issue 3 Professor David Hughes Making Friends and Growing your Business with Baby Boomers.
Retail Supply Chains The importance of quality management systems within supply chains.
50% Reduction in Intake Rejection Rate 3663 First for Foodservice has reduced its intake rejection rate by 50% since implementing Muddy Boots.
Knorr Supplier Conference Celebrating the progress suppliers have made towards meeting Unileverâ€™s sustainability objectives.
WELCOME TO ISSUE 3 OF
THE MUDDY BOOTS MAGAZINE Dear Readers With the London Olympics 2012, we celebrate the many heroic achievements and emotional events that have played out at this year’s games. We all had our fingers crossed that our temperamental weather would not be taking part and dampen our high hopes for Olympic glory. Our record breaking year for weather has wreaked havoc on our agricultural production in the UK and prospects for our grain and fruit harvests remain a concern. But its not just isolated to the UK; North America is in its worst drought since 1956 and prospects for its corn production is anticipated to be 60 million tonnes down; India’s rice and sugar production are being seriously affected by drought as is Siberia, which will see average yields of 1.82 t/ha down from 2.16 t/ha from last year. This further highlights the vulnerability of agriculture to the extremes of weather and the far reaching affect it has on supply chains, work forces, markets and economy. With extreme events due to climate change more commonplace, risk management strategies will play a major part of production criteria going forwards, in order to gain greater food security to feed our ever growing population. It’s not just bouncing babies that are causing concern, in fact it’s the baby boomers (our ageing p opulation) that are growing at the fastest rate – double the rate of the population as a whole. In his latest article Professor David Hughes, Emeritus Professor of Food Marketing, predicts that by 2050 there will be more people older than 60 than younger than 15 worldwide. In his thought-provoking article, David explores the significant opportunities that the food industry has with this growing market: they want good quality food and they’re prepared to pay for it! The importance of quality produce is also touched upon in our second article, ‘A Fresh Approach to Quality Control’, which discusses the importance of quality management systems in supply chains. For many businesses, securing and growing market share around their fresh offer is core to strategy, and maintaining and improving consistency on that quality offer is pivotal to any business that wants to be successful in fresh. Learn more about this, and how an integrated approach to quality control can support improved performance and a more collaborative relationship with your suppliers. We end this issue with some articles written by our customers, about how our q uality control and audit management software have improved the performance of their businesses. Learn how 3663 First for Foodservice, a leading foodservice company in the UK, has reduced its intake rejection rate by 50% at its Swithenbank fresh and fine foods distribution centres since implementing our quality control software. Finally, BASIS (Registration), an independent oganisation that ensures safe and responsible storage, labelling and application of pesticides in the UK, gives us an insight into how they are using technology to improve industry standards. I hope you enjoy this edition of our magazine, and as ever, please do get in touch with your news and views. Join in the conversation @MuddyBootsLtd. Best wishes Jonathan
Jonathan Evans Managing Director Muddy Boots Software
Page 3: Fresh Thinking. Read the Word on the Tweet and Dates for your Diary.
Page 4: Meet our Service Delivery Manager in Australia and read about our recent presentation to Knorrâ€™s global supply-base.
Page 5,6: Professor David Hughes talks about the importance of growing your business with baby boomers.
Page 7,8: We take a look at the importance of quality management systems in retail supply chains.
Page 9: Case Study - 3663 First for Foodservice has halved its intake rejection rate since installing Muddy Boots.
Page 10: Case Study - BASIS (Registration) has used our software to raise industry standards across the storage, handling and safe use of pesticides.
FRESH THINKING WEET!
DATES FOR YOUR DIARY
Itâ€™s amazing what you can say in 140 characters!
Come and see Muddy Boots!
@BBCBreaking Up to 3 million Syrians in need of food, crop and livestock assistance in coming year, says #UN agency
Romeo Bragato 22 - 24 August 2012 Marlborough Convention Centre, NZ
SainsburysPR By 2020, all the fish we sell will be independently certified as sustainable #20by20
BLSA Conference 14 November 2012 KingsGate Conference Centre, Peterborough, UK
WORD ON THE
Verne85 Top notch ice cream and top notch ethics - @ benandjerrysUK I love you more and more every day! #appleyeverafter #spreadequallove Ltd
LAMMA Event 16 - 17 January 2013 Newark & Nottinghamshire Showground, UK Cereals Event 12 - 13 June 2013 Boothby Graffoe, Lincoln, UK
DID YOU KNOW...? 54% of consumers would pay more money for high quality produce - IGD 49% of consumers are shopping 3 or more times a week. 10% higher than 2009 - IGD.
