Strategic supply chain management factors influencing agribusiness innovation utilization

Purpose – The purpose of this paper is to examine empirically, an industry development paradox, using embryonic literature in the area of strategic supply chain management, together with innovation management literature. This study seeks to understand how, forming strategic supply chain relationships, and developing strategic supply chain capability, influences beneficial supply chain outcomes expected from utilizing industry-led innovation, in the form of electronic business solutions using the internet, in the Australian beef industry. Findings should add valuable insights to both academics and practitioners in the fields of supply chain innovation management and strategic supply chain management, and expand knowledge to current literature. Design/methodology/approach – This is a quantitative study comparing innovative and non-innovative supply chain operatives in the Australian beef industry, through factor analysis and structural equation modeling using PAWS Statistical V18 and AMOS V18 to analyze survey data from 412 respondents from the Australian beef supply chain. Findings – Key findings are that both innovative and non-innovative supply chain operators attribute supply chain synchronization as only a minor indicator of strategic supply chain capability, contrary to the literature; and they also indicate strategic supply chain capability has a minor influence in achieving beneficial outcomes from utilizing industry-led innovation. These results suggest a lack of coordination between supply chain operatives in the industry. They also suggest a lack of understanding of the benefits of developing a strategic supply chain management competence, particularly in relation to innovation agendas, and provides valuable insights as to why an industry paradox exists in terms of the level of investment in industry-led innovation, vs the level of corresponding benefit achieved. Research limitations/implications – Results are not generalized due to the single agribusiness industry studied and the single research method employed. However, this provides opportunity for further agribusiness studies in this area and also studies using alternate methods, such as qualitative, in-depth analysis of these factors and their relationships, which may confirm results or produce different results. Further, this study empirically extends existing theoretical contributions and insights into the roles of strategic supply chain management and innovation management in improving supply chain and ultimately industry performance while providing practical insights to supply chain practitioners in this and other similar agribusiness industries. Practical implications – These findings confirm results from a 2007 research (Ketchen et al., 2007) which suggests supply chain practice and teachings need to take a strategic direction in the twenty-first century. To date, competence in supply chain management has built up from functional and process orientations rather than from a strategic perspective. This study confirms that there is a need for more generalists that can integrate with various disciplines, particularly those who can understand and implement strategic supply chain management. Social implications – Possible social implications accrue through the development of responsible government policy in terms of industry supply chains. Strategic supply chain management and supply chain innovation management have impacts to the social fabric of nations through the sustainability of their industries, especially agribusiness industries which deal with food safety and security. If supply chains are now the competitive weapon of nations then funding innovation and managing their supply chain competitiveness in global markets requires a strategic approach from everyone, not just the industry participants. Originality/value – This is original empirical research, seeking to add value to embryonic and important developing literature concerned with adopting a strategic approach to supply chain management. It also seeks to add to existing literature in the area of innovation management, particularly through greater understanding of the implications of nations developing industry-wide, industry-led innovation agendas, and their ramifications to industry supply chains.

The new supply chains : the Multichannel Networks

Digital innovation is transforming the media and entertainment industries. The professionalization of YouTube’s platform is paradigmatic of that change. The 100 original channel initiative launched in late 2011 was designed to transform YouTube’s brand through production of a high volume of quality premium video content that would more deeply engage its audience base and in the process attract big advertisers. An unanticipated by-product has been the rapid growth of a wave of aspiring next-generation digital media companies from within the YouTube ecosystem. Fuelled by early venture capital some have ambitious goals to become global media corporations in the online video space. A number of larger MCNs (Multi-Channel Networks) - BigFrame, Machinima, Fullscreen, AwesomenessTV, Maker Studios , Revision3 and DanceOn - have attracted interest from media incumbents like Warner Brothers, DreamWorks, Discovery, Bertlesmann, Comcast and AMC, and two larger MCNs Alloy and Break Media have merged. This indicates that a shakeout is underway in these new online supply chains, after rapid initial growth. The higher profile MCNs seek to rapidly develop scale economies in online distribution and facilitate audience growth for their member channels, helping channels optimize monetization, develop sustainable business models and to facilitate producer-collaboration within a growing online community of like-minded content creators. Some MCNs already attract far larger online audiences than any national TV network. The speed with which these developments have occurred is reminiscent of the 1910s, when Hollywood studios first emerged and within only a few years replaced the incumbent film studios as the dominant force within the film industry.

