Negative attributes of the meat industry
Supply chain management is the process under which the services like, storing or moving the resources or the flow of goods occur. Moving includes raw material or the finished product. The whole process of planning, managing, and executing the flow of goods is the main activities that are included in the supply chain management process (Gunasekaran & Kobu, 2007). In meat industry the raw meat sources are collected from different sources and then supplied to the slaughter houses. The main processes of supply chain management is similar to the common supply chain management including, demand, sourcing, planning, managing the inventory and logistics or transportation. This process completely depends upon the manufacturer and the supplier. Supply chain management (SCM) possesses many benefits, for instance, cost- efficiency, increased profits, increases the rate of collaboration, better strategies, and planning etcetera. To meet the demand and supply of meat in Africa this supply chain management is essential. SCM also helps in managing the demands and then prevents from carrying on excess inventory all the planning helps to meet the needs of the customers in the way that is more efficient. This SCM along with the use of proper technologies works efficiently. The below-presented report shows the SCM and its impact on the meat sector in an organization situated in Africa.
Many complexities are taking place in the meat industry of Africa (Fang, Zhao, Warner and Johnson, 2017). Talking about the negative attributes in this industry, there are so many challenges faced by the African meat industry which are mentioned below.
Negative attributes of the meat industry
Supply chain issues in the meat industry are one of the normal issues. Supplying the meat from inventory to the buyer is one heck of a challenge (Mylan, Geels, Gee, McMeekin and Foster, 2015). It is very difficult to keep the quality of the meat fresh while movements and another issue can be related to suppliers and procurements many more.
In the past few years, many challenges have raised regarding the herd expansion which leads to low animal count and eventually less meat.
Another major challenge in this industry is the poor health condition of the poultry animals. In Africa, the veterinary services, essential medicines, and drugs for the animals, and medical supplies are supplied at a very weak level. Along with this, there is also the shortage of breeding services so there are very few chances of obtaining a new variety for meat lovers.
Storage is another issue over there in the meat industry (Hult, Ketchen, & Arrfelt, 2007). Cold storage facilities are very few over there and on the top of that high cost of electricity put a damper overall situation.
Positive attributes of the meat industry in Africa
According to a survey conducted by the African study, around 30% of the cows are slaughtered during the pregnancy because the traders are not aware of the pregnancy. Traders often measure the weight of the cow with the help of measuring its girth and then they get an estimation of the cow’s weight. Therefore, after the cow is slaughtered the fetus has to be thrown away which causes a loss for the trader. However, the farmer can gain profit in the shorter run but in the long run, there will be a downfall in the stock of the cows and hence meat. Due to the increasing cost of the raw materials, the farmers or the breeders feed the animals with poor material which results in the bad health of the animal and eventually compromises with the meat quality. Customers usually go for the healthy meat and therefore reject the poorly conditioned meat, which can also affect the business. Another negative impact is the uncertainty in the political environment that can affect the meat industry severely.
Orientation is the basic point while laying out a supply management chain. While supplying the product from production to the customers it is very important to transfer the information accurately to all the way (Stadtler, 2008). In order to maintain a rhythm between both the parties, maintaining a contact is very necessary which allows both the party to ensure that the product reaches carefully and safely to the required point. Another positive attribute is the better production qualities. This quality ensures that the product is manufactured according to the specifications provided by the customer. This is one of the best qualities of the suppliers that importers find good to go with. Manufacturing the product in such a way that it meets the requirement of the buyers is one of the major positive attributes of the meat industry in Africa.
Another positive attribute can be the better quality of the meat. Most of the suppliers opt for the meat which means the healthy animal which is disease free and has a lot of meat in the form of body fat. Different characters like, an appearance of the meat, texture, and flavor define the quality of meat.
Another positive attribute of the meat industry is that it provides lots of benefit to the farmers in comparison to the breeding charges. It helps with increasing income levels and provides jobs to thousands of people. Most of the consumers prefer frozen meat, which is actually very beneficial for the producers to store the meat for a long time and supply whenever required. Even though the grazing area has declined in southern Africa but the amount of livestock production has increased which means more animals and eventually more meat.
Africa has taken this business to the international level, which has also helped the country with the economic conditions. Income levels tend to rise in the meat industry of Africa. This means that more meat production by the local sources of the country and more prices of the meat at the local store (Carter & Rogers, 2008). Meat industry will help to manage the higher demands of the public. Refined meat will help save a lot of budgets and will provide the customers with more organic options. More meat production will allow the suppliers to serve the local traders and as well as take the business to an international level eventually resulting in industry growth.
