USING THIS WORKBOOK
MODULE 1: WHY FORM SUPPLY CHAINS?
How attractive is your present situation?
Who is in your present chain?
MODULE 2: FORMING SUPPLY CHAINS THAT WORK
Readiness to partner
Partner selection
MODULE 3: MANAGING SUPPLY CHAINS
Questions addressing the six key principles of supply chain management
Principle 1: Focusing on Customers and Consumers
Principle 2: Creating and Sharing Value
Principle 3: Getting the Product Right
Principle 4: Ensuring Effective Logistics and Distribution
Principle 5: Having an Information and Communication Strategy
Principle 6: Building Effective Relationships
How well did you score?
Where to from here?

Copies of this workbook can be printed by following the prompts from the main menu of the CD. If you print the workbook, use it once, then want to use it again later, or if you want to give it to a friend or another member of your supply chain, you can always print off extra copies. Alternatively, you can save it as a word file and fill it out electronically.
The purpose of the workbook is to allow you to use the experiences of others to learn more about supply chain management in your own agribusiness. It will challenge you to:
 examine your own business and ask o Why form supply chains in the first place? o How do I know when I’m ready to become and supply chain partner, and o How do the six principles of supply chain management relate to my business?
 create a record of your thoughts and findings as you examine your own business; and
 establish a point of reference against which you can judge future improvements in the management of your own supply chain.
You will find the CD interesting in itself, but its real value lies in stimulating you to think about supply chain management issues in your own business. For this reason, the workbook’s main purpose is to provide you with a place to record your own thoughts and conclusions in response to carefully structured questions that are drawn from the experiences of the speakers on the CD. It is certainly useful to think about these questions, but it is far more useful to write your responses down as a record of your thinking.
Please don’t skip this essential task.
Why not share the CD and workbook with other members of your supply chain? You could even compare answers among chain members as a way of building strategies to improve your chain’s performance.

Question 1
Michael Porter uses his ‘five forces’ model to determine the attractiveness of a particular industry in terms of its competitive environment.
Complete the Porter model below by indicating what changes have occurred in each of the five components that make up the competitive environment in which your business operates.
Market power of suppliers
(Am I at their mercy?)
Ease of entry for competitors
(Can I protect my patch?)
-----------------------------------------
-----------------------------------------
----------------------------------------
Competition between existing firms
(Can I protect my share?)
--------------------------------
--------------------------------
Market power of buyers
(Am I at their mercy?)
-----------------------------------------
-----------------------------------------
----------------------------------------
--------------------------------
--------------------------------
--------------------------------
-----------------------------------------
-----------------------------------------
----------------------------------------
--------------------------------
-------------------------------
Availability of substitutes
(For my product/service?)
-----------------------------------------
-----------------------------------------
----------------------------------------
As a result - how attractive is your industry?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Question 2 Complete the map of your supply chain for your main product line – keep it simple by only identifying the MAIN members of your chain.
First locate where your firm is in the supply chain.
Input Suppliers Growers/Producers Processors Distributors Retailers Consumers
List the Key
Firms
List the Key
Firms
List the Key
Firms
List the Key
Firms
List the Key
Firms
List the Key
Firms

NOTES:

Question 3 Think about your present supply chain
What are two things your supply chain is doing well?
1.________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________
_________________________________________________________________
What are two things you would like to improve if possible?
1.________________________________________________________________
_________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________
_________________________________________________________________
NOTES:

Question 1 Your capacity to create value is at the very heart of supply chain management.
Complete the following table to demonstrate where you create value for your customers.
My firm creates customer value in these ways:
These are the reasons why my firm can create this customer value
Question 2 Your firm’s readiness to partner depends upon it having the
‘right’ culture and processes
Complete the Readiness to Partner Profile on the following page by drawing a circle around the appropriate number on the scale provided.
The items in the profile are characteristics drawn from examples of firms that have been able to partner successfully. By completing the profile you will highlight your firm’s strengths and weaknesses as a potential partner.