Facing the wave of change: Stakeholder perspectives on climate adaptation for Australian seafood supply chains

Climate change is one of the most important issues confronting the sustainable supply of seafood, with projections suggesting major effects on wild and farmed fisheries worldwide. While climate change has been a consideration for Australian fisheries and aquaculture management, emphasis in both research and adaptation effort has been at the production end of supply chains—impacts further along the chain have been overlooked to date. A holistic biophysical and socio-economic system view of seafood industries, as represented by end-to-end supply chains, may lead to an additional set of options in the face of climate change, thus maximizing opportunities for improved fishery profitability, while also reducing the potential for maladaptation. In this paper, we explore Australian seafood industry stakeholder perspectives on potential options for adaptation along seafood supply chains based on future potential scenarios. Stakeholders, representing wild capture and aquaculture industries, provided a range of actions targeting different stages of the supply chain. Overall, proposed strategies were predominantly related to the production end of the supply chain, suggesting that greater attention in developing adaptation options is needed at post-production stages. However, there are chain-wide adaptation strategies that can present win–win scenarios, where commercial objectives beyond adaptation can also be addressed alongside direct or indirect impacts of climate. Likewise, certain adaptation strategies in place at one stage of the chain may have varying implications on other stages of the chain. These findings represent an important step in understanding the role of supply chains in effective adaptation of fisheries and aquaculture industries to climate change.

The reliability of supply of feed grains in the northern region

Reliability of supply of feed grain has become a high priority issue for industry in the northern region. Expansion by major intensive livestock and industrial users of grain, combined with high inter-annual variability in seasonal conditions, has generated concern in the industry about reliability of supply. This paper reports on a modelling study undertaken to analyse the reliability of supply of feed grain in the northern region. Feed grain demand was calculated for major industries (cattle feedlots, pigs, poultry, dairy) based on their current size and rate of grain usage. Current demand was estimated to be 2.8Mt. With the development of new industrial users (ethanol) and by projecting the current growth rate of the various intensive livestock industries, it was estimated that demand would grow to 3.6Mt in three years time. Feed grain supply was estimated using shire scale yield prediction models for wheat and sorghum that had been calibrated against recent ABS production data. Other crops that contribute to a lesser extent to the total feed grain pool (barley, maize) were included by considering their production relative to the major winter and summer grains, with estimates based on available production records. This modelling approach allowed simulation of a 101-year time series of yield that showed the extent of the impact of inter-annual climate variability on yield levels. Production estimates were developed from this yield time series by including planted crop area. Area planted data were obtained from ABS and ABARE records. Total production amounts were adjusted to allow for any export and end uses that were not feed grain (flour, malt etc). The median feed grain supply for an average area planted was about 3.1Mt, but this varied greatly from year to year depending on seasonal conditions and area planted. These estimates indicated that supply would not meet current demand in about 30% of years if a median area crop were planted. Two thirds of the years with a supply shortfall were El Nino years. This proportion of years was halved (i.e. 15%) if the area planted increased to that associated with the best 10% of years. Should demand grow as projected in this study, there would be few years where it could be met if a median crop area was planted. With area planted similar to the best 10% of years, there would still be a shortfall in nearly 50% of all years (and 80% of El Nino years). The implications of these results on supply/demand and risk management and investment in research and development are briefly discussed.

