Effective Chain Management to ensure Safe and High

Quality Products

51st EOQ Congress

22 – 23 May 2007, Prague

ir. Jan van Roekel

Agri Chain Competence Center

OUTLINE PRESENTATION

• The playing field is global; society (citizens) and consumers are at the control

• Needs for value chain development and for getting insight in the value chain

• Cases from ACC – case base:

– HAK Processed Vegetables

– Plantania Potplants

– IKB Pig Sector

Focus on how to ensure safe and highquality products in the agri-food chain

Focus on how to ensure safe and highquality products in the agri-food chain

GLOBAL FOOD SAFETY INITIATIVE

• Benchmark private standards worldwide

• Harmonization of private standards

• Build and implement early warning system

• Encourage cooperation in education and training

• Coordinate good retailing practices

Ahold, Tesco, Carrefour,.......

SUSTAINABLE AGRICULTURE INITIATIVE

• Compiling and developing knowledge

• Raising awareness on sustainable agriculture;

communicating relevant information

• Developing sustainable agricultural practices; working

groups to develop principles

Nestlé, Unilever, Danone, ....

Initiative from food industry to contribute to the

development of sustainable agriculture worldwide

GLOBAL FOOD NETWORK

Initiative from agricultural universities and ACC to establish an international knowledge network on

cross border food supply chains

• Focus on food safety and high quality

• Exchange, development and dissimination of knowledge

• Developing internationally attuned research agenda’s

• Operating a communication structure

EU, Latin America, Africa, ....

WHY IS CHAIN APPRAOCH SO IMPORTANT?

Introduction of (new) standards&

Continious supply of products meeting these standards

=Implications for all partner in the value chain

Needs insight in : - value chain structure

- costs and benefits of compliance - supply chain risks

- innovation process

Farmer Agri-

industry

Food

Industry

ConsumerRetailer

THE HEINZ TOMATO KETCHUP CHAIN

Input supplier

Agri-industry

Primary producer

Consumer

Heinz

Retail trade

Quality

=

Commitment+

Continuous

Improvement

Heinz TQM program:- continuous improvement

- get it right the first time

- zero defects

- no blame concept

- top down/ bottom up

+

+

+

Redefinition

consumer

Partnership/ reward

best supplier

• License to produce and to deliver

• Quality image of actors in chain & network:- added value

- preferred suppliership

• Auditable provenance (origin)

• Best Practices Learning from each other

• Spin off of trust: lower transaction costs, higher turnover

• Integrity as management quality indicator

• Transparency

INCENTIVES FOR INTRODUCING INTEGRAL CHAIN CARE PRINCIPLES

INTEGRAL CHAIN CARE IS VERY COMPLEX

Input industry

Retailindustry

Foodindustry

Agri-Business

Farmers;Growers

Testing & inspecting

ConsultantsCertification

Organizations

Accreditation bodies

Standarddevelopment

bodies

PHASES & CASES

Value Chain DevelopmentValue Chain Development

Development Case

Connecting grower HAK Processed with consumer vegetables

Integral Chain Care Plantania

Integral ChainNetwork Care IKB Pig Sector

CONNECTING GROWER WITH CONSUMER

GrowersGrowers-

associationHAK A.H.

Consumers

ICT – Service Provider

Information Flow

RESULTS OF VERTICAL CO-ORDINATIONIN PROCESSED VEGETABLES CHAIN

Implementation of food safety system including ICT

Integral chain care system leads to 5 % reduction of quality costs

Reduction of uncertainty (sustainability and

responsive planning)

In case of crisis tracking and tracing within 48 hours

PLANTANIA: BUILDING MARKET-ORIENTED CHAINS

ChainReversal

Grower Auction Wholesaler Retailer Consumer

Consumer OBI Lemkes MOS Grower

MOS

INTEGRAL CHAIN INFORMATION SYSTEM ‘PLANTANIA’

MOS LemkesOBI

Datawarehouse

Chain transaction system/ Chain quality system

MarketingInformation system

Gro-

wers

con-su-

mer

INDUSTRY CHAIN PARTNERSTHE DUTCH HOG PORK CHAIN

Genetics

Farrowing

Finishing

Slaughtering

Meat processing

Wholesales

Retail/ Food service

Feed

man

ufa

ctu

re

INSTITUTION AND ASSIOCIATIONSTHE DUTCH HOG PORK CHAIN

• Product Board for Livestock, Meat and Eggs (PVE)

• Corporate Trade Organisations

• Central Bureau of Slaughter-stock Services (CBS)

• SGS-Agrocontrol

• National Inspection Service for Livestock and Meat (RVV)

• Health Services

• Marketing Services

• Research and Development

What is IKB?

IKB = Integrated Chain Control

- Quality Assurance System for pig meat

- Infrastructure through the whole production chain

- Based on EN 45011

- Based on HACCP

- Started in 1992

- Dynamic

Quality management in the Dutch pig sector, 17 may 2006

What is IKB?

Elements of the IKB-system

Voluntary

participation

Sanctions

Traceability

Whole production chain

Independent

control and

certification

Information

infrastructure

National programme

Quality management in the Dutch pig sector, 17 may 2006

IKB: A DYNAMIC SYSTEM

• Scheme Building

- 1988: Research and trials - 1992: Start with farmers, feed

producers and slaughterhouses- 1993: GVP code for vets - 1995: Chain completed by

inclusion of processors and retailers

QA design1992: Independent inspection and sanctioning1993-1995: independent inspectionand sanctioning for each new

scheme participant

• Scheme Development

- 1997: Hygienecode for slaughterhouses

- 1998: Pig welfare code- 2000: Quality regulations for pig

traders and transporters - 2001: HACCP in the feed industry - 2002: HACCP in the meat

industry - 2003…………..

QA Development

- 2003……………

Quality management in the Dutch pig sector, 17 may 2006

IKB requirements in a nutshell

Feed supplier

QA

HACCP

Quality management in the Dutch pig sector, 17 may 2006

IKB requirements in a nutshell

Pig farmer

QA

Hygiene

Animal welfare

Pig identification

Certified suppliers

Quality management in the Dutch pig sector, 17 may 2006

IKB requirements in a nutshell

Transport

QA

Transport code

(hygiene, animal welfare)

Quality management in the Dutch pig sector, 17 may 2006

IKB requirements in a nutshell

Veterinarian

QA

Proven expertise

Positive list antibiotics

Quality management in the Dutch pig sector, 17 may 2006

IKB requirements in a nutshell

Slaughterhouse

QA

HACCP

Animal welfare code

Hygiene

Traceability

Quality management in the Dutch pig sector, 17 may 2006

Quality management in the Dutch pig sector, 17 may 2006

ResultsResults of IKBof IKB

• From 10.000 individuals to one

national (basic) scheme

• Farmers maintain their commercial

freedom

• Image

• Market orientation

• EU legislation

Volume

Annual production of IKB pigs

100%

80%

60%

40%

20%

0%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Quality management in the Dutch pig sector, 17 may 2006

CHALLENGES FOR DEVELOPING SAFE AGRI-FOOD VALUE CHAINS

• Reduction of costs of compliance e.g. transaction costs

• Improvement of public private collaboration

• Harmonization of standards

• Connecting consumers and farmers in a new way

• Dilemma management of standardization versus differentiation

• Transparency of value chains

• Improvement of communication about safe and high quality products

TO CONCLUDE

The consequences are positive:

• More safe and high quality food

• Reduction of costs for all partners in the supply chain• More transparency in the supply chain

• Better market access• More cross border collaboration

The return on investment is expected to be high!

Effective Food Chain Management

is “hot”

Effective Food Chain Management

is “hot”