SUPPLY CHAIN CHALLENGES
Meet Supply Chain Challenges with Knowledge Capital.
Following on from EFFP’s Our View article, ‘Producing More with Less’ , Mike Ader at EFFP shares his thoughts on how farmers, primary producers and others in the chain can meet their challenges by accumulating and sharing knowledge.
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.
THIS OPINION PIECE FEATURED IN FARMERS WEEKLY.
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