Strategic Analysis: A key factor in developing horticultural supply chains in transitional Asian economies

Globalisation is set to have a major impact on world horticultural production and distribution of fruit and vegetables throughout the world. In contrast to developing countries such as China, production and consumption of fresh fruit and vegetables in most developed countries is relatively static. For developed countries, we are starting to see consolidation in the number of farms producing fruit and vegetables with falling or static prices and real farm incomes. Global supply chains are now dominated by a few large multi-national retailers supplied by preferred trans-national distribution companies. The major competitive advantages that are emerging are consistency of supply of high quality product over an extended season and the control of genetic resources and their marketing. To capture these new competitive advantages, new strategic analyses and planning processes must be implemented. In the past, strategic analyses and planning has been undertaken on an ad hoc basis without accurate global intelligence. In the future, working ‘on the supply chain’ will become equally, if not more important, than working ‘in the supply chain’. A revised approach to strategic planning, which encompasses and adjusts for the changes caused by globalisation, is urgently needed. A new 6-step strategic analyses process is described.

Using a supply chain approach to guide R&D

Consumers today are presented with an increasing array of products. The growing competition for consumer expenditure requires a whole of supply chain approach to maintain market share for existing cultivars and to successfully commercialise new cultivars. The supply chain needs to deliver value and satisfaction to the end customer and profitability to their members. Critical to getting the product right is developing inherent robustness into the cultivar, and developing processes and systems through the whole supply chain that maintain product quality and add value. This paper describes the approach we have used in working with supply chains in Australia and Indonesia to identify priority areas for improvement. Our experience demonstrates the need for a champion in the supply chain with significant influence and a desire to improve. The paper also describes our approach towards improving a specific supply chain to achieve successful commercialisation of a new cultivar. The cultivar was primarily selected for good production characteristics and attractive visual appeal. The performance of the fruit is being monitored from farm to retail shelf to identify points where quality is lost and practices can be improved. A targeted R&D program is investigating ways of improving production efficiency (nutrition, flowering and canopy management), maturity standards to optimise flavour, harvesting and packing practices to reduce skin damage, and ripening and handling practices to optimise shelf life. This integrated approach is based on similar approaches used to improve the performance of existing mango and avocado cultivars.

Adoption of environmental assurance in pastoral industry supply chains - Market failure and beyond

This paper describes adoption rates of environmental assurance within meat and wool supply chains, and discusses this in terms of market interest and demand for certified 'environmentally friendly' products, based on phone surveys and personal interviews with pastoral producers, meat and wool processors, wholesalers and retailers, and domestic consumers. Members of meat and wool supply chains, particularly pastoral producers, are both aware of and interested in implementing various forms of environmental assurance, but significant costs combined with few private benefits have resulted in low adoption rates. The main reason for the lack of benefits is that the end user (the consumer) does not value environmental assurance and is not willing to pay for it. For this reason, global food and fibre supply chains, which compete to supply consumers with safe and quality food at the lowest price, resist public pressure to implement environmental assurance. This market failure is further exacerbated by highly variable environmental and social production standards required of primary producers in different countries, and the disparate levels of government support provided to them. Given that it is the Australian general public and not markets that demand environmental benefits from agriculture, the Australian government has a mandate to use public funds to counter this market failure. A national farm environmental policy should utilise a range of financial incentives to reward farmers for delivering general public good environmental outcomes, with these specified and verified through a national environmental assurance scheme.

Stakeholder expectations for environmental assurance in agriculture: Lessons from the pastoral industry

This paper outlines the expectations of a wide range of stakeholders for environmental assurance in the pastoral industries and agriculture generally. Stakeholders consulted were domestic consumers, rangeland graziers, members of environmental groups, companies within meat and wool supply chains, and agricultural industry, environmental and consumer groups. Most stakeholders were in favour of the application of environmental assurance to agriculture, although supply chains and consumers had less enthusiasm for this than environmental and consumer groups. General public good benefits were more important to environmental and consumer groups, while private benefits were more important to consumers and supply chains. The 'ideal' form of environmental assurance appears to be a management system that provides for continuous improvement in environmental, quality and food safety outcomes, combined with elements of ISO 14024 eco-labelling such as life-cycle assessment, environmental performance criteria, third-party certification, labelling and multi-stakeholder involvement. However, market failure prevents this from being implemented and will continue to do so for the foreseeable future. In the short term, members of supply chains (the people that must implement and fund environmental assurance) want this to be kept simple and low cost, to be built into their existing industry standards and to add value to their businesses. As a starting point, several agricultural industry organisations favour the use of a basic management system, combining continuous improvement, risk assessment and industry best management practice programs, which can be built on over time to meet regulator, market and community expectations.

