From the Sea to the Plate…

Group D

Agenda

Objective

Seafood Industry in Spain

Lonxanet Process

Antillana Process

Applied Concepts

Objective

Identify, compare and analyze the different

processes and operations of Lonxanet and

Antillana in the seafood industry.

Seafood Industry

Spain

Seafood Industry Spain

Seafood IndustrySpain

Seafood Industry Spain

Spain is a maritime country

Mediterranean diet

2004: Fishing Industry = 1% of GDP

10% of areas depend on fishing e.g.

Galicia

3/2001 Law

Fishing economic sector involves:

Extractive

Aquaculture

Trade

Transformation of product

Supplier Power

MEDIUMBuyer Power

MEDIUM

Threat of New

EntrantsLOW

Threat ofSubstitutes

HIGH

RivalryHIGH

Industry Analysis

SWOT Extractive Fishing

STRENGTHS WEAKNESSES• Experience• High & Sustainable Demand • Products

• Quality• Commercial Value

• Resources & Capacity• Costs of Exploitation • Price of Gas & Oil

OPPORTUNITIES THREATS• Fleet Improvement

•IFOP (EU subvention) • New Agreements

• Emergence of Fleets• Resource Scarcity• Price Increase of Gas & Oil

Seafood Industry

Consumption:

SPANISH FAMILIES

HOTEL & CATERING

SPANISH INSTITUTIONS

FOREIGN POPULATION

Fresh & preserved seafood products

Purchasing behavior

Increase in frequency vs, 2003: 2 to 3 times per week

Quantity purchased has decreased

Prefer fresh & preserved seafood (included frozen)

Purchases:Catering Industry: 83%Hotel Industry: 17%

Purchasing behavior:Daily demand has increased since 2003

Primarily preserved seafoodSecondary frozen seafood

2005: 13% increase in seafood consumption

Purchasing behavior:10% increase in purchasing per week

Preserved seafood rather than fresh seafood

Purchasing behavior2005: decrease in purchase frequency

International Operator• Sustainability

• Product refinement process

• B2B Contract (Push Based)

• Projections

• Target market

Business Strategies

Domestic Operator• Sustainability

• On-demand (Pull Based)

• Use of eMarketplace

• No transformation

Lonxanet.com

• Established in 2001

• eMarketplace for Fish

from Galicia

• Supply to Restaurants, Hotels,

Bars, Cafes

• Orders via Internet & Telephone

• Delivery within 24 Hour Timeframe

Company Background

Economic View ofGalician Seafood Industy

• Survival vs. Industrial Mentality

• Lack of Transparency (Processes, Pricing, Sourcing)

• Many Intermediaries

• High Cycle Times (Jeapordizing the Freshness of

Produce)

• Diminishing Resources (Environmental Impact and

Sustainability Issues)

Geography

• Diverse Set of Inputs

• Regarded as High Quality

Collaborators

Eco-gastronomic organization that counteracts fast food and fast life with good, clean foodMaintenance of local food tradition and people´s decreasing interest in the food they eat

Event that brings together representatives of production food communities in a responsible and sustainable way.

Share of information, ideas and solutions to the challenge of their work

Logistical infrastructure and delivery system within 24 hours in Iberian Peninsula Refrigerated Courier (2º-8º), SEUR Frio brand

Online information protection

• Extraction

• Cofradias (patron maior,

administrator)

• Lonxa

• Courier

• Restaurant

Simple Process

• Fish• Mollusks• Crabs

Extract

• Inshore Fisheries / Rias

• Gears• Trawlers• Hand-picking

Deliver to Cofradia

• Categorize• Combine with

other catches

Raw Materials

• Packaging • Assorting by

Quality

Deliver to Consolidator

• Storage• Increase

in Price• Decrease

in Quality

Deliver to Wholesaler

• Storage• Increase

in Price• Decrease

in Quality

Work in Progress

End Product •Restaurants

•Hotels•Cafes

Cycle Time = 24 Hours

Cycle Time = 48 HoursPhysical Flow: Time Flow:Monetary Flow:Information Flow: (Push Based)

Legend:

(% Increase in price per intermediary)