Food and Grocery remains the key driver of footfall to supermarkets.
3663 has reduced its intake rejection rate by 50% since using our Greenlight Quality Control software.
Meet The Team Member... Nick Page Service Delivery Manager ANZ IT and Media degree. The fresh produce and farming industry is relatively new to me but I’m thoroughly enjoying it! My main roles include keeping current clients happy, making sure that they are provided with all the information they require to make informed choices with the software, but also to make sure their requests are best expressed to developers so that their requirements are well met.
It gives me a great insight into several industries, and I’ve developed some really good working relationships with our customers. Being involved in a new pilot for red meat quality control, for an industry quite different to anything we had been involved in before has been really exciting. Other than Batman, probably a movie director.
KNORR SUPPLIER CONFERENCE CELEBRATING THE PROGRESS KNORR SUPPLIERS HAVE MADE Muddy Boots was recently invited to attend the Knorr Agricultural Supplier Summit 2012 in Hamburg. It was an opportunity for Unilever’s Knorr suppliers to come together to celebrate the progress Knorr is making towards reaching their ambitious sustainability goals and recognise those suppliers that were embracing sustainable agriculture according to the Unilever Sustainable Agriculture Code. The Muddy Boots team addressed suppliers on the importance of Muddy Boots’ technology platform that underpins the roll-out of the Sustainable Agriculture Code, some of the challenges faced within complex supply chains and the developments coming through that will support suppliers in their collaborative efforts to meet the clear goals set out by Knorr. Unilever’s on Track! 24% of Unilever’s agricultural raw materials were sustainably sourced in 2011. Over half of Unilever’s vegetable suppliers are using Muddy Boots and 80 have successfully completed the self-verification process.
PROFESSOR DAVID HUGHES
MAKING FRIENDS & GROWING YOUR BUSINESS WITH BABY BOOMERS
Everybody likes a birthday and on October 31st 2011, the world celebrated the birth of our world’s 7th billion human inhabitant. In 1800, we barely mustered a population of 1 billion, and it took the next 130 years for us to reach 2 billion. In 1973, I emigrated to Canada and the Hughes family and the rest of the world was well into procreation – world population hit 3.5 billion. Less than 40 years later, this number had doubled. Media stories abound about the requirement to increase food output by between 50-100% to feed our population in 40 years time. Food security is a hot topic, linked with a need for us to produce more food using fewer resources and with a softer impact on our global environment. Too right, we’ll have to.
world food aid? Mind you, half of the top ten fastest growing economies in the world are in Africa, the trouble is that their GDP is in the hands of the disproportionately few, who are often difficult-to-budge politicians and the military who view “trickle down income to the poor” as being derisible not desirable!
Very roughly, of the 2 billion extra people we’ll add to this earth over the next 40 years, 1 billion will be in Asia and most of the other extra billion will be in Africa. In global terms, it’ll be up a jot in North and South America, static at best in Western Europe and, likely, down in Eastern Europe.
Here’s some more telling statistics for you: the 60+ age group’s share of national income is continuing to grow significantly in almost every country; and in France, Japan, UK, Germany, Belgium, and Scandinavia, the proportion will exceed 30% by 2020 and much of this will be discretionary income; what’s more, the oldies own 75% of the wealth (they have paid off the mortgage and have little or no debt). In most cases they will expect a lot from the state, in terms of health care, pensions, and other social services.
Exporters and the international FMCG companies are drooling with excitemement surrounding the opportunities in the high growth Asian countries, but there is a worrisome question mark for Africa – will the population surge be translated into exciting additional effective commercial demand, or will the result be social chaos and a heavy draw down of
So, the population is ageing although too many are limping along in illhealth. By the turn of the 20th Century, the number of people older than 60 overtook those younger than 16 in the G7 countries . By 2050, there will be more people older than 60 than younger than 15 worldwide. Globally, this older population is growing at more than double the rate of the population as a whole.
