Missed deliver slots cost flour supply chain dearly

By Rick Pendrous

- Last updated on GMT

Related tags: Value, Supply chain, United biscuits

Missed deliver slots cost flour supply chain dearly
Failure of grain lorries to meet delivery slots to mills has been identified as one of the biggest problems in the upstream biscuit supply chain,...

Failure of grain lorries to meet delivery slots to mills has been identified as one of the biggest problems in the upstream biscuit supply chain, according to new findings from the Cereals Industry Forum (CIF), which has been targeted with identifying and reducing waste in the sector.

In the first ever value chain analysis (VCA) completed by the CIF, which is funded by the Department of Trade and Industry and the Department of Environment, Food and Rural Affairs, half of the grain delivered to the mills either did not meet the allocated delivery slot or the quality specification. However, said CIF, it had identified considerable scope for process improvements.

CIF is jointly run by the Home Grown Cereals Authority and the Food Chain Centre. The study involved the Fengrain co-operative supplying wheat to miller Heygates, which in turn makes flour for the production of McVities biscuits. The VCA started with a farm near Kings Lynn and finished with United Biscuits' distribution centre in Nottingham.

“There was a vicious circle of quality rejections,” said Fengrain marketing manager John Whitelam. But he added: “Thirty percent of the difficulties of delivery to the mill were due to the wrong time of arrival … when there has been a rejection it is probably costing £300 for a load - it is something that has to be cut out.”

Seventy-five percent of the problems of incorrect moisture content, and wrong condition of grain and transport inefficiencies, could be dealt with by better management at the farms stage, he said and added. “We have identified where very many efficiencies can be made.”

United Biscuits was also able to identify problem areas for action and these included: improving the monitoring of stock in intake bins; reducing waste and rework; reducing “bounced tankers” post-weekend when there was no space for them; and reducing loading time and lost pallets by improving loading bays.

“Participants in the VCA found it extremely useful,” said CIF manager Chris Barnes. “ It has provided valuable information for everyone, and facilitated dialogue between the different parties. Furthermore, the published results will provide generic lessons applicable across the whole industry.”

Other key facts from the study were:

* Of the 532 hours, 62 steps and 150 miles spent in the chain from farm to biscuit, only 62 minutes were spent adding value to the product* One of the biggest costs was transport* The biggest transport cost - between farm and mill - came from rejections* In order to compensate for delivery errors, Heygates needed to order 25% more grain than it required, which produced unnecessary stock and distorted demand* The main information flow along the chain was informal, reflecting companies producing to forecast rather than demand

Other issues identified in the case study were that Fengrain made over 100 calls every day to its 20 hauliers and, due to communication problems, some flour tankers were dispatched by Heygates to United Biscuits even when their silos were full.

As a result of the research, an action plan has been developed to make improvements.

http://www.cerealsindustryforum.org.uk

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