Posted in Operations & IT Articles, Total Reads: 3408
, Published on 27 June 2011
One of the toughest challenges organisations face is to make sure that their products reach their target audience. Distribution channels, transportation, storage, packaging, warehousing etc all form a formidable sequence in the operations of an organisation. Companies which effectively manage their resources and are efficient in their distribution, stand a better chance of becoming successful, especially those dealing with food products. This is where a unique concept 'Food Miles' in the field of distribution of food products helps in understanding the processes better.
Food Miles is a concept which means how far food has travelled before you buy it. Environmentalists are pushing for labels on food items to show how far it has travelled from the source to the market and contemplate the damage caused by shipping, flying or trucking food from different parts of the globe.
Contrasting explanations are given for eating local produce vs food from distant areas. Eating local food ensures not only freshness, taste, purity, boost to local producers and market, but also inventory management cost, reduces fuel, transportation cost, warehousing costs etc, thereby saving a lot of financial as well as energy resources. It also contributes in protecting the environment and decreasing greenhouse emissions. The 'More' food miles therefore automatically means 'greater' fuel consumption and higher financial resources used.
On the contrary, does reduction in food miles actually benefit the organisation in any way? For such calculations, factors like logistics, means of transport, type of fuel used, warehousing and storage procedures, disposal of packaging and several other distribution channel elements are considered. Incorporating these measurements, organisations have been able to reach to a surprising conclusion that it is more feasible and efficient for people living in metros like New York or London to buy imported meat, dairy products etc from the other side of the world than buying local produce. But because of these conclusions, organisations worldwide are rethinking about the concept of food miles. Studies across the world now consider costs 'across the lifecycle of the produce' and not just the transportation costs. Localization is not the most entirely sound solution if more stages are present in the product life cycle during its journey from the source to the market. Also, local products cannot possibly give the consumers a huge variety, in terms of quality and cost, to choose from. Apart from people also prefer having products beyond what the seasons offer them and hence to overcome seasonal variations warehousing and storage is critical.
There it’s important to work or strengthen comparative geographical features for organizational advantages rather than using food miles as a sole means for evaluation. Transportation services should be streamlined according to fuel efficient standards and storage facilities should be effective. Developmental incentives should be created for regional food production which can provide sustainable produce for the less sustainable parts of the world and for that nation in particular. Once the local production is stabilized and strengthened, it would become a hub and from there the products can be transported across the length and breadth of the country or world.
Organisations have to figure out effective and efficient ways to cutting costs, protecting the environment and deliver quality goods to the consumers in time. The ever growing competition will only make the hurdles more challenging but concepts like food miles can definitely help in understanding and evaluating problems and in finding the appropriate solutions.
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