Journal of the Department of Agriculture, Journal of the Department of Agriculture, Western Australia, Series 4 Western Australia, Series 4
Volume 41
Number 1 Journal of Agriculture, 1999/2000 Article 10
2000
Supply-chain alliances offer strategic focus for agriculture Supply-chain alliances offer strategic focus for agriculture
Ashley Manners
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Recommended Citation Recommended Citation
Manners, Ashley (2000) "Supply-chain alliances offer strategic focus for agriculture," Journal of the Department of Agriculture, Western Australia, Series 4: Vol. 41: No. 1, Article 10.
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SUPPLY-CHAIN ALLIANCES OFFER STRATEGIC FOCUS^SlDVGRICULTURE
evelopment of strategic supply-chain alliances between producers and other agri- ess sectors becoming a common trend worldwide, it is time for Western Australian primary producers to break with tradition. Strategic alliances have the potential to add value to agricultural products, and to guarantee food safety and quality for consumers. Ashley Manners reports on the benefits of strategic aUiances, and some of the successful alliances currently being developed within Western Australia.
Until recently, Australian primary producers were satisfied to supply agricultural products into domestic and export markets with very little understanding of anything other than price. However, the penny has finally dropped, and many producers are now realising the potential to add value to their products by gaining a more intimate understanding of specific consumer demands.
In today's climate, customers demand, and are prepared to pay a premium for, quality, consistency and service. This new consumer can only be identified and satisfied by an understanding of the market and very close cooperation between all sectors in the supply chain. In response to this change, many
producers are recognising the need to work more closely with the people who market their products. One method of encouraging close relationships with supply-chain members is the development of strategic supply-chain alliances.
In addition, strategic alliances have the added benefit of allowing retailers to secure an ongoing supply of agriculture products fresh from the farm gate, which in turn enables producers to structure their business activities over the long term. Further, alliances allow retailers to gain an understanding of the limitations faced by producers and other supply-chain members, and to plan for any variation in supply.
The lamb industry is just one sector benefiting from strategic alliances between producers, processors and retailers.
Journal of Agriculture, Vol 41, 1999/2000
Asian markets are increasingly interested in developing strategic alliances to ensure a constant supply of Western Australian products. (Above) Many producers are recognising the need to work more closely with other members of the supply-chain in order to add value to their products. (Right)
W h a t is a strategic supply-chain alliance?
Strategic alliances can be defined as a formal relationship b e t w e e n different sectors of the s u p p l y chain t o utilise the c o m b i n e d resources, information and skills of t h e partners, for the mutual benefit of t h e g r o u p .
O n c e a strategic supply-chain alliance is in place, i n f o r m a t i o n received directly from the market place can be used b y processors and p r o d u c e r s t o d e v e l o p strategies t o m o r e effectively a n d p r o f i t a b l y m e e t c o n s u m e r needs. Technical assistance and research can be m o r e c o n s u m e r - f o c u s e d a n d r e w a r d i n g if delivered w i t h i n t h e framework of an alliance.
Strategic alliances also p r o v i d e an o p p o r t u n i t y for retailers t o negotiate w i t h p r o d u c e r s over an o n g o i n g s u p p l y of p r o d u c t s , and an o p p o r t u n i t y f o r p r o d u c e r s t o secure a p e r m a n e n t a n d secured m a r k e t for their p r o d u c e . In addition, an alliance between s u p p l y - c h a i n m e m b e r s b a s e d in different c o u n t r i e s a l l o w s each m e m b e r t o use t h e o t h e r ' s k n o w l e d g e to o v e r c o m e any regional differences.
Western Australian example
In Western Australia, t h e r e are a n u m b e r of successful alliances a l r e a d y m a r k e t i n g and s u p p l y i n g agricultural p r o d u c t s for domestic and e x p o r t m a r k e t s .
T h e Q L a m b Alliance b e t w e e n A c t i o n F o o d s , Hillside M e a t s a n d a g r o u p of lamb p r o d u c e r s has led t o o u t s t a n d i n g results in terms of
increased sales, improved profits and higher customer-satisfaction levels.
O t h e r alliances are active in supplying live cattle t o South-east Asia, fat-tail sheep t o t h e Middle East, fruit to Singapore and Indonesia, and p o r k to Singapore and J a p a n .
Role of Agriculture Western Australia A g r i c u l t u r e Western A u s t r a l i a ' s Strategic Alliances Program is specifically designed t o assist all sectors of i n d u s t r y develop alliances and o p p o r t u n i t i e s in d o m e s t i c and e x p o r t markets.
Assistance starts w i t h an initial consultation meeting t o explore an idea o r need.
F u r t h e r assistance t h e n d e p e n d s o n t h e circumstances of the project b u t may include:
• Alliance formation.
• M a r k e t research.
• M a r k e t contacts.
• G r o u p formation.
• Sourcing technical assistance.
• Sourcing funding assistance.
• Management and strategic planning assistance.
T h e Strategic Alliances P r o g r a m has a t e a m available at any time t o discuss any ideas o r needs.
Journal of Agriculture, Vol 41, 1999/2000