Polychaete-assisted sand filters – prawn farm wastewater remediation trial

Medium bedding sand which is commonly available in coastal sedimentary deposits, and a marine polychaete-worm species from Moreton Bay recently classified as Perinereis helleri (Nereididae), were deployed in a simple low-maintenance sand filter design that potentially has application at large scale. Previous work had shown that this physical and biological combination can provide a new option for saline wastewater treatment, since the worms help to prevent sand filter blocking with organic debris and offer a profitable by-product. To test the application of this new concept in a commercial environment, six 1.84 m2 Polychaete-assisted sand filters were experimentally tested for their ability to treat wastewater from a semi-intensive prawn culture pond. Polychaetes produced exclusively on the waste nutrients that collected in these gravity-driven sand filters were assessed for their production levels and nutritional contents. Water parameters studied included temperature, salinity, pH, dissolved oxygen (DO), oxidation/ reduction potential (redox), suspended solids, chlorophyll a, biological oxygen demand (BOD), and common forms of nitrogen and phosphorus. Pond water which had percolated through the sand bed had significantly lower pH, DO and redox levels compared with inflow water. Suspended solids and chlorophyll a levels were consistently more than halved by the process. Reductions in BOD appeared dependant on regular subsurface flows. Only marginal reductions in total nitrogen and phosphorus were documented, but their forms were altered in a potentially useful way: dissolved forms (ammonia and orthophosphate) were generated by the process, and this remineralisation also seemed to be accentuated by intermittent flow patterns. Flow rates of approximately 1,500 L m-2 d-1 were achieved suggesting that a 1 ha polychaete bed of this nature could similarly treat the discharge from a 10 ha semi-intensive prawn farm. Sixteen weeks after stocking sand beds with one-month-old P. helleri, over 3.6 kg of polychaete biomass (wet weight) was recovered from the trial. Production on a sand bed area basis was 328 g m-2. Similar (P>0.05) overall biomass production was found for the two stocking densities tested (2000 and 6000 m-2; n = 3), but survival was lower and more worms were graded as small (<0.6 g) when produced at the higher density (28.2 ± 1.5 % and approx. 88 %, respectively) compared with the lower density (46.8 ± 4.4 % and approx. 76 %, respectively). When considered on a weight for weight basis, about half of the worm biomass produced was generally suitable for use as bait. The nutritional contents of the worms harvested were analysed for different stocking densities and graded sizes. These factors did not significantly affect their percentages of dry matter (DM) (18.23 ± 0.57 %), ash (19.77 ± 0.80 % of DM) or gross energy 19.39 ± 0.29 MJ kg-1 DM) (n = 12). Although stocking density did not affect the worms’ nitrogen and phosphorus contents, small worms had a higher mean proportion of nitrogen and phosphorus (10.57 ± 0.17 % and 0.70 ± 0.01 % of DM, respectively) than large worms (9.99 ± 0.12 % and 0.65 ± 0.01 % of DM, respectively) (n = 6). More lipid was present in large worms grown at the medium density (11.20 ± 0.19 %) compared with the high density (9.50 ± 0.31 %) and less was generally found in small worms (7.1-7.6 % of DM). Mean cholesterol and total phospholipid levels were 5.24 ± 0.15 mg g-1 and 13.66 ± 2.15 mg g-1 DM, respectively (n = 12). Of the specific phospholipids tested, phosphatidyl-serine or sphingomyelin were below detection limits (<0.05 mg g-1), whilst mean levels of phosphatidyl-ethanolamine, phosphatidyl-inositol, phosphatidyl-choline and lysophosphatidyl-choline were 6.89 ± 1.09, 0.89 ± 0.26, 4.04 ± 1.17 and 1.84 ± 0.37 mg g-1, respectively (n = 12). Culture density generally had a more pronounced effect on phospholipid contents than did size of worms. By contrast, worm size had a more pronounced effect on total fatty acid contents, with large worms containing significantly higher (P<0.001) levels on a DM basis (46.88 ± 2.46 mg g-1) than smaller worms (27.76 ± 1.28 mg g-1). A very broad range of fatty acids were detected with palmitic acid being the most heavily represented class (up to 14.23 ± 0.49 mg g-1 DM or 27.28 ± 0.22 % of total fatty acids). Other heavily represented classes included stearic acid (7.4-8.8 %), vaccenic acid (6.8-7.8 %), arachidonic acid (3.5-4.4 %), eicosapentaenoic acid (9.9-13.8 %) and docosenoic acid (5.7-7.0 %). Stocking density did not affect (P>0.05) the levels of amino acids present in polychaete DM, but there was generally less of each amino acid tested on a weight per weight basis in large worms than in small worms. This difference was significant (P<0.05) for the most heavily represented classes being glutamic acid (73-77 mg g-1), aspartic acid (50-54 mg g-1), and glycine (46-53 mg g-1). These results demonstrate how this polychaete species can be planted and sorted at harvest according to various strategies aimed at providing biomass with specific physical and nutritional qualities for different uses.