So, through this current decade, there will be a veritable avalanche of baby boomers heading into retirement, although the current global financial
turmoil may keep some toiling longer to compensate for pension income foregone as stock markets have collapsed. In the USA, for example, the percentage increase in the labour force accounted for by those over 65 years is projected to be 80+% over the period 2006 to 2016, whereas the 25-54 year old group’s increase is expected to be a paltry 2%. I was talking to a senior officer from McDonald’s Japan the other day and he advised me to “come to Tokyo and see at first-hand what European consumer markets will look like in 10 years’ time. Japan is about 10 years ahead demographically of other developed countries. The current Japanese population of 128 million is expected to fall sharply over the next 40 years and reach around 100 million by 2050. By then, those over 60 will comprise 40% of the total population. Frankly, it is no surprise that grocery retailing is tough trucking in Japan – Wal*Mart’s Seiyu hasn’t made a dime of profit in the last 8 years; Tesco has just pulled the plug. Each year, there are fewer and fewer shoppers – think Germany, Italy, Spain, Russia, they’re on the same track. Another dose of statistics; by 2020, the median age in India will be 28, but 37 in China (more later), 38 in the USA, 45 in Western Europe and 50 in Japan. So what does all this mean to the food and drink industry? What’s so different about us oldies? I’m one, by the by (64 last birthday). First of all,
oldies aren’t homogenous. Segments include:
Are oldies obsessed with health and well-being – in a vain attempt to fix the ravages of time, poor diet and • Over 60s who have retired and are insufficient exercise? Food and drink active, healthy and their income is products that are linked with/can be solely from their pension – financially, consumed after light exercise some are comfortable and some provides a genuine market opportunstruggle; ity – US data shows that exercise • Over 75s who are socially active, gently walking, golf, aerobic exercising, crumbling but are determined to working out in clubs and at home are remain in their own home (something growing much faster than heavy duty governments want them to do, too); exercising, such as contact team • An increasing number who work sports. Again, it’s the under-30’s and part-time, some for pay and others as over-60’s that are leading the charge unpaid carers for ageing parents; and not the flabby middle years folk. • And some continue in full-time work, although if they have a partner, s/he What happens when you reach 60 is may be more home-based. that you eat less – smaller portions – and particularly meat. In most From a food manufacturer’s perspecdeveloped countries with relatively tive, keep in mind the household high per capita meat consumption, structure for oldies – 2 people the red meat industry will come together, then, down to one (usually, under pressure – it’s happening right a woman). Package size is key, here – now. Market volumes may grow but meals for 2 or solo meals. The chilled but only because of increased ready meal offer in the UK provides population. In contrast, per capita a great example covering households spend on fish increases with age. I of 1 or 2 at both ends of the age scale: expect to see older, poorer consumers under-30’s picking up a ready-to-eat in Europe increasing expenditure on “Takeaway”, or one to heat up from a “industrially-produced” white meats convenience store; and over-60’s such as chicken, farmed fish and pork, maybe opting for something more at the expense of premium-priced “English” or lighter Mediterranean beef, lamb and wild-caught fish. from their nearby supermarket. However, not all is doom and gloom. The oldies who are comfortable The huge growth in those over-75 financially, will eat less meat but living independently, the expansion when they do so they will be prepareof convenience retailing located close d to pay for quality(e.g. dry-aged, to residences, and the growth of long matured beef rather than home delivery of groceries presents regular, sustainably-sourced, “wild huge opportunities for the ready catch” ocean turbot). meals sector. Once my dad died, mum who was a formidable chef lost Management consulting firm interest in cooking and chilled ready ATKearney characterise “mature” meals served her well – initially, consumers – as they delicately put it bought by mum when she could walk – as likely: to the nearby shop and, later, delivered to her home as she became • to shop more often (mind you that’s a less mobile. trend across the market in the UK); • and proximity of shop to home is a key I’m arthritic and have been for 35 reason for choice; years. I have a particular axe to grind on • spend proportionately more on food the ease of opening of packaging. • seek quality and are willing to pay for It’s not just older folk who want it, are brand loyal not least to heritage consumer-friendlier packaging. Have brands. you noticed in supermarkets the • many are “techno-savvy” and embrace confusion caused by varying eye sight on-line purchasing and its associated ability of shoppers – under-30’s who home delivery. can read a label from 20 metres scowl at over-40’s who are coming to terms So, what does this mean for the internatwith the need for reading glasses and onal food industry? Well, much of the have to stand mid-aisle to read shelf optimism that revolves around the future stickers, but they can’t get a clear of global demand for food relies on the view for over-60’s peering nose combination of increasing population length at the product to work out if and increasing real incomes particularly it’s caffeinated or decaffeinated, or in the emerging countries of the world, even if it’s tea or coffee! and assuming that global diets will