1.
Culture
As a management team
We promote cooperation
We have pride in our reliability
We value our integrity
LOW
1
1
1
We are proactive
We are flexible
We communicate
We encourage initiative
We tolerate mistakes
We recognize and reward performance
1
1
1
1
1
1
2.
Process
Our firm
Has clearly articulated our vision and goals 1
1 Has analysed our competitors
Understands our key suppliers and customers 1
1 Has an effective communication system
with our key suppliers and customers
Has an effective internal communication 1
system
Has an effective quality management system 1
Understands our cost drivers
Understands our revenue generators
1
1
Has the ability to create value for our
customers
1
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
HIGH
3 4 5
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5

Question 3 Unless firms are compatible with respect to their cultures, vision
and processes they will find it difficult to work together.
Complete the following Partner Selection Checklist. It will give you an indication of the areas of similarity and difference of your firm and your potential partners. This should be done for both key suppliers and customers.
1.Cultural Compatibility, with respect to:
Ability to cooperate
LOW
1 2
Business Ethics
Transparency
Flexibility
Innovation
1
1
1
2
2
2
2
Reliability
Fairness
Recognition of contribution
1
1
1
2. Strategic Compatibility, with respect to:
Shared vision and goals
1
1
1 Ability to create value
Ability to create competitive advantage 1
Ability to define mutual expectations 1
Ability to establish clear lines of responsibility 1
3. Process Compatibility, with respect to:
Ability to share accurate information 1
in a timely and efficient manner
Ability to establish effective monitoring and 1
control systems
Ability to establish an equitable rewards 1
system
Our ability to establish an effective dispute 1
resolution system
2
2
2
2
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
HIGH
4 5
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5

1.Cultural Compatibility, with respect to:
Ability to cooperate
LOW
1 2
Business Ethics
Transparency
Flexibility
Innovation
1
1
1
2
2
2
2
Reliability
Fairness
Recognition of contribution
1
1
1
2. Strategic Compatibility, with respect to:
Shared vision and goals
1
1
1 Ability to create value
Ability to create competitive advantage 1
Ability to define mutual expectations 1
Ability to establish clear lines of responsibility 1
3. Process Compatibility, with respect to:
Ability to share accurate information 1
in a timely and efficient manner
Ability to establish effective monitoring and 1
control systems
Ability to establish an equitable rewards 1
system
Our ability to establish an effective dispute 1
resolution system
2
2
2
2
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
HIGH
4 5
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5

Question 4 Successful partnerships are built on trust and commitment.
Think about your relationships with other members of your existing supply chain and complete the following table:
Partner Relationship Characteristics My existing partners
Transactional  No trust
 Opportunistic
 Short term
 Poor information flow
 Price is important
Preferred
Supplier/Customer
 Work well together
 We do our own thing
 We know what each other wants
 We have worked together for some time
 Reliability is important
Partnerships  We work well together
 We communicate well
 We plan jointly
 We invest jointly
 We have worked together for some time
 Value creation is important
Which relationships should your firm invest in?
Potential Partners Reasons

QUESTION 1a How well do you know your chain partners?
When you completed the map of your supply chain in module 1, how well were you able to identify
1) your input suppliers
2) your customers (the firms you deal with directly) and
3) the final consumers of your product?
Chain Partner Know very well
Could know better
Don’t know well
My input suppliers
My customers
My consumers
Write down one way that you could improve any of these that you rated as
“could know better” or “don’t know well”, OR briefly explain why it is not necessary to know them.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

Peter Chapman, Bell River brand meat , said that you need to
 Understand how your product is perceived by others in the chain
 Ensure continual research and probing of markets
QUESTION 1b How is your product perceived?
Write down two different ways that your product and its brand could be perceived by consumers (tip: ask yourself – does my branded product mean the same thing to every consumer?)
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
Ken Gaudion, Wandin Valley Farms, stated that
 Knowledge of consumers underpins supply chain strategy
QUESTION 1c Who creates value in your chain?
For each stage in your supply chain map in module 1, identify one major chain partner at that stage and write down what that firm does to create value.
Stage Name of chain partner
How that partner creates value

QUESTION 1d Which segment do you aim for?
Do you produce a product that is highly processed at some stage further down the chain? If so, answer Question A below.
Do you produce a product that is consumed in more or less the same state as it is in when it leaves your business? If so, answer Question B below.
QUESTION A
Think about your customers. Has any research been done to identify what they need from you?
If yes, has it been effective to you in terms of helping you meet those needs?
How?
_________________________________________________________________
_________________________________________________________________
If no, is there some research that you can see needs to be done? How could this be achieved?
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
QUESTION B
Think about the consumers of your product. Can you identify what segment(s) of the market best describes them, for example, by age, gender, occupation or where they live. Give one example of a segment at which your product is targeted.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Has any market research been done to identify this segment?

