Project Lead
Challenges
The Scottish food and drink sector operates within an environment with greater price instability in product and factor markets, technological advances that enable the tracing and tracking of goods, and increasing consumer concerns about quality, safety, and variety of products. In such an environment, effective business relationships in vertical supply chains are thought to:
- Reduce uncertainty by securing a more stable inflow of orders and increasing quality and safety assurances associated with inputs
- Improve access to crucial resources
- Raise business productivity through improved decision-making or enhanced employee loyalty
Thus, effective collaboration between businesses and the supply chain can potentially boost competitiveness. The Covid-19 pandemic and the EU exit are examples of significant shocks to supply chains. Evidence of how collaboration could help chains is urgently needed.
The key policy drivers of this project are:
- Good Food Nation policy: ensuring food companies are a thriving feature of the economy and places where people want to work
- Scottish Government: supporting the food and drink industry and promoting sustainable production and procurement of domestic produce that is increasingly healthy and environmentally sound
- Ambition 2030: Industry Strategy for Growth: success and growth must translate into greater profitability at the farmgate and on the fishing boat
- UK’s Exit from the European Union (EU): Scottish supply chains affected in terms of their connections with the EU, such as supply chain links like imports of raw materials and exports
Questions
- How can collaboration within Scotland’s food and drink supply chain be better promoted, with a focus on maximising the circulation of value?
Solutions
A framework to assess collaboration and engagement
We are developing a framework to assess collaboration and engagement in Scotland’s food and drink supply chain. We need to conduct a literature review in order to develop this framework based on the latest advances and evidence.
Assessments of collaboration for the pig, beef, dairy and potato supply chains
We are then using this framework to assess collaboration within the pig, beef, dairy and potato supply chains. The framework informs the development of questionnaires and identifies factors to enhance collaboration on the chain and specific points where it can be improved. We are exploring these factors further through interviews with key stakeholders within the supply chain.
Overall, we are identifying the importance of several aspects of Scottish supply chains:
- The degree of collaboration within the Scottish supply chain
- The extent collaboration results in businesses becoming more resource efficient, profitable, productive, and sustainable
- The extent collaboration dampened shocks coming from Covid-19 and EU-Exit
- Identifying new collaboration opportunities and trade-offs
Project Partners
Progress
This project is being developed in consultation with the Food and Drink Federation Scotland, the Scottish Agriculture Organisation Society Ltd. (SAOS), Knowledge Bank at Scotland Food & Drink, Quality Meat Scotland and the Scottish Pigs Producers Association (as pig-to-pork is the first supply chain to be analysed). A framework to assess collaboration and a methodology to be applied to several chains has been prepared. Central to the framework has been the generation of a literature review; this highlight a number of factors that help to identify when a supply chain is collaborative: e.g., trust in supply chain partners, quality of the communication between partners, views about the fairness on the distribution of rewards (profits). This review on collaboration along the supply chain and its importance was circulated amongst RESAS Policy.
An initial analysis, based on interviews with some stakeholders of the pig-to-pork supply chain indicates that the chain has gone through two types of collaboration: horizontal (amongst farmers) and vertical (with processors and in the past with retailers). The horizontal collaboration, which is not new and can be considered as starting in 1979 with the formation of pig cooperatives, has worked well and has been stable. It has been key to ensure the resilience of pig producers to numerous shocks (e.g., policy, market volatility, lack of abattoir). The vertical collaboration has unfortunately broken down several times. It is nevertheless key to try and achieve this type of collaboration, especially for the producers, to ensure economic sustainability. A common project that may keep both parts (producers and processors) of such a vertical collaboration together would be reaching carbon neutrality.
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