HGCA highlights benefits of grain supply partnerships

By Linda Rano

- Last updated on GMT

Related tags Supply chain Better

The UK Home Grown Cereals Authority (HGCA) is urging increased
communication and cooperation between companies involved in the
grain supply chain, seen as particularly important now that raw
materials supplies are relatively restricted.

Industry analyst and consultant Professor David Hughes said that the current climate in the cereals industry is better for partnership building than it ever has been because of changes in the balance between different parts of the chain as raw material prices have increased. He added: "There is not over-supply of raw materials and as a result there is strong interest from both suppliers and customers to build stronger longer term relationships. I am optimistic that we are seeing change and I hope a more sustained change​." Professor Hughes was speaking with reference to the latest phase of HGCA's Supply Chain Partnership. A spokesperson for HGCA explained to BakeryAndSnacks.com that the Supply Chain Partnership was born out of deliberations by the HGCA's Cereal's Industry Forum (CIF), set up to look at ways for companies involved in the grain supply chain to work together more productively. The Supply Chain Partnership aims to recommend best practice between companies in five areas. In addition to communication and collaboration these include cost and price, duplicate testing, new product development and transport. Individual companies and the sector as a whole are being reviewed to try and ensure the grain supply chain operates as effectively as possible. HGCA's Crop Marketing Director Alastair Dickie said: "The work of the CIF has clearly shown that better communication and collaboration can drive improvements throughout the chain - it can increase new product development and innovation, reduce testing, improve transport, ensure security of supply and actually help to increase profitability all round." "We have now started to see examples in the cereals industry of companies in the supply chain joining together to provide branded products with clear provenance, and this is one of the opportunities provided by collaboration​." HGCA has conducted a number of case studies to promote best practice between companies. One involved plant breeder CPB Twyford, fertiliser producer Yara, grower Farmcare, miller Whitworths and retailer the Co-op. The project team identified five key steps to improve sales and profitability including improved communications and transparency so that market needs are communicated better to everyone in the chain. Ian Taylor from Farmcare said: "It is always good to get people from across the chain together to discuss their ideas and understand what role they play. Greater understanding of all the roles in the supply chain will ultimately result in a more stream-lined profitable chain​." Professor Hughes has come up with ten tips for successful collaboration in the supply chain. They include to work on a product that is directly in line with consumer 'mega-trends' such as the tendency towards premium markets or current health trends; to work with 'horizontal' partners such as farmer-co-operatives to help give a company sufficient clout and resources in the marketplace; to ensure there are benefits for everyone in the partnership although these might not be evenly spread; and to ensure the business proposition underpinning the partnership should make commercial sense. His other recommendations included to focus on very specific products and markets; to build on past successful partnerships' to ensure the partnership relationship is based on inter-dependence; and to and aim high for premium markets because that makes it difficult for others to follow. Shared vision is also important and all partners need to remain flexible as situations change. He concluded: "Those that coordinate and are willing to work directly with partners, with suppliers and with customers, are financially more successful than those who just play the market​."

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