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Month: August 2011

The basics of managing a collaborative supply chain (Part 3 of 5)

This is the third post in series on collaborative supply management.  The posts are based on a case study of the pig industry which I’ve rewritten to bring out how we manage collaborative supply chains.

In post 1, I described the supply chain for pork products simply and pointed out that feedback gets lost in complex supply chains and does not reach people who need it.

In post 2, I pointed out that Toyota showed that it is not necessary to choose between cost-driven high volume businesses and high margin niche luxury businesses if we are able to manage our supply chains to deliver ‘just-in-time’.  Becoming nimble becomes easier with modern computers.

In this post, I’ll move from telling you about the general problem to what the Scottish pig industry did to manage their collaborative supply chain.

The Scottish pig industry already had an efficient system of delivering pigs and pork to market

The Scottish pig industry got together to do what they do well even better.  The farmers, the butchers, the shop-keepers and yes, the farm and meat inspectors run the ‘forward system’.  In psychological parlance, they track – they pay attention, they coordinate and they get everything done in an intricate and complicated dance.

And they added a diagnostic system which feeds information on the whole system back to individual players

The Scottish pig industry, working together, then added a ‘diagnostic system’ which collects information and feeds it back to everyone in the food chain every three months.

An example of a collaborative supply chain

Let’s take an example of how it works.

The farmer has records of how much food was given to a particularly pig, what supplements it gobbled up, how often it was ill and what medicines it was given.

By monitoring food throughout the chain, farmers can now learn what happens to a pig after it leaves them and they can find the condition of the meat when it lands on our plates (or rather leaves the supermarket in our trolley).

Let’s imagine that sometimes the pork I eat is fantastic and sometimes it makes me regret my purchase.  The information system in Scotland lets farmers know that this variation is happening.

The information system can also analyse the variation to see whether it the fluctuations are triggered at a particularly farm, a slaughter-house, a shop or transport system.

Once we have seen the numbers, then we can begin to understand ‘unexplained variance’

Moreover, the information separates out explained and unexplained variance.

Explained variance means, in plain English, that we know what caused something.  If we know what caused a blip, then we know what to do and we do it with confidence knowing that when we do the necessary, quality will go up and will be seen to go up. The consumer will be happy again.  Bravo. Simple. We can get it done.

I’ll explain in the next post what we mean by unexplained variance.


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The basics of managing a collaborative supply chain (Part 2 of 5)

This is the second post in series on collaborative supply management.  The posts are based on a case study of the pig industry which I’ve rewritten to bring out how we manage collaborative supply chains.

The Scottish pig industry has set up a sophisticated feedback loop to listen more closely to consumers

The Scottish pig industry has set out to create a feedback loop between you and I, who buy bacon, ham and pork in small quantities once a week, or maybe even less often, and everyone in the supply chain from our favourite shop working back through the abattoir and factories (that we some of us don’t even like to think about) to the pig snuffling in its pen at the farm.

Their focus has shifted from competing to collaboration

Scottish farmers have good commercial reasons for setting up this feedback loop.

We all know that much of the food arriving in our supermarkets is cheap and well, nasty. But that does not have to be so.  In the past, business schools taught that a business must choose between cheap and horrible, on the one hand, or expensive and good, on the other hand.  One of the benefits of collaborative supply chains is that we may not have to make that choice.  We may not have to choose between working in industries driven only by cost and industries that are quality but niche.  For that matter, pigs may not to be condemned to cheap and nasty living conditions either.

The key to collaboration is sharing information on the bigger picture so we can each be more nimble

Industry began to move away from the idea of cheap or luxurious when Toyota figured out how to work with its suppliers and deliver good products ‘just-in-time’.  The internet is making it even easier to produce good things at reasonable prices.  High speed computers mean we can collect information, share information and analyse information and get enormously better at what we do.  We all benefit – producer, shopkeeper, consumer and animals.

So what is the information we need to collaborate and become more nimble?

In the next post, I’ll tell you more about what the Scottish pig industry did to use information to improve their entire supply chain.


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The basics of managing a collaborative supply chain (Part 1 of 5)

Our food comes a long way from a farm

Let’s imagine a farm and on this farm, the farmer keeps pigs.  He, or maybe she, feeds them and waters them and breeds them and fattens them.  And when the pigs are big and fat, the farmer puts them on a truck and sends them off to the abattoir.  At the abattoir, the pigs are slaughtered, and sold as carcasses to butcheries and supermarkets who butcher the meat and package it into smaller quantities for us to take home and cook.

But if we don’t like it, it is difficult to let the farmer know

You and I, the shoppers at the supermarket, know what we want.  We want a meat that cooks well, looks good, smells good, tastes good, and feels good.

And when we don’t get what we want. . .well, exactly how is that communicated back to the farmer?

And are we sure that the problem was with the farm and not elsewhere in the complicated food chain?

And indeed how would the farmer know that it was something to do with his (or her) farming that created the undesirable quality.  Possibly the problem is elsewhere in the food chain… the transporting of the live pig or the handling of the pork at the butchery. . . to pick only two possible points.

A series of five posts to understand how we benefit from the collaborative management of a complicated supply chain

In this series of five posts, I have rewritten a case study of the pig industry in Scotland to help people who are interested in collaborative supply chain management understand how we  organize the collaboration and the key role of computers, data, analysis and experiments.



I love you straightforwardly, without complexities or pride

Love Sonnet XVII by Pablo Neruda

I do not love you as if you were a salt rose, or topaz
or the arrow of carnations the fire shoots off.
I love you as certain dark things are to be loved,
in secret, between the shadow and the soul.

I love you as the plant that never blooms
but carries in itself the light of hidden flowers;
thanks to your love a certain solid fragrance,
risen from the earth, lives darkly in my body.

I love you without knowing how, or when, or from where.
I love you straightforwardly, without complexities or pride;
So I love you because I know no other way

than this: where I does not exist, nor you,
so close that your hand on my chest is my hand,
so close that your eyes close as I fall asleep.


Not to get to psychologically geeky on you but when love straightforwardly, without complexities and pride – isn’t that when we experience flow, mindfulness and even universe conspiring to help us . . .

Pablo Neruda  Nobel Prize

Neruda’s work cannot be out of copyright yet.  Does anyone know where this was published and where it is available for sale.? At least we should have links up but if you own the copyright, please advise what you would ike us to do.

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