Case Study – Fresh Produce Value Chain Transformation

Industry:  Intensive horticulture

The problem:  In the space of five years consumer and market preferences for fruit A changed rapidly from large fruit sold individually to small fruit sold in a pre-packaged form.  The industry participant’s value chain did not evolve in line with this trend leading to;

  • Approximately 40% of raw material falling outside specification for premium markets.
  • Approximately 25% more hectares being planted in order to meet customer demand.
  • Rising processing costs and declining profitability

The solution: a multidisciplinary value chain team implemented a series of improvement projects over the course of three production seasons that;

  • Increased the portion of raw material in specification for premium markets from 60% to 85%.
  • Increased the premium packed yield per hectare farmed by 25%.
  • Substantially reduced the number of hectares planted decreasing significantly the management, technical and operational resources consumed by the enterprise.
  • Dramatically increasing packing shed throughput, labour, plant and equipment utilisation.

In the space of five years, consumer and market preferences for fruit X evolved rapidly from large fruit sold individually to small fruit sold in a packaged form.  A long term category participant’s primary production, harvesting, processing and packing systems & practises had not evolved in line with this trend leading to;

  • Approximately 40% of raw material falling outside specification for premium markets.
  • Approximately 25% more hectares than was strictly necessary be planted in order to meet customer demand.
  • Excessive management, technical & operational resources being consumed by the enterprise.
  • Substantial non premium raw material being transported from farm to the packing shed for processing.
  • Over processing in the packing shed driving up wages and wear and tear on plant & equipment.
  • Periodic under and over production disrupting the continuity of supply and customer satisfaction.
  • Marketing of unwanted, non premium product driving down average return pricing.

In order to realign the value chain with the market and drive improved efficiency and effectiveness, a multidisciplinary value chain team was formed.

Utilising the primary production, technical, operational, QA, post harvest & marketing expertise of the team, the value stream was mapped and high impact improvement initiatives were identified.

Over the course of three growing seasons, the value chain team systematically reinvented the primary production system, realigned the production schedule, re-engineered the processing & packing facility and retraining the workforce.  Collectively these initiatives resulted in;

  • Improved engagement and commitment of the value chain team and wider workforce.
  • Increased portion of raw material in specification for premium markets to 85%, thereby significantly increasing returns.
  • Improved premium packed yield per hectare farmed by 25%.
  • A substantial reduction in the number of hectares planted, decreasing significantly the management, technical and operational resources consumed by the enterprise.
  • A dramatic increase in packing shed throughput, labour, plant and equipment utilisation.
  • Improved integrity of the cool chain and consequently product shelf life.
  • A dramatic improvement in the continuity and freshness of the product supplied to customers.