Strategic Application of SCM in Food Companies: Current Experience and Futur e Opportunities Tom Rathje, Research and Development, Danbred North America, Lincoln, NE 68588-049Gu C! "im, Department o! "#$%, &"', Northern $llinois (niversit), De*alb, $L 605 #! #ntroduction! +irms develop strate) at varios levels i ncldinEnterprise, $nterorani.ational, &orporate, 'siness (nit and +nctional/"perational Diman, 100123 &rrent thininsests that competition ithin some indstries is increasinl) beteen vale s)stems verss individal !irms Lambert et al3, 99823 his evoltion partiall) shi!ts sppl) chain strateies !rom the interor ani.ational to the bsiness-nit level3 No loner is it optimal to !ocs onl) on e!!iciencies ithin internal operations bt the !irm mst noconsider the level o! e!!icienc) attained b) the e ntire vale s) stem3 his level o! virtal interation can be e7pected to increase as !irms seenelevels o! competitive advantae3 #ore importantl), virtal interation ill impact the allocation o! resorces amonvarios members o! the vale s)stem3 ##! Generic SupplChain Strategies! he traditional model o! a sppl) chain as described as linear herein prodcts moved linearl) in one di rection and in!ormation moves linearl) in the opposite direction3 o t)pes o! technolo) have become available hich have and ill contine to spport revoltionar) chanes in sppl) chain strateiesthe internet and c omptinpoer Rosen bam, 10023 he linear model, described a bove, can be trans!orme d into an interconnected netorherein each participant is apprised real-time o! cstomer demand and develops an nderstandino! hothat demand impacts t heir part o! the vale chain3 Advances in c omptinpoer are also important to developine!! icient spplier netors3 &omptinpoer also spports decision spport anal)sis to be deplo)ed across the s)stem3 he !ormation o! a netored, interated sppl) chain spports nmeros strate) initiatives ithin the modern !irm3 $n particlar, man) !irms state that enhancinshareholder ealth is a core vale o! the !irm3 &orporate and opera tional strateies srrondinsppl) chains can mae sini!icant contribtions to this oal Rosenbam, 1002, incldinRedcinthe orincapital demand b) replacininventor) ith in!ormation, improvinthe !loo! cash and, redcinthe inventor) o! spplies !or man!actre3 Enhancinrevene throh more e!!ective cstomer sementation, deliverinthe riht prodct at the riht time, netored prodct development, d)namic pricinand more e!!icient handlino! cstomer service3 &ost redction can be achieved throh improved processes sch as the spport o! lean man!actrinconcepts e33 3$33 2, creation o! the adaptive orani.ation verss reactionar)2, and optimi.ation o! all loistics costs associated ith an order3 Enhanced !i7ed capital e!!iciencies mainl) throh more e!!ective se o! available capacit), chain modelinto discover optimm relationships amonst participants and e!!ective otsorcin3 ###! The Current State of SupplChain Management in Food Sstems! he crrent state o! application o! sppl) chain manaement strateies ithin the eneral !ood indstr) is idel) varied beteen hihl) sophisticated and virtall) non-e7istent3 An e7ample o! a sophisticated s)stem is t hat operated b) $ndependent :rchasin&ooperative, oned b) independent %ba) sandich shop !ranchisees, hich, alonith sppliers and distribtors to the cooperative, invested in the development o! an e7tranet sppl) chain manaement s)stem t o better handle ;38 billion in prchases !or %ba) stores nationide &orbin, 100023 he e7tranet spports the interation o! compter s)stems amonman!actrers, distribtors and ltimatel) %ba) stores3 he e7pected savins ! rom the s)stem as in the rane o! 1-<= o! the overall cost o! inredients3 he !irst phase o! the plan ill permit tracino! orders !rom man!actrers and sppliers to distribtors3 he s)stem ill permit price and per!ormance comparison amondistribtors and man!actrers, monitor contract compliance amonmembers o! the sppl) chain and lend spport to !ood sa!et) initiatives3 An) prodc t not meetinsa!et) o r >alit) standards can be removed !rom the sppl) chain at an) time3 he above e7ample is represents a eneral trend in the !ood indstr) toard e!!icient cstomer response s)stems *rt % almon Associates, 99<23 E!!icient &stomer Response E&R2 is driven !rom the ltimate consmer bacard throh the sppl) chain enablinretailers to more e!!icientl) meet the needs o! consmers, eep costs competitive and insre >a lit)3 E&R itsel! is a eneric strate) to leverae in!ormation that reslts in better service to cstomers3 E&R has as its e) ob?ectives• Efficient Store Assortments "ptimi.e the prodctivit) o! inventories and store space at the consmer i nter!ace3 • Efficient Replenishment"ptimi.e time and cost in the replenishment s)stem3 • Efficient $romotion#a7imi.e the total s)stem e!!icienc) o! trade and consmer promotion3 • Efficient $roduct #ntroductions#a7imi.e the e!!ectiveness o! neprodct development and introdction activities E&R is somehat ni>e to the !oods indstr) as its development as at the consmer end o! the vale s)stem prior to an) developments !rther pstream in the !ood vale s)stem3"ne o! the e7planations !or this development is consolidation ithin the retail sector and the maret poer arnered b) lare !ood service companies sch as %ba), #cDonald@ s and others illiam Reed Brop, 100023 As o! 1000, <4= o! the !ood maret as controlled b) the t op !or rocer) store chains3 $ncreasinmaret poer o! retailers allos them to place more demands pon processors and !ood man!actrers3 hese demands inclde deliver) o! prodct ithin a speci!ied time period, loadino! pallets to speci!ications set b) the retailer,
