SNOWBALLS

Published in the Farmers Guardian Autumn 1998

The current farming situation is doom & gloom, which is hardly surprising when the only time the industry attempts to consolidate is when it marches through London. What attempts have been made to consolidate/co-ordinate/co-operate etc. within a sector, let alone across the industry. The NFU should be the ideal vehicle, but the current leader pushing genetic engineering and the past leader pushing technology as the way forward, and the public baying for a more environmentally friendly farming system, snow-balls in hell have a better survival prospect. When will some people learn "When you're in hole, STOP DIGGING". How high can you stack S!!t (sorry FYM) anyway????

Technology has given the industry high yields and over production. The problems that need to faced are that over-production inevitable leads to low prices and suppliers fighting for their share of the market. Ever decreasing circles and disappearing up an orifice comes to mind, lubricated by an application of grant-aided technology.

The fact that a large company employing 260 people producing enough pigs to supply the UK for 2weeks of the year has gone to wall for £10m, should be a warning to everyone the need to work together is imperative. You ARE facing the consequences.

Looking for the government to help you out of a hole that you have dug with a "high-tech JCB" (purchased with grants) is as logical as asking the devil for the keys to heaven. The labour unions were too powerful, so the government divided and conquered. The farming lobby was too powerful, that has been divided and conquered. The ways and means were different, the result the same. The government has it's own axe to grind. If, and I mean IF the government decides to help out, forget about "don't look a gift horse in the mouth", remember "beware of Greeks bearing gifts".

Can anyone answer a question that is bugging me? With communism falling apart why does anyone want to get deeper into a system that is based on those principles, or haven't you looked at the EU system of un-elected commissioners (failed politicians) who are not accountable to anyone, even to their own auditors who produce a damning report every year.

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SUPERMARKET

On the rash assumption that everyone survived the Christmas rush with their nerves and reputations reasonable preserved, may I wish everyone the best for the New Year.

On a more mundane note, the quality of produce on display pre-Christmas, left a lot to be desired. There was cauliflower that did not meet the minimum EU size of 110mm, others that had physical damage, and the presentation generally was not appealing. It is fortunate that the "lemming" attitude takes over when purchasing food for Christmas, one would presume that a 3 month famine had been announced rather than a 2 day closure of the shops.

There is a fundamental problem with the way that supermarkets (and I mean all of them) are handling the logistics. What is often over looked with numbers is that the common factor between 2k, 300k, 4m or 50bn is that they all start with one. The common approach is generate extensive systems to handle the total, and to handle it from one point, i.e. head office. The more that the supermarkets expand the more impossible this becomes, which will leave a void for an enterprising organization to fill..

An alternative is to restructure,

1:- The person who knows what the consumer feels is the consumer.

2:- Next is the "aware" individual who is filling the shelves.

3:- Next is the supervisor who listens to his/her staff.

4:- Next is the store manager with a good feed-back relationship.

99:- Is the computer system.

100:- The buyer who reads the printout from 99.

101:- The statisticians that get feed-back from the results that 100 got from 99 on the basis of 101's influence on the programming of 99 and 100's actions. In computer terms, a loop, a lock-out.

Is it any surprise that I as a consumer feel lack of confidence in the food system, and I know two sides of it. I as a grower, as a consumer, you as supermarket are being influenced by a closed system which is going no where. Yes, you are expanding, but mostly in to new areas, not in percentage of market share or returns. Now is the time to change before it is to late. At some point over the last 5 years the system has changed from a quality based requirement to a volume related, any and all pretences apart, including the customer complaints procedures, rationalization, quality assurance schemes etc, have not and will not increased customer confidence, more likely the opposite. 

The consequence of this is that producers are being pushed into expand or die, this is leading them into a volume, not quality related business. Anonymous products that promote only the seller do nothing for consumer confidence, and traceability should be obvious, not buried in a code that only informs those that most likely already know. 

The product and its origin is more important than the producer or the seller, and I don't mean Kent, Cornwall or Outer Mongolia. Which reminds me of another point, carrying coal to Newcastle does you no favours, Cornish or Linc's cauli being sold in the Canterbury store (with Thanet 10 miles away) does not help either your credibility or consumer confidence, which is generally "What are they hiding?".

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Structure

1:-The most stable structure is the one with the widest base.

1. The concentration of a crop in a favoured locality only requires one good hail storm which could knock all of it out for several weeks.
2. If the supply base was in three major areas, disease, pests and weather could have all sites out at the same time.
3. Murphy's Law. If it can't happen it will. (and very often does) Hurrician's don't, 400year winds do.

2:- Specialisation is desirable within sectors of an organisation, but leads to weakness if applied to the whole.

