Supply Chain Management
What is 'food supply chain management'?
'Supply chain management' is the term given to the system and inter-connections of organisations, people, activities, technologies, information and resources involved in production and distribution of a food product. It encompasses many different disciplines and logistical steps from sourcing the right raw material and ingredients through to on-time delivery to the consumer. The supply chain can be quite complex when dealing with food products.
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From "farm to fork"
You may have heard such terms as "farm to fork" or "paddock to plate". These terms refer to the supply chain within the food industry in an easy to visualize way.
Take a minute to imagine all of the people and organisations that might have been involved in getting your breakfast to you today. The growers and producers – wheat farmers if you had toast or weetabix, dairy farmers if you had milk or yogurt and even banana growers if you had banana chips in your muesli. Then there are the manufacturers who turn the wheat or bananas into a breakfast product. This usually involves several stages and several manufacturers. or example, one company might dry the bananas into chips and then sell them to the muesli producers who then add them as a component to the finished breakfast product. The manufacturing can be done close to where the commodity crop is grown or it can be moved elsewhere for this, even exported to another country. Then there is the packaging company who manufacturer the packaging material to protect the product. Along the way distributors and transporters move the foods by road, rail, air or sea.
Once the product arrives at the destination, it goes into the shops or marketplace for selling. The shop can be a huge multi-national supermarket or a small outlet. The retailers promote the product to make consumers want to buy it through advertising and marketing strategies at both the point of sale and through advertising media, like newspapers and television channels. Finally, the customer buys the product, takes it home and consumes it. The supply chain is now completed.
However, this is not necessarily the final step in the life of the product - the post-consumer stage of waste disposal and management for all the food that goes uneaten. Approximately a quarter to a third of all the food we buy ends up thrown out, usually because we buy more perishable food than we need or we serve more than we can eat. This is particularly true for fresh produce with a limited shelf life.
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Elements of the supply chain
The stages of the supply chain are now briefly outlined below in a simplified presentation. It can be far more complicated in reality with many inter-dependencies and steps.
Food Ingredients and raw materials
The supply chain in the food industry starts with ingredients or raw materials. Selection of the appropriate raw materials is needed to achieve the desired end product. Suppliers are contracted to supply materials that meet the requirements outlined on the raw material specification sheet. There may be a number of concurrent suppliers of the same ingredient to ensure availability is always guaranteed, especially for high volume businesses, such as in fast food restaurants.
A traceability system allows manufacturers to trace the source and path of each ingredient or raw material throughout the production process. This is very important if any incidences of contamination or allergens come to light after a product has been placed on the market. Having such safeguards in place can prevent or minimize any widespread risks to consumers.
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Transport and storage
Unless you grow your own food, all the food we consume has undergone some – and probably many – forms of transport. In the simplest case, fresh vegetables may be taken to a local market. Consumers then buy produce and drive, walk or cycle it home. This first step may be eliminated if the produce is bought at the farm-gate, such as in the case of strawberries in the summer time, but then it is still transported home by the customer. A product may be a key ingredient for another product and thus is transported to a manufacturing site elsewhere by road, rail, sea or air. This procedure can be repeated before it is finally sold as a finished product, which again requires transport to get it to the point of sale. Transportation of foods results in what it termed "food miles" and its economic and environmental impacts are debated today.
Commodity products, such as grains, can be bulk or container shipped around the world in huge transporter ships. In bulk shipping the grain goes straight into the hold of the ship instead of being transported in containers on board the ship. Some countries are major commodity exporters to other parts of the world, such as Australia and Canada for wheat export and pulses. Further on, we will see some examples of innovations and research in shipping transport.
The storage, packaging and transport steps of the supply chain can involve many technologies, needed to maintain product quality. Chilled or frozen distribution ("cold-chain") and modified atmosphere environments are used for many products.
Foods can be stored and packed in modified or controlled atmospheres. Controlled atmospheres are useful for crops that ripen after harvest or deteriorate quickly even when stored optimally. The gas composition is carefully monitored and a proportion of the store atmosphere is re-circulated to control the carbon dioxide concentration. In modified atmospheres however the product is held in an airtight environment and the atmosphere is changed by respiratory activity of the fresh foods. Carbon dioxide levels can be higher than 20% and oxygen levels can be as low as 0%. High CO2 levels are important for controlling insects and mould growth for example in grain storage.
Food Production
Ingredients are combined or transformed in some way during the manufacturing stage to produce the final food product. Production can be thought of in terms of the input of raw materials that undergo a process of transformation to produce an output, the product. Commercial food products can have multiple ingredients or components, which themselves may have undergone transformations, making them quite complex final products. Production can take many forms – it can be batch or continuous, on a mass-scale, or more limited in output - and can use many specialized techniques and equipment.
Packaging is added to the finished product. Packaging protects the food and provides the appropriate barrier to maintain product safety, amongst other important roles. Individual packaged products are then combined into larger consignments ready for distribution to sales points.
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Safety in the supply chain
Safety is vitally important in food production. The result of a supply chain should be a product that should be safe to eat. Manufacturers are forced by law to make sure of this. Risk assessment and hazard analysis schemes are used in industry to assess potential problems before they arise. As is true with other aspects of life, it is better to prevent a problem before it happens than to try to correct it afterwards.
Hazard Analysis and Critical Control Points - HACCP
The system such in food manufacturing is called Hazard Analysis and Critical Control Points or HACCP for short. Different foods carry different risks. A risk is the likelihood of a problem – or a hazard - occurring. Risk assessment in food production looks particularly at ingredients, times and temperatures, processing methods and packaging.
There are three type of hazards defined in food production:
- Biological – such as food poisoning due to bacterial contamination (e.g. salmonella), mould growth and viral infections.
