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Food Supply Chain Management and Logistics

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Food Supply Chain Management and Logistics i PRAISE FOR FOOD SUPPLY CHAIN MANAGEMENT AND LOGISTICS This book offers a comprehensive analysis of logistics and supply chain management in the food industry. Given the criticality of food supply chains, and the risks if not managed properly, managers in the food and adjacent industries will greatly benefit from the thorough analysis. The end-to-end view of food supply chains is well-covered. The topical case examples relate the discussion to practice and are a great source for teaching. Professor Stephan M Wagner, Chair of Logistics Management and Director Executive MBA at the ETH Zurich Samir Dani has provided a perceptive overview of food supply chains and their operations, including topics on innovation and sustainability. This book contains interesting case studies and is an essential read for anyone involved in food and drink production, distribution and retail. Praful Talera, Managing Director, Dynamics Logistics India A comprehensive text covering food supply chains from all perspectives, including logistics, technology, regulation and safety as well as innovation and sustainability. Professor Samir K Srivastava, Chairman of Research Strategy and Policy Committee, and Professor of Operations Management at the Indian Institute of Management, Lucknow International food supply chains are complex and fraught with risks. This book provides an end-to-end examination of food supply chains and logistics, and highlights the challenges faced by international food supply chains. The comprehensive treatment of relevant topics and recent case examples will be extremely beneficial to both practitioners and academics. Priyesh Patel, Managing Director, Cofresh Snack Foods Ltd ii THIS PAGE IS INTENTIONALLY LEFT BLANK iii Food Supply Chain Management and Logistics iv THIS PAGE IS INTENTIONALLY LEFT BLANK v Food Supply Chain Management and Logistics From farm to fork Samir Dani vi Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and author cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the ma- terial in this publication can be accepted by the editor, the publisher or the author. First published in Great Britain and the United States in 2015 by Kogan Page Limited Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 2nd Floor, 45 Gee Street 1518 Walnut Street, Suite 1100 4737/23 Ansari Road London Philadelphia PA 19102 Daryaganj EC1V 3RS USA New Delhi 110002 United Kingdom India www.koganpage.com © Samir Dani, 2015 The right of Samir Dani to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. ISBN 978 0 7494 7364 8 E-ISBN 978 0 7494 7365 5 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Dani, Samir. Food supply chain management and logistics : from farm to fork / Samir Dani. pages cm ISBN 978-0-7494-7364-8 (paperback) – ISBN 978-0-7494-7365-5 (ebk) 1. Produce trade– Management. 2. Produce trade–Marketing. 3. Food supply. 4. Business logistics. I. Title. HD9000.5.D155 2015 338.4'7664–dc23 2015015894 Typeset by Graphicraft Limited, Hong Kong Print production managed by Jellyfish Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon CR0 4YY vii To my parents Suresh and Sarita viii THIS PAGE IS INTENTIONALLY LEFT BLANK Contents Contents ix Preface xv Acknowledgements xix 01 1 Introduction to food supply chains 1 The actors in a food supply chain 2 Types of food chain 6 Factors influencing food supply chains 8 Case example The milk-processing value chain 12 Summary 15 Notes 16 Part One 17 Food production 17 02 19 Food production 19 Entities in the agriculture supply chain1,2 20 Agriculture and poverty alleviation4 22 The barriers to the development of the agri-industry 24 Future steps for the agriculture sector 27 Case example Cargill works with producers on finance and risk management8 28 Case example Nestlé works with dairy farmers9 29 Case example ITC Ltd India empowers farmers through technology10 30 Case example Microfinance models within the food sector11–15 31 Summary 32 Notes 33 ix 03 35 Food manufacturing 35 The importance of food processing 35 Changing market conditions 36 Food processing2,3 38 Food packaging 42 Inventory management6 43 Food safety 45 Procurement 46 Case example 3D printing of food7–9 48 Summary 49 CONteNts Notes 50 Part Two 51 Operational challenges 51 04 53 Food retailing 53 The retail environment 53 How does the food reach the consumer? 