Collaboration / Supply Chains / Optimization

19-05-2008 | Home | Expert opinion

Recently I sat with a gentleman who drew an agriculture value chain having to do with optimizing profits for every contributor. Fascinating! The information required to do this however, was incredibly expensive to develop, coordinate, and put into a model. As you can imagine, the accuracy, the amount of data, and the assumptions also make the model somewhat suspect.

The model refuted the idea that the ideal value chain is one that is the sum of the individual optimized parts. Those of us in the feed industry are a crucial part of the value chain, but without collaborating with both the downstream and upstream portion (which may mean going further than one step back and one step forward), we cannot build the most efficient systems. What we are left with is each portion trying to maximize its own profit, and either growing government regulation trying to control the chain, or larger systems buying or building its own individual parts – because each part is forced to watch out for itself.

If one could argue that a long term focus on building the most efficient chains is best for the chain, and that each individual contributor can profit along the way – then how does this happen? Big ideas require big meetings – I for one don’t buy it. Start small and get your IT-department involved.

Consider the use of new and growing online collaboration tools that can begin to share information and invite others in your chain to join. A blog (like this one) is something that can be added to your website and invite those up and down the chain to participate. Use on-line tools and web cameras to host meetings to make provide virtual collaboration a reality – with tools like NetBriefings and Microsoft® Office Live Meeting – you can even allow participants to chat and take real time on-line surveys. How about setting up an on-line data exchange portal with a hosted facility that allows for secure data sites? With the recent releases around Microsoft® Office Sharepoint Server, this may be something you can easily do within your own organization.

Again – consider this – optimizing your organization is only one answer. It’s the entire chain to the consumer that provides the greatest opportunity to drive out costs and deliver value. Optimizing only one part may in fact be harmful to the larger value proposition. Anyone want to share ideas about how they are interacting with customers /suppliers?