THE CONFERENCE PROCEEDINGS - IFEAT

costly dumping fees and high holding costs. At present, there is no easy way of putting this excessinventory back on the market. My question is what would the impact be for our industry if a viablesecondary market could be established? At the outset it would mean lower inventory levels, less cashtied up in the supply chain through excess inventory and a more efficient use of resources.The illustration in my slide is to indicate a better use of inventory across the industry, whether througha secondary market, through some disintermediation of the industry or just through better sharing ofdemand and supply between members of a network or most likely a combination of all three.2. SpecificationsWhen a supplier and buyer connect for the first time one of the first questions asked is what is yourspecification and depending on this answer will mean whether they continue to talk or move on. Somuch time and effort is wasted in the pursuit of the correct specification especially when mostcompanies do not share this information, for whatever reason.The variation in specifications can lead to a miss match between the needs of users and the productsproduced and held in inventory by suppliers. In addition this matching of specifications is a manualand slow process. In a collaborative network automatic matching of specifications would be possibleand would also focus producers on making the right products– Specifications would be more closely aligned to a “gold standard”– Result in Increased efficienciesReal collaboration would not only allow automatic matching of specifications between suppliers andbuyers but it would also focus producers to make the products that buyers need and are interested inbuying, thus reducing the amount of resources tied up in products that no one needs. In a collaborativenetwork, demand and supply dynamics could lead to specifications more closely aligned to the targetor gold standard of the network.UNRAVELLING THE SUPPLY CHAINThere are literally thousands of ingredientsfrom commodities to specialties. The industryand its companies are spending $ millions onnon-core activities as they see no other way toget these things done. On top of this there aremany steps and middlemen in the supplychain that have led to increased complexityand costs. Ingredients are sourced from allover the world – it is a truly global industry.Government regulations such as the FSMAare adding further complexity and cost.To simplify the supply chain will allow moreoriginal manufacturers to connect directlywith end users. The aroma chemicals andManufacturerUnravelling the Supply Chainessential oils industry is a classic example where there are many intermediate steps and on-sellers. It isdifficult to know who actually manufactures what and its place of origination.!"#$%"&'()*"(+,*#"&1"#2%))#"&!"#$%"&'()*"(+,*#"&1"#2%))#"&!"#$%"&'()*"(+,*#"&1"#2%))#"&!"#$%"&'()*"(+,*#"&1"#2%))#"&-./&0)%"&• 3(456(7289#.&#:&*;%&),556(.86&48.,:82*,"%")&*#&2#..%2*&/("%2*6