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Supply chain exam - Essay Example

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A Case Study on Analysis of “Food Miles” from Supply Chain Perspective Case Study: The CO-OP UK 1. Introduction 1.1 What is Food Miles? Simplistically, Food Miles refers to the distance travelled by foodstuffs from farm gates to the consumers. They are generally measured as tonne-kilometres, i.e…
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Download file to see previous pages The concept of Food Miles was conceived in 1990 by Andrea Paxton in a research paper and was further elaborated in a report (Paxton A. 1994), by the SAFE Alliance, now Sustain, which highlighted concerns over the negative environmental and socio-economic impacts of increasing transport of food. The follow up report from Sustain in 1999 (Hird V et all 1999) showed a continued trend in the UK for food to travel further between farms and consumers, and highlighted more pollution from transport, increased packaging, loss of land and agricultural biodiversity, and greater use of chemicals required in food transit and storage. It attributed the closure of many small country shops and failure of small-scale farms to the activities of a small number of powerful retailers able to source lower-priced food from overseas. The development and application of Food Miles is out of two main concerns: 1. Environmental concern: further a product travels, more greenhouse gases (GHG) are released 2. Regional development concern: buying food locally stimulates the local economy 1.2 Why the CO-OP might consider it? The CO-OP today is the fifth largest retailer in UK with 9% market share in the retail sector in UK. As a senior player in the retail market, it is a moral responsibility of the CO-OP to address the issue which impacts not only the long-term business strategy but also the consumer sentiments towards sustainability and climate change. In fact, there is a compelling business case for the food industry as a whole to improve energy efficiency and reduce dependence on fossil fuel and its corresponding emissions. According to a 2005 study conducted by Lippincott Mercer for “The Carbon Trust” for the UK market, the subject of climate change is bound to get more and more important in the consumer mind. Also, and the food and beverage industry was found to have the highest risk (?6.6bn – 10% of the total market value) of tangible value from climate change. Finally, the CO-OP ethical plan states that “We will reduce the gross GHG emissions from our operations by 35% by 2017”. So, tackling this issue of “Food Miles” should clearly be a priority for the CO-OP. 2. “Food Miles”: The two sides of the coin 2.1 Arguments in favour of adopting “Food Miles” In order not to be left behind, there is a case to adopt “Food Miles” in the overall business strategy. There is evidence that the retailers in UK and worldwide have already started initiatives with “Food Miles” in mind: 1. Sainsbury has annual targets for emissions reduction, and has increased (as part of its low-food miles strategy) the proportion of products sourced domestically to 90% for food that can be grown in the UK. 2. Safeway UK has developed a distribution system, introducing measures to reduce its food miles and the energy consumption of its fleet. 3. In 2005/06, Wal-Mart CEO announced that it plans to boost energy efficiency, increase organic food sales and reduce GHG emissions by 20% by 2012 worldwide. Even the government policy seems to have “Food Miles” concept in the long-term view. In the Food Industry Sustainability Strategy published in 2006, the UK government has proposed key performance indicators for food transportation that include road distance travelled, emissions from land and air transport. Finally, in terms of supply chain issues, ...Download file to see next pagesRead More
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