Recent research by the global consulting firm Accenture indicates that business complexity is growing rapidly due to unpredictable government policies, product commoditization, and demand uncertainty. In turn, this leads to operational volatility, which is accompanied by even more supply chain disruptions, customer service degradation, and economic losses.
Produce companies are not strangers to these challenges. Volatility has long been a reality in the farm-to-table supply chain—caused by extreme weather conditions, product perishability, pricing instability, and transportation capacity crunches. Particularly challenged are firms with static or rigid supply chains that are not prepared for rapid and unpredictable change. Though volatility cannot be eliminated, it can be effectively managed via flexible supply chains that boost responsiveness to changing conditions. Collaboration, capacity, and creativity are the fundamental building blocks of supply chain flexibility. These three Cs help produce companies, large and small, adapt to volatility and drive value across their extended enterprises.
Collaboration
Only the largest produce companies are vertically integrated with their own growing, processing, and transportation operations. All others are dependent on external relationships to manage and fulfill demand. The strongest of these relationships are built upon effective collaboration and communication; the outcome is a mutually beneficial rapport with common goals, resource sharing, and the agility needed to manage changing conditions.
Grower Relations
Supply collaboration helps produce companies successfully engage the grower community. A constant stream of information between strategic partners on product requirements, order projections, growing conditions, and harvest dates helps secure adequate, quality supply. Timely communication about a weather event or harvest delay provides the flexibility to source additional product if necessary.
Communication is critical, according to Garry Zehe, customer relations director for grower-distributor Cabbage, Inc. in Cleveland, OH. “You have to give growers accurate information on demand projections and changes,” he notes. “Another big part of running a smooth operation is educating growers about customer specifications and letting them know what is acceptable.”
Mark Hayes, president of Twin Garden Sales Inc., concurs with the importance of sharing market requirements with growers. “During the offseason, we visit growers to lay out our needs, making suggestions about varieties, when to plant, and when to harvest,” says Hayes. “We try to ensure product consistency from growers to meet the criteria of the big retailers.”
Transportation Partners
Collaboration with a core group of transportation providers generates knowledge, effective lines of communication, and service flexibility. As knowledge increases, providers are better equipped to anticipate shipping needs, offer operational visibility, and improve service consistency. They are also more inclined to quickly respond to changes in equipment needs, routes, and the schedules of key customers.
“It’s all about relationships with carriers because you need their resources,” Zehe states. “We want carriers to be happy when we call, so we treat their drivers with respect and get them in and out of our facilities quickly.”