1. Super-market pressure/selection on size of supplier is forcing producers in to large acreage, mono-cropping which is a high chemical input system

3:- Organic farming is non-specialised, a rotation of crop types is a non-negotiable requirement.

4:- The destruction of the farming infrastructure by rationalisation and cheap food policies is and will be irreversible to the detriment of consumer.

Is the above a requirement of an infrastructure that is based on short term objectives and of management consultants who are never as rich as they convince you that you will be.

1. A small organisation has to be quality related.
2. A large organisation has to be volume related.

This applies to supplier and supermarket.

1. Trace-ability should be visible to give confidence to the consumer.
2. The increase in "own brand" has matched the increase in consumer unease of product confidence.

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Supermarket Supply & Distribution.

1:- History

The evolvement of the distribution network from store purchasing to the infrastructure as we know it, stemmed mainly from need to acquire produce not of that locality or even of this country. The increase in the S/M share of the food sector, coupled with the diversification in to non-food sectors has led to a massive overload of the distribution centers.

2:- Today.

Various technical innovations and computer systems have been and are being tried, without looking at the fundamental issue.

The results of which are:-

a:- Destruction of the food supply base. i.e. farming.

1. The concentration of the the supply base into a few, but increasingly powerful, suppliers. (feed a puppy until it is big enough to bite you). A lesson can learnt from farming, it fed a puppy (supermarkets) and look what happened.
2. This concentration into a few very favoured areas is good for the short term. Long term will see an increase in the chemical or genetically modified requirements. (if there is a lot of rabbits you will get a lot of foxes) Nature will compensate for an excess of anything.
3. Restricting supply to a few will generate logistic problems at the supply base, it is moving the problem, not curing it.
4. Excessive costs in trying to service the system (this is happening to the S/M distribution as well).

b:- S/M size has out grown is ability to supply.

1. This can be directly related to government which took more and more of regional responsibility into central organisation and created more and more quango's to assume responsibility for areas which it was too remote from to understand the problems.
2. Whilst recognising the sterling work done by the staff of the buying office, central ordering systems produce purchasing programs which leave packers thinking that programs and orders are produced by monkeys who cannot communicate.
3. The S/M distribution, with many variations, do not work because of the volumes. if they "manage" most of the time then promotions/bank holidays and especially Christmas, chaos is king. over-ordering of some products and under ordering of others is the norm, with nothing for freshness or quality and line-pick becomes week-pick coupled with the inability to get vehicles in or out of the distribution centers. How can any existing system cope the maritime climate of the UK. Flooding in the south-west (everybody using buckets not shopping bags), raining over 95% of the country (no one shopping) and 4 sunny days in the south-east (empty shelves).
4. Produce is very often not displayed correctly, or promoted at the right time, or of the right quality. the principles for promoting or displaying dried or canned goods should not be used for fresh produce.

2:- Solutions.

First principle. do not re-invent the wheel.

Second principle. the answer is in the wheel.

Basically the answer is use what you have but go round the rim instead of through the hub.

1. this can be cured by giving the responsibility of produce to dedicated people in the store. Give the responsibility of keeping the store supplied with selected produce to dedicated local suppliers. Produce to be labeled by that locality, or better still, with suppliers name. ( one of my unfulfilled ambitions was to have 3 "adopted" local stores who only sold my product). Any surplus to go through the existing channels to service areas which do not have that product.
2. Store ordering for locally grown produce. Central ordering of other produce. It would have local responsibility for weather and other local factors.
3. If daily orders were under or over estimated a local supplier within the system could top up during the day instead of waiting for the next delivery from the distribution vehicle. (this was the norm a few years ago before technology took over)
4. The demand for shorter ordering systems has led to the tail wagging the dog if it does not produce the desired result, which it is not, judging by the over or under supplied shelves.
5. This government is now passing responsibility back to the regions, even if keeps one hand on how far the purse can be opened.
6. Producer costs could most probably be kept within current limits and could possibly allow a rebate from the S/M due their reduced cost structure.
7. Increasing the size of suppliers produces the same lack of detail of operation that the S/M are experiencing. When the personnel lose contact with the person who is the "boss" they become spokes in the wheel, essential, but not involved, automated not invigorated. The "boss" may be the manager, who, if control has been removed by a computer, also becomes a spoke. The consequence is quality that, at best, will pass, but not excel, volume becomes the driving force. The small to medium size operation which, more often than not has the "boss" working along side the staff, getting wet/cold/sweating and swearing when they do, but getting the job done, with pride and satisfaction of doing something well against all that nature could throw at them. This part of the farming infrastructure is being destroyed instead of being coordinated and utilised in order to service a S/M system that is not sustainable.

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