An analysis of the South African beef supply chain: from farm to fork.

The primary objective of this dissertation is to perform an analysis of the South African beef supply chain ‘from farm to fork’. This will contribute towards a better understanding of the beef supply chain, aiding collaboration, transparency and supply chain strategies to enhance national industry competitiveness. Currently, the industry, and the supply chain is facing pertinent challenges such as globalisation, the declining consumption of beef, the disconnection of the farmer from the supply chain, illegal slaughtering, a lack of quality and inadequate hygiene practises in some lower throughput abattoirs, the rising food safety concerns (BSE, E.coli, and FMD), and the competitiveness of substitute products (chicken, pork, etc.). A simple and systematic approach is used to analyse the South African beef supply chain ‘from farm to fork’. The information has been discussed with industry experts, via interviews and discussion, to ensure the analysis reflects reality. It is evident that the South African beef supply chain is long, complex and involves various handoff points between role-players and industry governing bodies, as well as various permutations of this supply chain. The red meat industry evolved from a highly regulated environment to a totally deregulated one. The deregulation changes the ‘rules of the game’, and the ‘new rules of the game’ result in additional complexity within the current chain. The supply-side issues play a critical role in creating a sustainable competitive advantage, against substitute products. This highlights the importance of having accurate cattle herd numbers to facilitate proper supply chain planning, in an industry with a cyclical nature and a dependence on uncontrollable factors, such as natural forces and biological factors. This is indeed an issue of concern for the industry. Demand-side issues are influenced by the income of consumers, the availability and price of substitute products, consumer taste and preferences, and consumer expectations. In addition, the effect on demand, of price and income elasticity, and per capita expenditure by different population groups, adds to the complexity of the South African beef supply chain operation. viii The beef supply chain cost analysis -- the weaner cost model -- aims to assign cost, and resources, to each role-player to understand how value and margin is added, within the South African beef supply chain. The analysis revealed some interesting facts, regarding the ‘margins’ and ‘mark-up percentages’. This highlights, in simplistic terms, that some sectors are making more money than others, and examined together, with the cyclical nature of the industry, it is a given that supply chain management principles (collaborations, integration, contracting, etc.) will play an ever increasing role in the future of food supply chains. Eight supply chain management strategies are discussed, to initiate and kick-start the change process to transform the local beef supply chain into a leading-class player. The strategies are: (i) Crafting a supply chain vision; (ii) Traceability, transparency and quality assurance; (iii) Knowledge management and the learning supply chain; (iv) Transformation and AGRIBEE; (v) Measuring performance: supply chain metrics and diagnostics; (vi) Concepts of collaboration in food supply chain management; (vii) Synchronising operations and uncovering hidden opportunities; and, (viii) National agribusiness framework and red meat framework. The South African beef supply chain no longer has an option: it must ‘adapt to survive’. Benefits, in non-food systems, are well documented, with the implementation of supply chain management principles. The analysis concludes by summarising the strategies into meaningful and manageable options recommended for implementation. The recommendations are: · Create a national and red meat agribusiness structure and craft a local supply chain vision · Ensure product quality and establish a positive red meat message that drives demand · Implement productivity gains across the South African beef supply chain · Share market information across the South African beef supply chain · Promote innovation across the South African beef supply chain · Implement research and development initiatives for success.Prof. J.H. du Plessi