If yes, has it been effective, and where is the evidence to support your answer?
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
If no, do you need to do some market research, and what evidence would you consider as proof of its effectiveness?
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Can you identify one barrier that your supply chain has purposely built to make it difficult for competitors to copy what you do? If not, how could you do this?
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Kim Martin, Vegco , spoke about
 Capturing customer priorities
 Understanding how to deliver to customer priorities
 Confirming market needs through market research
 Understanding market trends such as changing demographics
QUESTION 1e Do you understand your suppliers and customers?
Look at the major suppliers and customers with whom you deal regularly (they should be named on your supply chain map from module 1). How well do you understand their needs, and is there something you should do to improve your knowledge about one or more of them?

Suppliers Name I understand their needs
Very Well Quite Well Just OK Not Well
I could do the following to improve my knowledge of suppliers
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Customers Name I understand their needs
Very Well Quite Well Just OK Not Well
I need to do the following to improve my knowledge of customers
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

QUESTION 2a How is value shared in your supply chain?
Consider the value created by the sale of your product to a consumer. Starting with the value of a typical ‘consumer sized’ transaction for your product, can you identify how much of it is shared by each chain member back down the chain?
The consumer pays $ ___ (100%)
Retailer’s share $____ (___%) Wholesaler’s share $____ (___%)
Processor’s share $___ (___%) Producer’s share $____ (___%)
Add any other partners, and their share, not included above
_________________________________________________________________
_________________________________________________________________
If you cannot do this calculation because you do not know the amounts involved, consider to what extent this represents a deficiency in your supply chain knowledge, ie. how could you benefit from a better knowledge of the way that value is created and shared in your supply chain? Write your answer below.
________________________________________________________
________________________________________________________
________________________________________________________
Michael Silm, Panda Ranch Trading, mentioned that
 The purpose of a supply chain is to deliver the value of you product
 Everyone in the chain has to make a profit
Tony Lutfi, Green Wheat Freekeh, said
 Value must be shared up and downstream
 Give your customers a competitive advantage
Mark Chapman, Wandin Valley Farms, stressed the point that
 When producers work together they can create more value than when working alone

QUESTION 2b Putting profits in perspective
Looking at the shares of retail value calculated in question 2.1 above (if you were able to complete this question), make a judgement as to whether each key member in your supply chain makes a profit that reflects the value they add to the chain.
Members Name
Comment on their share of profit vs the value that they add

Ramy Azer, Papyrus Australia, emphasised that you should
 Understand what your product is
 Understand how your product is transformed as it passes along the chain
QUESTION 3a How is your product transformed?
Do you have a clear idea of how your product is ‘transformed’ by other supply chain members who make their contribution to it as it passes along the supply chain?
1. Yes, I have a very clear picture ____
2. I’m not exactly sure, but I have a reasonable picture ____
3. No, I’m not sure at all ____
If you answered 2. or 3. above, what can you do to get a clearer understanding of how your product is transformed?
________________________________________________________
________________________________________________________
________________________________________________________
Glen Graham, Field Fresh, said it was important to
 Understand the precise market specification of your product
Mark Chapman, Wandin Valley Farms, said you should
 Know the customer’s specifications to ensure that you get the product right

QUESTION 3b Is your product right for your customer?
Imagine for a moment that you are the customer for your product. How well could you write a specification for your product from the customer’s point of view?
1. Very well ____
2. OK with a bit of guesswork ____
3. Not well at all ____
If you answered 2. or 3. above, consider how well you understand the needs of your customer, and therefore how ‘right’ your product is in terms of meeting these needs. List two actions you can take to improve your knowledge so that your product is as ‘right’ as it can be from the customer’s point of view?
1.________________________________________________________________
_________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________
_________________________________________________________________
QUESTION 3c How right are your internal processes
How well do your production processes meet the needs of your customer(s)?
1.
Meet the complete specifications 99% of the time _____
2.
Meet most specifications better than 75% of the time _____
3.
Meet most specifications about half the time _____
4.
Meet some of the specifications, but less than half the time _____
If you answered 2, 3 or 4 above, what are the two major improvements you could make to getting the product right for your customer?
1._____________________________________________________________
_______________________________________________________________
2._____________________________________________________________
_______________________________________________________________

Kim Martin, Vegco, made these points
 Understand your chain’s particular needs
 Speed-to-market ensures customer satisfaction
 All chain members must understand the importance of logistics
QUESTION 4a Critical logistical issues upstream and downstream
List two critical logistical issues between you and one of your most important downstream supply chain partners (downstream partners are between you and consumers).
1.________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________
List two critical logistical issues between you and one of your most important upstream supply chain partners.
1.________________________________________________________________
_________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________
_________________________________________________________________

