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SUPPLY CHAIN & LOGISTICS Reduced costs Improved supply chain Sustainable Get more from your supply chain Castlegate James has championed sustainability for over 90 years. We’re the largest dedicated converter of food and beverage by-products in Australasia, supporting manufacturers to realise the value of by-product and in turn we create nutritious feeds for the Australian livestock sector. We understand the importance of having reliable production, scheduling and logistics. Purchasing from a diverse range of food and beverage suppliers, we can tailor a compliant supply chain solution to suit your co-product collection requirements and help create a new income stream. We provide 24/7 production support through a national logistics and customer ready network. Even better, our team manage it all so your team don’t have to. Castlegate James are ready to discuss how we can create additional value and sustainability for your business. Find out how we can deliver added value for your business Call us on 1300 786 253 | castlegatejames.com.au ABy Peter Howard. ll rivers share the same features, whether long, languishing, lively or lazy. They have a source, channels, tributaries and riverbanks, all helping to create a flow towards the destination at the river’s mouth. Depending on the conditions, some occasionally run dry, while others flood when the flow gets too much. Even then, the flow can be remodelled with dams or flood plains to cater for changing needs. For years, the flow that we know as the grocery supply chain has been steadily remodelled to avoid flooding the market, or perhaps worse, allowing supplies to run dry. The industry has sought to create efficiencies, with lean manufacturing and just-in-time (JIT) demand based approaches to add speed and cost reduction. This year, it all changed when COVID-19 caused panic buying, leading to demand surges and supply shortages, with some serious questions needing answers. In this feature, we explore the latest supply chain lessons and discover what they’ve shown us about moving forward in a way that ensures supplies reach the right mouths, at the right time, in the right quantity – all in the cauldron of an increasingly competitive marketplace. Don’t flow it away In Australia, we have dams that provide a continuous supply of water whether there’s rain or not. They won’t last forever without replenishment, but the dams have been built to ensure a steady supply of water, independent of fluctuations in the source. There have been times when water restrictions were needed and, once or twice, an oversupply has meant some dams spilled over, but when all is considered, it works. As long as rain comes, the dams are both store and buffer, ironing out the wrinkles in nature’s unpredictable deliveries. So, why, if there’s a successful model with water, has the grocery industry chosen to remove the warehouses that acted as a supply buffer? Why do we manage the supply chain all the way from source to shelf using margins smaller than those in a mouse’s notebook, risking shortages of tacos, toothpaste or toilet paper? There’s no question JIT supply chains minimise inventory, saving money on warehousing, wages and double handling, while adding the high level of accuracy that demand driven supply brings. However, while supermarkets have certainly benefited with increased profitability, recent events have revealed there’s added risk to the supply chain, too. Today, analysis of the JIT model is less convincing regarding benefits versus risks. We’ve seen how quickly shortages can occur, and experts are questioning if our models have the necessary resilience when things don’t go according to plan. The recent shortages were caused by hoarders buying in bulk, but the slim margin for error used with the JIT model leaves us vulnerable to issues far more serious than a toilet paper shortage, especially if shortages TO PAGE 48 JUN, 2020 RETAIL WORLD 47