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