- Chemical – such as that from cleaning fluids, fertilizers or paints.
- Physical – such as stones, hair, fingernails, rings and bits of machinery.
In order to make a HACCP plan, each stage of the production system is first described. Any risks associated with each stage are then identified with an explanation of why this particular problem poses a risk. The control check is then worked out to stop the hazard or reduce the likelihood of it happening. Finally an action plan is outlined to state what action is to be taken if the control check shows the hazard has happened. On top of this, it is essential that effective record keeping is maintained to document everything.
It is a good idea for the HACCP team to include people from across multi-disciplinary competencies, including food technologists, microbiologists, packaging technologists, etc.
An example for production of a chicken and vegetable curry is given below, taken from the 'AQA Food Technology handbook'.
HACCP development plan example
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Social and environmental concerns associated with the food supply chain
In addition to safety, timeliness and general good management practices are necessary for a successful food supply chain. There is also growing concern around social and environmental issues associated with the food supply chain. Some of these are discussed below.
In particular, 'food provenance' and 'food miles' have become important concerns as societies start to consider the wider implications of producing and moving food.
"Food provenance" refers to where the food has been grown or made, by whom, and how and when. Many companies have developed responsible or ethical trading policies in response to this issue. Some products carry the "fair trade" endorsement.
"Food miles" refers to the distance between where the food is grown and where it is eaten. Supermarkets today sell fresh fruit from South America and frozen meat from New Zealand - and everything in-between! Many food products contain ingredients or components that have traveled across the world and thus accrued many food miles.
Transporting food burns fuel and produces greenhouse gases, which in turn causes climate change. The CO2 produced during this process, is referred to as the 'carbon footprint' – how big a mark it makes on the environment. However, it is not as straightforward as just looking at the miles: if the alternative to shipping naturally-ripened fresh produce over thousands of kilometers is to produce it closer to home but in very energy-intensive greenhouses, is this better? It may be that there are carbon-neutral greenhouses powered by renewable energy sources in the near future which go some way towards answering this.
In "Real insights" the public discussions at COP15 in Copenhagen on the impacts of food production and distribution on climate change are discussed.
On top of the environmental concerns, there is also the ethical question of taking away the livelihoods of farmers from poorer regions of the world who grow crops for export. This discussion falls into the concerns voiced by some groups about food sovereignty.
As with other consumer products in the world, food products and their manufacturers are now coming under closer scrutiny for their own carbon footprint. In the future, food products may carry "climate-labels" but this is still generally very much under discussion.
Of course, the alternative to foods carrying a high food mileage or intensive production practices, is to buy locally produced products that are in season. Local markets usually sell food that has been locally grown. (What is "local" is often down to sensible interpretations by individuals - from the same village or county or further afield?)
Organic products are also increasing in popularity and generally use less inputs (energy, fertilizer, etc) in their production compared to conventional farming methods but may have traveled across the world. On-line shopping has now opened up the possibility for markets and customers to be anywhere.
This just shows how complex the food supply chain can be with the added dimension of current debate about climate change impacts.
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International research in the area of food supply chain management
One example of research within the supply chain area is that in the transport sector, with a particular focus on shipping. Scientists use research to better understand the conditions involved in shipping foods across the world. This is important to commodity exporting countries, an example of such is given here for some recent (2008-9) research from New Zealand and Australia (Zespri International, New Zealand and CSIRO, Australia).
Kiwi fruit generate big business for New Zealand and most of the fruit crop is exported to other regions of the world, including Europe. This entails long distances and time spent at sea, usually on board massive refrigerated ships called "reefers" where the empty hulls are packed with 5,000 pallets of the fruit. Kiwi fruit can also be transported on container ships, often when there are not enough "reefers" available to meet demand for shipping. However, the conditions on board the container ships, inside the 12 metre boxes, with different packing arrangements, are quite different to the traditional reefers and so food scientists aim to understand how these differences could affect the fruit quality at the end of the journey. For this purpose, a test container facility (CTF) is used to mimic conditions on transit without actually having to make the journey. The following is a description of such a facility.
The CTF used in this example is a 20-metre insulated facility capable of testing containers or refrigerated vehicles. It can assess the influence of transport conditions such as temperature (with a range from -10°C to +50°C), humidity and solar radiation on products such as kiwifruit and other perishables. Although containers do have refrigeration, fluctuations in outside conditions can influence product quality.
Using weather data and other information, researchers simulate a container's voyage by controlling ambient temperature, airflow, humidity and solar radiation equivalents. This allows them to make recommendations on whether the container is suitable, how the product should be optimally positioned and whether the packaging works.
Using such a research tool allows the researchers to find out how the whole system interacts with outside influences, which is important to fruit, which can be on board for 6 weeks. The time in transit is also used for fruit ripening, to prepare for delivery at the destination, by using gas and temperature to regulate the rate of softening of fruit.
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Extension – making a HACCP plan
HACCP is the acronym for the risk assessment system used in food manufacturing - Hazard Analysis and Critical Control Points. This plan is used throughout the supply chain, to identify problems before they arise and take action as needed, right from raw material production, procurement and handling, through manufacturing and distribution of the finished product.
In the 'Healthy Living' section, an idea for designing a healthy pancake is presented. Now go one step further and imagine you have been asked to produce your award-winning healthy pancake on an industrial scale and for this you need to draw up a HACCP plan.
Working in teams of 3 or 4 students, first decide what your pancake product should be, if you do not have an example readily available from the healthy living section. Then think about the risks involved in production. How will you control for these and what will you do about them if you find one? Think about the raw materials (ingredients) and the type of equipment you will use.
Have fun, be safe!