A gap between the evaluation and implementation of supply chain
For example, Morgan beef, one of the giant beef producing organization is operating with an effective supply chain management and also farm cattle at their own (Morganbeef 2018). Company owns its own land and farm cattle there to meet the demand and make more business as well. In this company is using the SCM system for its business in terms of supply and demand as well as company profit.
In African meat industry, meat demands have increased in past few years. In order to fulfill all the demands, the managers of the RICA cold meat industry are required to use the SCM approach properly. To lay out the supply chain management plan there are some challenges that are faced by the managers, which are mentioned below.
Orientation- while supplying the product to the consumer, the suppliers are required to maintain a coordination system with the importers. It requires the correct flow of the information which includes updating the importers about the location and the state of the product. This process is not as easy as it sounds (Wu, Liao, Tseng & Chiu, 2016). A large number of employees are required to carefully execute the whole process. Most of the times many technical errors can occur which made it impossible to facilitate the information between different sources. So that is why this process is quite challenging and requires a lot of attention while executing it.
Quality and safety of meat- Before supplying the products, the SCM should be designed in such a way that it ensures the better quality and safety of the products while the movements. There is a lot of pressure on the exporters from the retailers and the importers’ side. That means the SCM should be designed carefully in order to trace the product, ensure the safety of the product, which means that food quality management should be effectively executed. Managers of the RICA are required to lay out some schemes in order to come up with better ideas about processing, handling, monitoring and facilitating the products smoothly (Gunasekaran & Kobu, 2007).
Farm management- The production of meat can only be better if the animals on the farms are healthy. In order to obtain healthy meat, the animals require better healthcare both in the form of food and medical supplies. The initiation of the meat chain takes place from the farm itself where the animals are breaded. Better food with nutrients ensures that the animals are healthy and disease free. It also helps the animals to prevent themselves from any kind of contamination let it be, disease, chemicals or any kind of alien bodies. Better food with essential nutrients is the key element to successfully fatten the animal. For all this to happen, the managers are required to come up with different schemes like animal welfare, animal transport, animal health, and monitoring programs. Managers of the Rica industry are required to do regular audits and inspection of the animals to ensure their better health. It is quite challenging and even very costly procedures. It gives a challenge to the managers to innovate better schemes for the animal safety and health care programs in farms.
To overcome the dilemma of evaluating and executing the SCM, GAP analysis is one of the best approaches. GAP analysis helps with evaluating and observing the gap between the aim and the pre-assumed results (Zokaei & Hines, 2007). It analyses the extent of the tasks and all the ways in which a gap can be created. GAP analysis compares the current performance level of the organization with the previous ones. Along with that it also analyses the gap between the current level of allocation of the resources with the optimized distribution of the resources. It also allows to analyses the SWOT condition of the firm. In which strength, weaknesses, opportunities and the threats of the entity are measured and the after carefully examining the results, possible strategies are played out. In addition, other strategies can be obtained based on:
A strategy is decided based on gap width, for instance, if the gap width is less that means that the stability strategy can be used and if the gap is bigger than expansion strategy is required. Retrenchment strategies can be used in the case of bad performance in the past.
Four types of GAP
1 Performance GAP: Performance gap is the difference or distance between the actual performance and the expected performance.
2 Profit GAP: Profit gap is the gap between the target profit and the actual profit
3 Product GAP: The gap between actual sales and the expected sales in the market is called the product or market sales.
4 Manpower GAP: the variance between the actual number of workforce and the required amount of workforce is called manpower gap.
All these types of gaps help the firm to adopt different strategies and overcome the situation.
Rica cold meat manufacturers and suppliers can use the GAP approach to solve the gap issue of the Supply chain management. It will help the managers to use different techniques to solve the issues by analyzing all the possible risks. This is a qualitative approach to find out all the risks associated with laying out new SCM strategies. Rica will be easily able to identify every possible risk associated with them, performance, capability, profits, and sales. Since this approach uses the past and present performance comparison, therefore, it will be very easier for the managers of Rica to use this approach for SCM.