International advances in prawn farm recirculation technology

This report provides details of visits and investigations conducted during an international study tour by the author.

Growing banana prawns in prawn farm settlement ponds to utilise and help remove waste nutrients.

To assess their utility for profitable wastewater bioremediation, banana prawns, Penaeus (Fenneropenaeus) merguiensis (de Man), were stocked at low densities (1 – 5 m-2) and grown without supplemental feeding in five commercial-prawn-farm settlement ponds (0.3 to 6.0 ha). The prawns free-ranged in the variously designed ponds for 160 to 212 days after stocking as PL15. Survival estimates ranged from 12% to 60% with production of 50 – 528 kg ha-1. Over 1150 kg of marketable product was produced in the study. Exceptional growth was monitored at one farm where prawns reached an average size of 17g in 80 days. Nutrients in water flowing into (8 - 40 ML d-1) and out of the settlement pond at that farm were assessed twice weekly along with routine water quality measurements. Only small differences in water qualities were detected between waters running into and out of this settlement pond. Total nitrogen levels gradually increased from 1 - 1.5 mg L-1 early in the season to over 3 mg L-1 towards the end of the season. Total phosphorus levels similarly rose from 0.1 - 0.2 mg L-1 to 0.3 - 0.4 mg L-1 in the middle of the season, but fell to 0.2 – 0.3 mg L-1 towards the end when approximately 12,000 prawns were harvested with a total weight of 175 kg. No significant differences (P > 0.05) were detected in the overall acceptability of prawns harvested from each of the 5 settlement ponds in small-scale consumer sensory analyses. The prawns from settlement ponds were rated similarly to banana prawns grown with commercial diets at two other establishments. Microbiological analyses of prawns from all farms showed bacterial levels to be well within food-grade standards and lower than prawns produced in a normal growout pond. These results demonstrate that high quality food grade banana prawns can be produced in these wastewater treatment systems.

Bivalves for the remediation of prawn farm effluent: identification of some potentially useful species in Southern Queensland

Several species of oysters, clams and mussels are currently being used around the world to create extra profits and help remediate waste-waters from mariculture operations. To identify opportunities and potentially suitable species of bivalves for remediation of prawn farm effluent in Australia, recent literature dealing with bivalve filtration is reviewed, and species occurring naturally in a banana prawn, Penaeus (Fenneropenaeus) merguiensis, grow-out pond and effluent streams at the Bribie Island Aquaculture Research Centre (BIARC) were collected, identified and assessed in terms of their tolerance of high silt loadings over 3 months. Three bivalve species predominated in the BIARC case study. These were the mud ark, Anadara trapezia, the rock oyster, Dendostrea folium, and the pearl shell, Pinctada maculata. The mud ark demonstrated the highest tolerance of silt loading (99% survival), followed by pearl shells and rock oysters (88 and 63% survival respectively).