56 Online grocery retailing 62 Challenges to the future of food retailing12 64 Case example Retailers turning more to ‘dark stores’15–18 66 Summary 67 Notes 67 05 69 Food logistics 69 Movement of food 69 Preface xv ICT future trends in agri-food logistics4 73 Packaging in logistics 74 Temperature-controlled supply chains 75 Case example The dabbawala18–21 79 Acknowledgements xix Case example The journey of green beans from Kenya to UK supermarkets22 80 Case example The fresh cut-pineapple supply chain from Ghana23 80 Summary 81 Notes 81 06 84 Challenges in international food supply chains 84 International food supply chains 85 Factors affecting the future of international food systems 86 01 Introduction to food supply chains 1 Managing challenges in international food supply chains 88 International politics and food 91 Case example The growth of the Brazilian agriculture industry5–9 94 Case example The impact of the Fukushima disaster on Japanese food exports10–15 95 Case example The cucumber fallout between Germany and Spain16–19 96 The actors in a food supply chain 2 Summary 97 Notes 97 07 100 Collaboration and relationships 100 Types of food chain 6 Trends in supply chain relationships 100 Current relationship models within the food sector 108 Other trends within supply chain collaboration 111 Case example Starbucks and collaborative relationship with suppliers6 112 Factors influencing food supply chains 8 Summary 113 Notes 114 08 115 Case example: The milk-processing value chain 12 Food sourcing and procurement 115 Sourcing 116 Sourcing models 117 Purchasing models 119 Summary 15 Supplier segmentation 122 Supplier development 123 Strategic sourcing 124 Sustainable procurement 125 Case example Mondeléz International15,16 129 Case example PepsiCo – responsible and sustainable sourcing17 130 Summary 131 Notes 131 09 133 PART ONE Food production 17 Risk management 133 Risk management and uncertainty 134 Risks in the supply chain 135 Risks in the food supply chain 136 Managing supply chain risks 140 Managing risks in food supply chains 142 Case example China milk scare21–26 145 Case example Sudan 127–29 146 02 Food production 19 Case example Salmonella Typhimurium in peanut butter30,31 146 Case example UK horsemeat scandal32–34 147 Case example Cadbury salmonella contamination, 200635–38 148 Summary 149 Notes 149 Entities in the agriculture supply chain 20 10 152 Technology trends in food supply chains 152 Traceability and use of technology 153 Food production 159 Agriculture and poverty alleviation 22 Food processing in a technological context 162 Food packaging in a technological context 162 Food logistics 164 The barriers to the development of the agri-industry 24 Summary 165 Notes 165 Part Three 169 Sustainability and future challenges 169 Future steps for the agriculture sector 27 11 171 Food regulation, safety and quality 171 Attributes to consider when designing food supply chains 171 Food regulation and its effect on safety 174 Case example: Cargill works with producers on finance and Food laws and regulation 176 Reference standards 177 Compatibility standards 179 Private food standards 183 risk management 28 Other initiatives within the food supply chains 185 Case example EU ban on imports of Indian mangoes14 186 Case example The horsemeat scandal and food fraud16 187 Case example: Nestlé works with dairy farmers 29 Summary 188 Notes 189 12 191 Food innovation 191 Case example: ITC Ltd India empowers farmers through Classification of innovation methods 191 Innovation systems 192 Case example Indian curry in the UK 194 Product development in food supply chains 195 technology 30 Innovations within food supply chains9 199 Case example Types of functional products11–14 202 Case example Detecting counterfeit whisky through the bottle15 203 Summary 203 Case example: Microfinance models within the food Notes 204 13 206 Sustainability challenges in food supply chains 206 sector 31 Sustainability – the origins of the idea 206 Sustainable supply chains 208 Sustainable food supply chains 209 Measuring sustainability 210 Summary 32 Developing sustainability within food supply chains 212 Case example Various initiatives within food supply chains 217 Case example Just Eggs – recycling egg shells to make filler for plastics30 218 Summary 219 Notes
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