Globalization asks for the need to expand the sales of the organization into different markets on the global level. While taking the product in the global market, the industry is required to make some changes in the product according to the different cultures and the preferences (scm.ncsu 2017). This induces a risk of losing control over the management of the inventor and visibility. Therefore, it burdens the industry with a load of different data management all across the geographic aspects. Another risk associated with the globalization is outsourcing. Some companies move their manufacturing operations to different countries because of the reduced manufacturing costs, labor costs, low transportation rates, low rates of raw material etcetera. This is also known as outsourcing. Although this process is cost- efficient it increases the complexities of the supply chain in different locations. And to deal with coordinates, suppliers across borders, logistics and the storage extra efforts and services are required. For example, companies like Morgan Beef and Lentaba Meat Pvt. Ltd. Experienced the impact of globalization in both the positive as well as negative aspects. These companies get opportunities to supply their product at global level as well as these companies are facing the market competition.
There is the certain quality level of the products decided by the importers and based on that they place their orders. Although in the meat industry while supplying the product in the global market, the traders need to make sure that the product is of better quality and meets the requirements of the customers. They are also required to make the quality and safety check on the products from time to time. The products go through several safety and quality test before reaching to the importers.
In the meat industry, the consumers want to try new and different products from time to time. Customer’s behavior and demands are mainly affected by, cultural, religious, and social factors. For instance, nowadays more and more people going for the cold stored meat, which makes it easier for them to use. The customers want different kind of features in the products that vary in many ways like, appearance, textures, mass, and taste etcetera. For instance, red meat is in high demand in some part of Africa whereas other wants beef. The variation in these requirements affects the market, which eventually affects the manufacturer.
While supplying the stock on an international level, there are many factors, which should be considered by the suppliers. While transferring the product, the most important thing is to maintain the quality and safety level of the product as discussed above. Another issue is different time zones (Fernie, 2008). While transferring the product to other countries time zone clash occur which can affect the working hours of the employees and therefore their deliveries too? It can also cause delays in the shipments and since this industry delivers food that is why it is very important to consider the quality of food is the same and does not get ruined. This can be a major issue since Africa is a country with extreme weather conditions. Different weather condition can turn into adverse one and can ruin the quality of the food, therefore; it is very hard to manage the quality of the food along with keeping the track of the product’s location. It requires a huge number of employees to keep an eye on everything regarding the logistics. For example, Lentaba Meat (Pty) Ltd uses its own shipping facilities to avoid any delay in the transportation because of the other delivery that may happen sometimes in case of a general shipment provided by shipping companies.
While transferring the product across borders, the company is required to consider each and every kind of law and regulations of the country they are supplying to. Political environment can easily affect the logistics anytime. All the fluctuations in the laws and policies can even impact the meat industry badly because bringing the product in the global market requires international logistics and in some countries (Janssen, Johnson & Schaltegger, 2015), the laws can be strict regarding the logistics, therefore it also affects the performance level of the company. Another issue is currency fluctuation, which directly affects the financial status of the company. The economy also affects the pricing strategy of the product according to the high and low-level 0f the economy. There are other factors like civil wars, corruption, strikes, environmental disasters etcetera can also affect the supply chain on the global levels. For example, investors of meat industry like Morgan Beef and other meat companies are facing problems due to the complex political and social issues Garver 2017). These complex political issues are making it difficult for SMEs to operate efficiently.
The above-mentioned factor really affects the supply chain on a global way in several adverse manners and to overcome them, there are several recommendations mentioned below.
Globalization gives the meat industry a better chance to make growth in the business and bring diversity. SCM can be designed according to these problems, managing, and integrating them with the help of a different strategy. All these issues can be solved with the help of proper management. GAP analysis as discussed above will be the perfect approach. The managers should include the data from different location, culture, societies etcetera to work according to the needs of the customers and then manufacture the product accordingly. The key solution to these problems can be data management along with the proper integration. Connecting the supply chains of both parties can be in the interest of both parties and result in a positive outcome. It will give the manufacturer a clear vision regarding the supply chain.
Conclusion
The above report presents a complete analysis of the supply chain management in the meat industry. It shows how the SCM help the importers to easily run their goods flow and the movements of the products. It also discusses the positive and negative attributes of the meat industry, which includes several challenges like managing the animals for their better health so that a good quality and tender meat can be obtained. This report also puts light on the positive attributes in the meat industry like, better integration of SCM and delivering the products in an efficient manner. Another segment of this report explains a few challenges of the SCM and different ways to solve them with the help of GAP analysis. It also explains the SCM challenges on the global level and how to overcome the situations with the help of data management and better integration of the data efficiently. This approach improves trust with the customers and builds a strong relationship.
References
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