“westernise”, i.e. focussing on more protein rich foods such as meat and dairy. OK – I get it! But let’s remember that households in these emerging countries spend a high proportion of their income on food. A combination of escalating and volatile staple food prices (rice, wheat, corn), and sharply rising non-food expenses (such as housing, transport, education, health care, old parents) and these will serve to constrain demand for the higher-priced food products that we consider to have such a rosy future. What this tells me is that the global grocery retail market will become increasingly competitive. So what margin protection do you have to survive and prosper in these cut throat markets? It was ever thus! Market power is polarising – at one end are the life science companies who own the intellectual property associated with product attributes that deliver benefits that consumers value and will pay more for; at the other end are powerful retailers and food service operators who consumers trust for their every day shopping needs; and, in the middle, everyone else gets the bejeesus squeezed out of them unless they have some unique element product/service that others value and will pay a premium for. Big FMCG players have great brands. At the more local level, smaller companies may have strong relationships with individual customers and their products are wrapped in great stories. So do you have a life belt? More positively, do you have the right motor to drive your business forward in a commercial environment that will be increasingly competitive? Exciting times or what!
Professor David Hughes Professor of Food Marketing email@example.com +44 (0) 7798558276 http://www.profdavidhughes.com/
RETAIL SUPPLY CHAINS
A FRESH APPROACH TO QUALITY CONTROL
Jonathan Evans was recently invited to write an article for European Supply Chain Management magazine about the importance of quality management systems within retail supply chains. Here are the key extracts.
Fresh Produce remains the key driver of footfall to supermarkets, but with consumer loyalty at an all-time low, any incident relating to food quality or safety could be enough to send your consumers knocking on your competitors’ door. For many businesses, securing and growing market share around their fresh offer is core to strategy, and maintaining and improving consistency on that quality offer is pivotal to that success. Interestingly, a recent study commissioned by IGD confirms that despite the global economic crisis, consumers have not neglected their values in favour of lower priced products. Whilst 58% of consumers agree that saving money is the most important thing to consider when food shopping, 54% are willing to pay more money for high quality produce. Professor David Hughes, Emeritus Professor of Food Marketing, once said; “The enormous challenge is to add much more customer value than cost in an increasingly competitive, global food industry environment…of course price is vitally important; but, if customers want to pay more, don’t disappoint them!”. Quality has historically been the domain of a technical department and often works as
an island within the rest of the business. Quality on fresh is now being propelled to the heart of most businesses and that performance is core to the commercial strategy. Having better visibility on that qualitative performance for all stakeholders is the challenge and alignment between departments on the quality criteria that underpins the offer is fundamental. Subsequently, businesses within the supply chain need to clearly communicate the quality criteria with their suppliers, and couple this with constant measurement on performance and the sharing of results; these are all key elements that can drive significant improvement. Technology and its implementation, not just within a single business unit, but across a supply chain, will play a significant role in improving transparency and enabling better collaboration; giving businesses deeper insight into the factors that affect performance within their supply base. Greenlight Quality Control (QC) is one of a new generation of software solutions that will transform the way in which supply chain partners will collaborate more effectively. The basic principle
is that a company’s product specification on the quality characteristic is held in a single location on the web and is accessible to authorised users that are able to edit and view the quality parameters within the quality attribute specification (QAS). This may be an internal company user or, in many cases, organisations can request their suppliers to do it. Once completed, the QAS alerts the user responsible for approved sign-off and, subject to this stage gate, the QAS is set to ‘Live’ and any mobile / tablet device that is authorised to this service is instantly updated with the corresponding product assessment. Subsequently, in-depot / factory checks are always being completed against the latest QAS; one of the benefits of cloud computing. With Inspection Teams using a consistent method and the same check type for measurement, accurate product category and supplier performance data is generated, which provides the foundation on which to identify issues and drive improvements in product quality. With this ‘real time’ approach, suppliers receive instant notification of rejections and feedback on good and bad performance in a consistent format.