(3% - 4%)

(30%) (30%) (30%)

(40%)

Galician-Seafood Process Flow

• Fish• Mollusks• Crabs

Extract

• Inshore Fisheries / Rias

• Gears• Trawlers• Hand-picking

Deliver to Cofradia

• Categorise• Combine with

other catches

Raw Materials

• Packaging• Assorting

by Quality

Work in Progress

End Product

•Restaurants•Hotels•Cafes

Cycle Time = < 12 Hours

Physical Flow: Time Flow:Monetary Flow:Information Flow: (Pull Based)

Legend:

(% Increase in price per intermediary)

(3% - 4%)

(30%)

Cycle Time = < 12 Hours

Galician-Seafood Process Flow

• Ability to reach critical mass

• Privacy and Trust

• Combining key players in industry

• Generates revenue

• Facilitates value-added services

CSF’s of Lonxanet (B2B eMarketplace)

• Overcoming distance & size

• Facilitates Industry mentality

• Improves inefficiencies

• Examples:

Using eMarketplaces to Match Supply & Demand

Antillana – Terra Nova

• Colombian Company

• Created in 1986

• Exports represent 60% of the company

• Last 4 years growth of 25%

• Last 4 years exceeded sales budget

• Seasonality: Lent represents 17.2% of their sales.

Company Background

Process at Large

• Fish• Mollusks• Crabs

Extract

• Shrimp farms

• Boats

Deliver to processing plant

• Make operative planning according to country.

Raw Materials

• Packaging

• Freezing• Storage

Export

• Fill in containers

• Need 18000 kg of product (1.5 months)

Import to Spain

• Storage• Distribu

tor

Work in Progress

End Product

•Restaurants•Hotels•Cafes•Supermarkets

Physical Flow: Time Flow:Monetary Flow:Information Flow: (Push Based)

Legend:

(% Increase in price per intermediary)

Antillana Process Flow

• Production efficiency• Inventory efficiency• Energetic efficiency• Damage of products because of storage• Variations of costs: farm shrimp and sea

shrimp• # of returns because of product quality

Quality Measures

Purchasing Department Quality Control Raw materials storage Processing Delivery (Export, National distribution) Planning department Sales Department

Departments Involved

Applied Concepts

LonxanetProduct assortment

Delivery with 24 HoursProduct of Galicia

(Traceability)Quality

Price Consistency

Delivery with 24 Hours

QualityPrice

Antillana

AssortmentQualityPrice

Order Qualifiers

Order Winners

Order Qualifiers & Order Winners

Industry Bottlenecks

Marine Traffic Regulation

Size & Capacity• Fleet• Refrigeration Units• Spanish Ports

Favorable Environmental Conditions for Marine Growth• Climate• Food Source

Lonxanet

Call Centre AgentsAvailability of Refrigerated

CouriersArtisanal Fishing (e.g.

Family based crew, small boats 5 – 12m)

Antillana

Bottlenecks

Quality Identification

• Refrigerated Storage(consistent temperature)• Proper Packaging• Consumed within 24 hours of catch• Minimal intermediaries• Selective Process• Capturing Process

Lonxanet

- Seafood Choices Alliance (Sustainable

Fishing)- MSC Certification

(Marine Stewardship Council)

Antillana

Quality Indicators

Lonxanet

Survival economy vs. Pull

Small due to simple process

Antillana

Bullwhip Effect

Lonxanet

Lonxanet does not need a JIT system since they work

based on their demand and they don’t keep any

inventory. Their product is fresh and it is delivered in

24hrs.

Antillana

JIT

Lonxanet

The capacity for Lonxanet is near to 100% since it

produces what is ordered.

Antillana

Capacity Utilization

Lonxanet Antillana

Quality High High

Price Medium High

Product Assortment Low High

Cycle Time 24 Hours 3 months

Disintermediation High Low

Information Flow Rapid Rapid -Direct

IT High Medium

Benchmarking

Takeaways

• eMarketplace optimizes market

deficiencies

• Separate processes for

international and domestic

distribution

• Seafood industry faces unique

challenges

Any questions?

Group D