Testing the effectiveness of the SKIM foam fractionator to reduce nutrient levels in prawn farm effluent

To experimentally investigate the effect of the “SKIM” mechanical foam fractionator on suspended material and the nutrient levels in prawn farm effluent, a series of standardised short-term treatments were applied to various effluent types in a static 10,000-litre water body. Prawn pond effluents were characterised by watercolour and dominance of phytoplankton species. Three effluent types were tested, namely 1) particulate-rich effluent with little apparent phytoplankton, 2) green mircoalgal bloom predominately made up of single celled phytoplankton, and 3) brown microalgal bloom with higher prevalence of diatoms. The effluent types were similar (P>0.05) in non-volatile particulate material, and nitrate/nitrite but varied from each other in the following ways: 1) The particulate-rich effluents were lower (P<0.05) in volatile solids (compared to brown blooms), total Kjeldahl nitrogen, dissolved organic nitrogen, dissolved organic phosphorus and chlorophyll a (compared to both green and brown blooms). 2) The brown blooms were higher (P<0.05) in ammonia (compared to green blooms), total nitrogen and total phosphorus (compared to both green and particulate-rich effluent), but were lower (P<0.05) in inorganic phosphorus (compared to both green and particulate-rich effluent). 3) The green blooms were higher (P<0.05) in dissolved (both organic and inorganic) phosphorus (compared to both brown and particulate-rich effluents). Although the effluent types varied significantly in these aspects the effect of the Skim treatment was similar for all parameters measured except total phosphorus. Bloom type and Skim-treatment period significantly (P<0.05) affected total Kjeldahl phosphorus concentrations. For all effluent types there was a continuous significant reduction (P<0.05) in total Kjeldahl phosphorus during the initial 6-hour treatment period. Levels of total suspended solids and volatile suspended solids in all effluent types were significantly (P<0.05) reduced in the first 2 hours but not thereafter. Non-volatile suspended solids were also significantly (P<0.05) reduced in the first 2 hours (30 to 40 % reduction) and a further 40% reduction occurred in the particulate-rich effluent over the next 2 hours. Mean values for total ammonia, dissolved organic nitrogen, total Kjeldahl nitrogen, total nitrogen, chlorophyll a and dissolved organic or inorganic phosphorus levels were not significantly (P>0.05) affected by the Skim unit in any bloom type during the initial 6 hours of testing. Nevertheless, non-significant nitrogen reductions did occur. Foam production by the Skim unit varied with different blooms, resulting in different concentrate volumes and different end points for separate experiments. Concentrate volumes were generally high for the particulate-rich and green blooms (175 – 370 litres) and low for the brown blooms (25 – 80 litres). This was due to the low tendency of the brown bloom to produce foam. This generated higher nutrient concentrations in the associated condensed foam, but may have limited the treatment efficiency. The results suggest that in this application, the Skim unit did not remove micro-algae as effectively as was anticipated. However, it was effective at removing other suspended solids. Considering these attributes and the other uses of this machinery documented by the manufactures, the unit’s oxygenation mixing capacities coupled with inorganic solids removal may provide a suitable mechanism for construction of a continuously mixed bioreactor that utilises the filtration and profit making abilities of bivalves.

Options for biogas cleaning and use on-farm

This project follows on from and utilises a floating cover currently being installed on the primary effluent pond at a southern piggery.

Methane Recovery and use at Grantham Piggery

This report describes the outcomes from the Australian Methane to Markets in Agriculture (AM2MA) research project PRJ-005672 ‘Methane recovery and use at a piggery – Grantham’. This project involved upgrading the biogas extraction system originally installed in conjunction with a partial floating cover, retro-fitted to the primary anaerobic pond at the QNPH Grantham piggery under an earlier AM2MA project (Project No. PRJ-003003), as described by Skerman et al (2011). Following the system upgrade, this project also included installing a biogas reticulation pipeline to supply biogas from the extraction system, to a water heating system used to heat water circulated through underfloor heating pads in the piggery farrowing sheds. This biogas fired water heating system has the potential to significantly reduce on-farm energy costs by replacing a significant proportion of the Liquid Petroleum Gas (LPG) previously used for farrowing shed heating. Further monitoring of the biogas system performance has also been carried out. This report describes the work undertaken and outlines the monitoring results, implications, conclusions and recommendations arising from this work.