Sharing the data with suppliers is crucial in driving positive engagement and behavioral change and this consistency ensures all stakeholders keep focused on the quality agenda. Ultimately, with everyone aligned on the exact criteria of quality, ‘a right first time’ approach starts to emerge; driving cost savings through reduced failure. In the same way that any connected device can see the QAS service at internal depot / factory, suppliers can also participate and connect to the same service. This is a concept we refer to as Active Quality Chain, where the methodology, process and measurement practices are all consistent throughout a supply chain and are aligned through a common technology platform. Where there is not only transparency on what is expected, but greater visibility on what’s coming through. From the ground up, the product is being assessed and reassessed to ensure it is meeting the specification at each stage gate. Driving this process deep into a supply chain means decisions on product quality can be made at earlier stages before significant added costs, especially around logistics or rework, are incurred. This Active Quality Chain process is currently being adopted by the most forward-thinking grocery retailers and suppliers. These businesses understand that in order to ensure consistency in their quality offer at the lowest cost, a more collaborative approach with suppliers is required. Where visibility on performance is shared and a deeper trusting relationship, which focuses on continuous improvement and security of supply, can be developed. What becomes exciting is the quality of data that is generated. Whilst it has significant operational value in day-to-day decision
making, the opportunity is that the historical data can be used to predict or trend possible eventualities or outcomes. Subsequently, teams and resources can be utilised in a more pro-active capacity, rather than a reactive capacity.
Greencell Ltd Jonathan Berry, Head of Technical
Greencell, an experienced supplier of fresh fruit and vegetables to the UK market, identified a requirement to implement a more efficient quality control process within the business. Subsequently, they implemented Greenlight Quality Control, a mobile electronic quality assurance solution from Muddy Boots, to capture data on the go and improve the visibility of quality assurance data. “Delivering taste and good quality produce is key to what we do. In order to maintain our relationship with our customers it is fundamental that we supply fruit and vegetables of consistently high quality, which meet and exceed their exact specifications, every time. “Traditionally, the main challenge for us was around accessibility of data. We had difficulties in retaining and accessing historic data and there was a strong reliance on our internal IT department to manually produce reports for us. As a result, it was virtually impossible to have an accurate up-to-the-minute overview of our quality performance and so identifying trends or putting improvement plans in place was a real challenge.
Ultimately, this integrated approach to technology and the management of quality will support improved quality performance and will also deliver deeper collaborative relationships with suppliers. But don’t just take our word for it!
“We were working in a ‘reactive’ rather than ‘proactive’ manner, and it became clear that we needed a robust system that could improve access to quality control data. The objective was to use this data meaningfully to drive process improvements that reduce customer complaints and rejections and help to improve and develop the quality of the raw material received from our own growing operations. This can only be possible through targeted actions based on the information and trends mined from Greenlight Quality Control. “Muddy Boots was able to integrate with our existing technology system which means that we now have one single accurate source of product quality data. For us, this will significantly speed up data gathering and will result in time saving efficiencies through avoiding duplication of data entry. “The Greenlight technology standardises reports from intake to dispatch, which improves visibility on the quality of the product and drives efficiencies throughout all sectors of the business, including Commercial, Quality Assurance and Technical departments. In addition to this, the flexibility of reporting on grower, supplier and product performance at different times of the season will allow us to identify trends and issues within our supply base; giving us a complete overview of our product quality offer and ensuring it is aligned with those requirements of our customers.”
3663 FIRST FOR FOODSERVICE
REDUCING INTAKE REJECTION RATE BY 50% 3663 selected Muddy Boots to implement Greenlight Quality Control at its two Swithenbank fresh and fine food centres, to improve supplier performance, reduce waste and cut costs. One year on and the company has more than halved its intake rejection rate at these centres.
