THE CONFERENCE PROCEEDINGS - IFEAT

“one to one” or “one to many” environment but are unable to operate in the “many to many”collaborative networks that I see as the future of the ingredients supply chain.SO WHERE IS THE INDUSTRY NOW?Every company in the industry has virtually the same supply chain marked by:• excessive complexity• cash tied up in excess inventory• rising costs• varying levels of purchasing power• continuing difficulty in finding quality products with acceptable specifications• increasing regulatory requirementsAll share these problems despite the fact that they all use many of the same ingredients (estimategreater than 65%) leading to shareholder dissatisfaction and management frustration. So why is thisso? Basically there is virtually no industry collaboration and while this has a lot to do with a mind-setof company managers and owners driven by competition and the need for secrecy and confidentiality,but even if this mind-set changes there is currently no solution at present to allow for suchcollaboration to occur.I think we would all agree that we have many tools open to us to connect suppliers and buyers, butthese alone, are not addressing the critical issues in the ingredients supply chain and certainly have nottaken advantage of the technologies available today, let alone preparing us for the future. Companieshave already received the majority of benefits of putting in systems and automating, but they’re stillpaying 25% of list price to Oracle and SAP for uplifting and maintenance and future improvementswill be incremental at best. After decades of companies seeking improvement through cost cutting,there’s little left to trim unless there is a dramatic change in the industry. Complexity and demandsfrom upstream add costs, which for the most part cannot be passed on, and so frustration grows.Companies spend too much time and money on non-value added activities under a mistaken belief thatthese activities somehow provide them a competitive advantage. The use of expensive, bespokeenterprise solutions speaks to this belief but it is impossible for enterprise solutions to address andsolve industry issues. Major changes are required to achieve real and valuable changes to the industrysupply chain dynamics.OH YES IF ONLY WE HAD A CRYSTAL BALL!There are many uncertainties ahead for theindustry and individual companies. Many of theabove issues are industry issues and need to beaddressed as an industry or by collaborativenetworks who work together to address “valuedepleting” activities together in order to allowthem to compete on their core “value added”activities. Collaboration leads to a future whereit’s all about “value for many” not “value formoney”.Sustainability?Technology?Simplification?So what about the future?NetworkCollaboration?Food SafetyFSMA?Outsourcing?Costs?Regulations?!"174