Lean production techniques offer food producers and processors huge potential for reducing supply chain costs, new studies have revealed.
Twenty-five projects involving farmers and processors set up under the auspices of the Food Chain Centre (FCC) reported savings of £14.4M over the past five years. Of these projects, six companies involved in piloting the application of lean manufacturing techniques reported savings of £626,000 in the first year alone.
In its completion report published last week the FCC, which was set up in the wake of the Curry Commission on Farming and Food, said the savings identified were just a fraction of what was possible were the techniques used in the projects to be more widely adopted. The projects involved almost 2,000 farm businesses and 120 food companies.
In its report on applying lean thinking to the UK dairy industry, for example, the FCC said that collectively, the sector was wasting £1.5bn. In one of the FCC projects undertaken, 400 farmers supplying Dairy Crest with milk for cheese-making saved £2M a year after a review of the supply chain.
“This has been the biggest ever evaluation of business improvement techniques for food and farming,” said FCC chairman Joanne Denney-Finch. “The results show the tremendous capacity of the industry to profit from working more effectively together.”
Between 2002 and 2006 the proportion of farmers benchmarking their performance had risen from 8% to 33%, said the report. Over half said they had improved their practices and 34% had enjoyed better returns. A pilot group of farmers was also able to raise sales by over 10% by making use of the Dunhumby Academy at Kent Business School to access the habits of millions of shoppers.
For full details of the FCC and its leaning thinking reports covering the dairy, red meat and fresh produce sectors, visit the Food Chain Centre