Finance

When there is a problem in the supply chain.

Pork carcasses hang on meat hooks at a meat processing plant.

Pork carcasses hang on meat hooks at a meat processing plant.
Image: Photo New Zealand

Rod Slater was only eight years old when he became part of the meat supply chain in New Zealand.

From his father’s butcher shop in Mount Albert, Auckland, he rode out on his motorbike with a parcel of meat in the front compartment to deliver to customers.

The 75-year-old recently retired chief executive of Beef + Lamb New Zealand remembers his first delivery to a rest home when he had to crash his motorcycle to stop it, and the meat came out.

In those days, meat was wrapped in grease and then brown paper.

“Sometimes the meat bleed from the brown paper,” says Slater, recalling another time he was driving home when the family dog ​​sniffed the blood dripping through the wrapping. The package softened, the meat fell on the doorstep, the dog ate it and the slaughter was stained.

Times have changed with the supply chain, Slater says, who took over his father’s butchery and later co-founded Crazy Butchery China. For a start the meat is vacuum packed so that there is no leakage and it lasts longer.

Meat processing has become increasingly sophisticated, high-tech games for the mass market, but it relies heavily on labor.

“No robot can bite a pig or a lamb,” says Slater.

He talks in detail about the work of today’s meat supply chain from “farm to fork” and Delta becoming a variety of game changers. Lockdown has once again put pressure on the process, which has led to an increase. Strict laws to stop butchers And other small retailers working at Level 4.

This was highlighted last week when a technical glitch left the meat routes in the countdown supermarkets empty. The problem has been fixed with the Countdown Meat Ordering System in the North Island, and supermarket meat shelves have been rapidly closed again.

Meat and poultry products on the shelf at a supermarket.

Image: 123 RF

Details contacted both supermarket chains to tell them how their supply chain works but said they were too busy. Not surprisingly, hundreds of their workers were forced to flee, leading to store closures and a shortage of workers.

And that’s where the links are flawed, says Slater, who believes the chain outside the cove is strong. Others say Covid has exposed threats to the entire supply chain and that essential groceries should be stocked as part of the government’s national reserves.

In the case of meat supply, the four-step process from farmer to processor to wholesaler to retailer seems simple, but industry players describe it as an “incredibly complex” journey in which many There are actors. ” He says the period of extension of the lockdown is starting to stir in some parts of the chain.

Take the country’s 93 pig farmers who need to get their animals off the farm every week. When restaurants and butchers close in Level 4 lockdowns, the pigs cannot be moved and the fields become crowded. The government had to step in during last year’s lockdown and buy extra pork.

This is just a product disruption in the supply chain. Supermarkets store 25,000 different items, and each product contains a variety of ingredients. Large-scale distribution centers and inventory are key components and are tested in times of danger.

Sometimes it’s not the products that run out, but the packaging. During last year’s lockdown baking frenzy, customer-sized flour bags were emptied from supermarkets. There was plenty of flour but no bags.

“The real supply chain is not very flexible,” said David Robb, professor of operations and supply chain management at the University of Auckland.

New Zealand has been hit hard by long delays on imported goods, but Rob says even imported ingredients are needed to bring domestic and processed products such as meat and milk to market.

A packet of New Zealand beef mince.  Picture of who is eating New Zealand

Image: RNZ / Claire Eastham Ferley

“We are not self-sufficient in our core industries,” he says.

Plastic wrapping, or parts of it, are often imported, ink is written on the packaging, vehicles, many of their components and fuels are imported.

“Most companies have more than one supplier and these suppliers have more than one supplier. They don’t know who the suppliers are.

Distribution centers are important, highlighted last week’s glitch in the meat ordering process at the Countdown Center in South Auckland, which left the shelf empty.

In the early days of Rod Slater, there was no center for distribution as a butcher.

In most cases, the stock was sold off the farm, where it was auctioned off to butchers, and the truck was taken to the tent. Slater says every butcher shop in Auckland has a hook number. He was 31 years old and owned all the animals on the hook.

Very few animals go through stock sales these days. The farmer often has a contract to supply the meat to the companies that own the house.

“They can say, ‘We’re looking for 500 heads. What do you have?’

They are taken to the sackcloth and smashed into boxes of “prims” or rumps, top sides, sirloins. From there the meat company can sell to the wholesaler who then sells to the retailer.

But the two supermarket chains work differently.

Owned by Woolworths, the Countdown Group has its own stock agents who buy beef and mutton from farmers. Before the meat is sent to the countdown’s main cutting and packaging plant, the pigeons contract to slaughter for the supermarkets.

Its rival, Food Stuffs, a cooperative owned by Pakin Save and New World Chains, buys meat through multiple suppliers, such as Afco and Enzco.

Rob says the distribution center has made groceries cheaper because it enables retailers to keep inventory low, but there is always the risk that it could be pulled out by a strike, a tornado or a quaid.

In the case of Foodstuffs, one distribution center serves North Island stores and the other South Island, with the center disappearing at Auckland Airport. Countdown is a national distribution center in South Auckland.

Most grocery products go through distribution centers but large quantities such as dairy, coke and bread go directly to the store from the supplier.

Despite the double-handling created by the distribution center, Rob says it allows economies to scale and means stores can be filled with trucks of products on a daily basis.

Inventories range from weeks to months, depending on whether a product is going to go bad or canned. New Zealand supermarkets have low inventory to keep prices low.

“There’s not much redundancy,” says Rob. “We like to do cheap things in New Zealand.”

Rob’s colleague at Auckland University, Toa Olson, who also teaches supply chain management, says the IT problem at the Countdown Processing Center shows weakness.

When a processing center is so large, the breakdown has a big impact.

“The supply chain is set up to be cost-effective. Olson says there is not much demand to clean up the supply chain.

She says the lean, time-efficient model is exposed at such times.

“We’ve tried to justify the loss of time. More people are listening to us now.

Olson wants the government to keep a close eye on national resilience, including the storage of some food products as well as medical and fuel reserves as part of its national reserves.

“What would we lack if our borders were closed to people as well as goods?” She asks.

“We can’t leave it on the market altogether. Profitable companies are not charities. It’s not their job to make sure New Zealand survives a disaster.

Rob goes further and suggests that if a new kiwi grocery chain is set up against Foodstuffs and Woolworths, it may need “last resort flexibility”.

The question is which grocery items are most needed? enough? Chocolate?

“When people are upset, they need to eat comfortably,” says Rob.

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