Swithenbank fresh and fine foods, part of 3663, a leading foodservice company in the UK, identified a requirement within the business to automate the work of the Product Quality Inspection (PQI) team and improve supplier management processes and relationships. The objective was to electronically record the receipt of goods arriving into its Swithenbank centres and, through detailed specifications, grade the quality of a product through the use of a traffic light system. Subsequently, in 2011, the company selected Greenlight Quality Control from Muddy Boots Software to embrace mobile working and capture data on the go. The initiative has been pivotal in improving productivity and workflow across the company’s supply chain and delivering produce of a consistently high standard. As a result, Swithenbank has more than halved the intake rejection rate on its fresh produce lines that are quality checked using Greenlight Quality Control. When issues do arise, an automatic alert is sent to the supplier, allowing them to arrange collection or replace their stock at the point of rejection. Not only does this process save time and money for the supplier, but it also dramatically improves supplier / PQI relationships through the use of a standardised quality control process.
Hilary Owen, QA Executive from 3663; “Product quality is vital for our customers and a major focus within our business. The Greenlight Quality Control software was implemented to manage the quality and consistency of our fresh produce, reduce waste and establish a unified understanding of our QC standards amongst all of our suppliers. “Members of staff are now able to use a robust handheld device, which is compatible with tough warehouse conditions, to automatically capture data, without the need to duplicate information. This has dramatically reduced the time we spend on reporting and has significantly improved the availability of information for the business.” Adrian Talbot, Senior Account Manager at Muddy Boots Software; “We are delighted to be working alongside 3663 to implement a quality control solution across their Swithenbank fresh and fine food centres. It’s really exciting to see the value the data is delivering the business from operational day-today decision making, to management data that trends qualitative performance over time and supports decision making that impacts the future direction of their business”.
RAISING INDUSTRY STANDARDS ACROSS THE STORAGE, HANDLING & SAFE USE OF PESTICIDES BASIS (Registration) Limited, an independent organisation that assesses standards in the pesticide industry relating to storage, transport and competence of staff, has witnessed significant time and productivity gains and has identified a steady improvement in the audit performance of the ag-chem supply and distribution industry since implementing Quickfire from Muddy Boots. BASIS standards and certification are recognised under the Control of Pesticides Regulations 1986 and are required, by law, by all those involved in the storage, sale and supply of pesticides. An annual inspection of UK-based pesticide stores is completed by a BASIS Assessor and the information generated is collated and shared with the Environmental Agencies, Fire Authorities and the Chemicals Regulation Directorate (CRD). Subsequently, following a comprehensive pilot period, Muddy Boots was selected to ensure the consistency, accuracy and reliability of the audit process across the industry’s 600 registered stores. The software enables data to be gathered through a mobile device that prompts and disciplines the audit process. Once collected, the data does not need to be re-entered, so Assessment completion is quicker and the resulting information and actions are available immediately; significantly increasing productivity for the business. Rob Simpson, Managing Director at BASIS (Registration) Limited, says that traditionally the audit was a manual and time consuming process for the Assessor, the pesticide store and BASIS; “Completing the audit by paper meant there was duplication of data input and despite our Assessors being trained and extremely competent, it was difficult to guarantee that the process was as stringent and consistent as possible. Since implementing Muddy Boots we have reduced the time the Assessor spends on site by around 20 –
25%, sometimes more, and the entire process is now more prescriptive and therefore more consistent across our business. “The greatest impact has been the reporting functionality within Muddy Boots and the speed at which the reports come back to us. Previously, there had always been a delay in getting our hands on the data and then further delay in alerting the distributor of our findings. With Quickfire, the Assessor is able to synchronise the audit back to us and any major issues can be identified in real-time. Similarly, we can alert the distributor immediately; enabling them to react quickly to any non-conformances.
“The software has been really well received by all stakeholders and is helping to raise industry standards across the storage, handling and safe use of pesticides. The improved efficiency that we are witnessing allows us to spend more time working with distributors to help them become compliant. Some of the larger Distributors that have more than one pesticide store are even utilising the data themselves, to measure trends in performance across their sites and identify which sites are performing well and which sites are under performing and therefore need further assistance.
“We will continue to invest in the software over the next 12 months; introducing some of the new system enhancements and moving onto tablet PC format,” concludes Mr Simpson.
“When BASIS first approached us they wanted to increase productivity, ensure consistency in the audit process and improve the speed at which reports are generated and distributed. Over the last 3 years BASIS has fully embraced the software and has subsequently met all of these objectives.” Jeff Goulding, Muddy Boots Software
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