7 - Food supply chain planning, auditing and performance analysis

Abstract

The food supply chain has faced significant uncertainties over recent years leading to a heightened interest in effective supply chain management within the industry. By considering the four key systems inputs integral to a supply chain (those of demand, supply, process and control) a company can take action first to stabilise supply chain performance and second to improve its effectiveness and operational capabilities by reducing uncertainty within the chain. This chapter outlines the key drivers and uncertainties that exist within a food supply chain and describes a structured supply chain planning, auditing and performance diagnostic approach (quick scan audit methodology) that can be used to measure supply chain effectiveness. By measuring and assessing the symptoms of complex information and material flow it is possible to identify the root causes of supply chain uncertainty. The chapter describes how these uncertainties can be reduced and systems performance improved through effective business systems re-engineering methods. The chapter also describes the understand, document, simplify and optimise (UDSO) concept. It shows how UDSO enables the supply chain to be simplified and optimised before reviewing a number of approaches to supply chain planning used to improve supply chain systems effectiveness. The approaches described are efficient consumer response (ECR), collaborative forecasting, planning and replenishment (CPFR) and vendor managed inventory (VMI). These approaches encourage collaboration along the supply chain leading to improved supply chain performance.