of behaviour.
This creates an opportunity for progressive farmers to build their knowledge capital, understand its value and use it to take action that not only helps them improve their own business performance, but also enables them to engage with their supply chain for the mutual benefit of all.
Win tickets to the EFFP conference
Are you achieving “More with Less” in your farming business? Tell us how and you could be off to European Food and Farming Partnerships’ annual conference in London.
Specialist agri-food consultancy EFFP is offering three free tickets worth up to £375 each to those with the ideas which best demonstrate the theme of its 2012 conference.
What does “More with Less” mean for your business? It could be anything – for example, a new approach, an investment or an invention which has allowed a business to progress. Tell us in 250 or fewer words, giving brief details of the business and evidence of the difference that a “more with less” approach has made.
Details of winning entries will be published in Farmers Weekly in advance of the conference, which takes place on 13 November 2012 at the St Pancras Renaissance Hotel, London.
Submit your entry by 26 October. This can be by email to fwbusiness@rbi.co.uk, or by post to EFFP Competition, Business Desk, Farmers Weekly, RBI, Quadrant House, The Quadrant, Sutton, Surrey SM2 5AS. Please include a telephone number with your entry.
| EFFP CONFERENCE 2012 challenges |
|---|
| “More with Less Driving Performance, Sustainably” – is the theme for this year’s EFFP annual conference, which addresses a challenge familiar to many food and farming businesses. Taking place on 13 November 2012 at London’s St Pancras Renaissance Hotel, it will look at the reality of producing more with less, meeting the demands of a growing population sustainability and at the same time building business profitability. What does this really mean and what should businesses be doing differently to balance these challenges? Supply chain speakers from Tesco, Birds Eye, Molson Coors, the Food and Drink Federation and the NFU will join financial and investment experts from Paine & Partners and Shore Capital on the platform.To book or to find out more, go to www.effp.com/conference or contact Sarah Moffat at mailto: smoffat@effp.com – telephone 020 7332 2869. |