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Dr Hermione Parsons
Director and Associate Professor
2016 ABARES Outlook Conference
1-2 March 2016, Canberra
Economic Benefits Of
Improved Supply Chain
Visibility/Traceability
Format
• Importance of SC visibility & traceability
• Approaches for achieving it
• Case-study pilots
• Commercial, economic and societal benefits
• Basic Definitions
Point A
Point B
The physical movement of goods
What is Transport?
Point of Origin
Point of
Consumption
Systematic organisation of goods and /or services
What is Logistics?
Supply Demand
The interdependence and organisation of supply and demand, including raw product forecasting and asset investment
What is Supply Chain? What is Supply Chain?
Supply Demand
Oil and alternative energy
Transaction Systems
Commercial Power
Strategic Asset Investment
Procurement /Purchasing Sourcing Information Technology
Supply Chain Management
Business Processes
Legal and Regulatory Systems People /Relationship/ Resistance to Change
Logistics Transport
Global, Political Economy
Labour
Finance
Systems Thinking
Supply Chains are Complex Systems and Involve:
An
Integrated
Value,
Supply,
Logistics
Chain
Framework
Business Relationships:
Customs
Broker
Shipping
Line
Transport Importer Exporter
Distribution Centre
Empty Container
Park Operator
Commercial
Operational
Stevedore
Supply Chains Require Point to Point Visibility
Delivery
to Dock Point of Origin
Seller’s Factory
Alongside
Vessel
Exporting Country
Delivered to
Buyer’s
Warehouse Frontier/
Border
Unloaded
on Dock
Importing Country
Customs Biosecurity
Infrastructure
Services Quality
Timeliness
Ease of arranging shipments
Tracking and Tracing (Visibility/Traceability)
SC Framework: Key Elements 6 Key Elements for International SC Efficiency
Supply Chain: Complex Interdependent Systems
They involve systems within systems and:
• Many private sector companies and public agencies
• Companies sometimes linked only through operations
• Many layers of regulation (e.g. bio-security, customs, tariffs)
• Food and agri-business products have additional logistics requirements
• Convoluted supply chains
• New scales of operation
• Global complexity
Poland: Owned land= 21K ha
Ukraine: Rented land= 31K ha
Arizona: Owned land= 10K ha
Arizona:
8 Shipments per year
Argentina: Land Owned /rented 32K ha
Argentina:
10 Shipments per year Legend:
Milking Parlours
Poultry Farming
Arable & Horticulture Farms
Manufacturing Plant
Distribution Center
Almarai: World’s Largest Vertically Integrated Dairy Company
What Is Supply Chain Visibility & Traceability?
For Almarai? The ability to track all parts, components and products in real time between supply and demand and in transit from the source to their final destination:
• Capturing and storing data
• Creating business intelligence
• Sharing readily available data between all stakeholders
• To be knowledgeable, agile and responsive
• To enable quick response times and participants to reshape DEMAND or redirect SUPPLY according to need
• To identify and manage risk and deal with uncertainty
For corporate retailers - to avoid litigation and liability
Institute for Supply Chain & Logistics
Project Case Studies
Increasing Demand For Supply Chain Visibility
Across the world SC businesses increasingly require clear, timely, relevant data and information to:
• Manage a myriad of issues including: quality, food safety, country/place of origin, environmental and sustainability issues, food labelling, food losses, food waste, product authenticity, and counterfeiting issues
• Ensure better management and cost minimization along the whole chain
• Increase efficiency and boost productivity
To make what is inherently complex simple
• APEC Sea Port Communications
• Food Export E-commerce in Asia (SMEs and Corporate)
• Post-Harvest Losses in Agribusiness Supply Chains
• Export Market Insights for Food Exports to Asia
• Australia-China International Standardisation of Logistics Processes
ASEAN Customs Transit Pilot – Thailand Malaysia and Singapore
APEC Framework for Managing Risk in International Food Supply Chains
GS1 EPCIS Standard for Multimodal SC Visibility Cost Benefit Pilot
APEC Global Data Standards Pilots
Some Relevant Projects
Case Study 1: APEC Generic Framework
A Comprehensively Integrated Pork Supply Chain
Comprehensively integrated pre-cradle (from the lab) to the plate including: • Animal inputs • Feed • Raising pigs • Abattoir • Wholesale and specialist retailing • Transport (China landside and marine)
Pre 2013 the biggest risk: upstream of supply chain (the source)
Case Study 2: APEC Wine and Beef
Objectives:
Cost-benefit analysis of applying Global Data Standards (GDS) to enhance SC visibility and traceability to:
• Demonstrate whether and how GDS will enhance supply chain performance and contribute to better compliance
• Identify enablers, challenges and mitigation policies
Wine exports: Australia Hong Kong, China
Boxed beef exports: Australia US
Goods Physical Movement Data (GDS)
Australia
China
Hong Kong, China
Electronically Share
100101010101001
100101010110010
100101001010010
Shipment Documents
Unique ID of cargo and goods inside the cargo
Path to achieving SC Visibility Achieving SC Visibility: Global Data Standards
Case Study 3 – AustRoads (Domestic)
Objectives:
• To assess the benefits of improving multi-modal SC efficiencies via improved tracking/tracing (using GDS)
• To recommend on how such a standard could be implemented widely in Australia
• To evaluate practical implementation issues
Australian case studies:
• An agri-food manufacturing company
• A transport and logistics company
• A steel manufacturing and distributing company
Commercial & Economic Benefits: Visibility/Traceability
• Companies can access relevant information, manage safety, quality, cost and whole of chain processes, they can deal with uncertainty and manage risk (human error, deliberate and accidental)
• Traceability is only possible when the supply chain is controlled >> success for companies, value chains, nations and regions
• Efficiency becomes possible >> optimisation and boost productivity
• Other critical SC issues can be managed for the good of society: biosecurity, child labour, OHS, environmental protection and sustainability
‘Clean Green’ and ‘Fear Free’ food are now universal aims
We are a small producer nation far from the world’s main markets
Traceability is fundamental to Australia’s capacity to compete
Dr Hermione Parsons
Director
Institute for Supply Chain and
Logistics
Associate Professor
Victoria University, Melbourne
THANK YOU