We want to work
Undoubtedly, UK is in a financial jam; and undoubtedly, deservedly so. But talking about what is wrong with Britain is a way of life for the chattering classes.
A business in a jam; the business of jam
This is a story about another kind of jam – one which you may not even buy anymore – though this story will have you looking at your supermarket shelf with more curiosity.
This is the story of McKays – an industrial jam-maker founded in 1938, in the berry-growing, marmalade-making east of Scotland around Dundee – perhaps better known for being home to several games-producers. Paul Grant bought McKays from global giant, United Biscuits, in 1995. In the following 12 years, the throughput of fruit and jam multiplied 10 fold.
So in the time that Sergei met Larry, founded Google, and took us to Google Street Maps and the Royal Channel on You Tube, a jam-maker in Scotland bloomed. This post is about what we can learn from Mackays. Their transformation is as modern as Google and is a practical working example of a idea that is often talked about abstractly.
MacKays worked on their whole supply chain but rather than trying to manage the whole chain and offload risk to suppliers, Mackays reformed the chain to manage variability. Because they can tolerate variability, they are able to up volumes, and of course grow at the phenomenal rate they did.
The market for jam
In 1997, Scottish jam-makers, MacKays, processed 30 tonnes of fruit into jam and marmalade which they sold to supermarkets as “commodities” – that is, they competed on price.
In 2007, they processed 350 tonnes and they had repositioned the MacKays brand as premium and sold a parallel line, Mrs Bridges, through independent retailers such as garden centres and hamper companies.
Premium jams depend upon “things staying the same”, or as we say in management-speak “taking the past into the future.” We move in the opposite direction to the box-ticking, target-setting fiends, and concentrate on what is good and true.
- McKays retained its traditional taste by retaining its traditional production of jam with a slow roiling boil in copper-bottom pans
- They used Scottish fruit allowing them to extend the recognisable and valued Scottish brand.
- They used local produce which allowed them to coordinate more closely and manage variability that comes with agricultural produce.
MacKays did receive a government grant that gave their bankers the commercial security to lend them the capital to expand.
There were four key issues to reforming the supply chain and increasing upstream demand for fruit by 1000%.
- MacKays had sufficient belief in their product and consumers to envision both repositioning as a premium product and multiplying their volumes, not by a few percent, by multiples of 100%.
- MacKays had sufficient belief in their suppliers to negotiate the delivery of clean, fresh, full flavoured fruit suitable for bottling rather than the fresh produce markets.
- MacKays invested sufficiently in relationships to welcome farmers in the factory and to be welcome on their farms.
- Because they had good relationships, it was easier to work through the inevitable variability that comes with agricultural produce. MacKays retained a consultant as their agent for this work.
Learning from the jam business
These key five points translate to other businesses.
- What is good and true? What is the equivalent of jam made with artisan manufacturing with fresh local produce?
- What is better and possible? What is the equivalent of consumers who want a good quality jam?
- Who can we depend upon and what do they need? Who are the equivalent of farmers who need clear signals about how our needs differ from needs of their other customers?
- Who will work more easily with us if they have a sound understanding of how we work and if we have a sound understanding of how they work? What do our suppliers not understand about us and what do we not understand about them?
- And most importantly of all, where is there natural variability in the system and where we need to be available, pay attention, and work together to keep our business relationship intact and prosperous on both sides? What is the equivalent of strawberries that are better some years than others and what does it mean in our business to adjust to variability in someone else’s part of the supply chain?
In this story, the slightly-new notions are that huge gains come, not out of investment or control or competition, but from
I hope this practical example shows you how networked supply chains work in ordinary, down-to-earth businesses but do remember that the details are different for every business. And that business is not a spectator sport. Talking about business does not make it grow. We need to be doing something. Now.
Reference: This cases study is part of a wider series of case studies on collaborative supply chains in agriculture in Scotland.
- The basics of managing a collaborative supply chain (Part 4 of 5)
- The basics of managing a collaborative supply chain (Part 3 of 5)
- Scottish farmers get their local supply network humming
- Don’t wait for government; start fixing the economy yourself
- 5 benefits about thinking of your business as part of a collaborative supply chain
- The basics of managing a collaborative supply chain (Part 5 of 5)
- The basics of managing a collaborative supply chain (Part 1 of 5)
- Turn the business models in knowledge network industries the right way up again
- By our metrics we shall be known: selection for the knowledge industries of the global information age
- My predictions for the future of business psychology