QUESTION 4b Speed to market is a logistical challenge
Because many agribusiness products are perishable, speed to market is the main logistical issue, usually involving cool chain management. If your product fits into this category, nominate one logistical strategy your business has adopted to ensure speed to market.
_________________________________________________________________
_________________________________________________________________
If your product is not perishable, there may still be logistical benefits to be gained by improving its speed to market, such as saving on storage costs. Can you name any other logistical benefit from improving your product’s speed to market?
_________________________________________________________________
_________________________________________________________________
Graeme Sebire, Wandin Valley Farms, stressed that you should
 Ensure that your customers understand the characteristics of your product flow
QUESTION 4c Are you managing a lumpy product flow
Most agribusinesses don’t produce a steady stream of products. Instead, factors such as the weather, seasonal demand patterns, or biological cycles result in peaks and troughs in production. Logistics must be able to respond to these peaks and troughs efficiently.
In your business, how lumpy is the flow of product over a typical year?
Pretty smooth – much the same output week to week ____
Moderate differences from month to month ____
Major peaks and troughs throughout the year ____
Are there logistical issues created by the pattern of flow of your product? If yes, list one thing you could do to address these issues.
_________________________________________________________________
_________________________________________________________________

Jane Casey, Australian Chestnut Company, said it was important to
 Create a feeling of connectedness among chain members
 Take a personal approach to communication
 Ensure your customers have the information they need
QUESTION 5a Creating connectedness
In your supply chain, think about what you do to create a feeling of connectedness among your important chain partners? List three things you do.
1________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________
3.________________________________________________________________
_________________________________________________________________
Is there a point in your supply chain at which you could do more to make a key supply chain member feel more connected? What is that point, and list two things you could do to improve the situation.
1.________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________

Daniel Ding, Wandin Valley Farms, said that
 Information must pass between the producer and the marketer – in both directions
QUESTION 5b Two-way flows of information
What part of your supply chain do you feel you get least information about, but would like to know more about?
_________________________________________________________________
_________________________________________________________________
Why do you get insufficient information about this part of your supply chain?
_________________________________________________________________
_________________________________________________________________
What would be two benefits to you from improving this situation?
1.________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________

Colin Chenery, Miessence, said it was important to
 Work with your suppliers to create trust
 Understand your chain members’ needs
 Educate your chain about your product
QUESTION 6a Trust
3.
1.
2.
Trust may be a difficult thing to measure, but managers do know when it exists.
In your own supply chain, list three relationships you are in where you consider a level of trust has been created, and record the basis of this trust, ie. what is it built on ( Tip: the things upon which trust is built are the things you should work hardest to protect and sustain).
Relationship Basis of the trust in that relationship

Which of these relationships are upstream or downstream of your business?
Upstream
_____________________________________________________________
Downstream
_____________________________________________________________
Think about whether you have the same strength and kind of relationship with your input suppliers (upstream) as with your customers (downstream)? Can you explain any differences? (Tip: some people in business think it’s OK to be tough on their input suppliers, but expect to have trusting relationships with their customers)
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
Michael Silm, Panda Ranch Trading, stressed that
 Good friendships can solve difficult problems
 Relationships should be long term not seasonal
 Relationships are the glue that holds the chain together
QUESTION 6b Relationships can become friendships
You will already have thought about the relationships in your own supply chain in answering the question above. Is it possible to identify one relationship that has reached the stage of friendship, rather than being just a business relationship?
_________________________________________________________________
_________________________________________________________________
If so, can you identify what factors:
(a) caused it to develop to this extent:
_________________________________________________________________
_________________________________________________________________

(b) are evidence that it is more than a business relationship
_________________________________________________________________
_________________________________________________________________
If there are no such relationships in your own supply chain, can you see a particular relationship that you would like to strengthen to this extent? What action could you take to make this happen?
The relationship I would like to see develop further is with
_________________________________________________________________
To make this happen, I could
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Tom Dawson, Australian Hiramasa, emphasised that
 Your relationships should be with people who see benefits in your product
 Relationships begin by understanding your customers’ needs
 You should understand which relationships give you the greatest leverage
Daniel Ding, Wandin Valley Farms, stressed that
 Building a strong relationship creates a sense of ownership between chain partners

QUESTION 6c Relationships give leverage and create shared ownership
Thinking back to your answers to the two questions above, identify the relationship in your supply chain that is of greatest significance to you ( Tip: perhaps it’s the one that would cause you the most grief if it reverted to pricebased opportunistic behaviour).
Is this the relationship that you work hardest to maintain? If not, why not?
_________________________________________________________________
_________________________________________________________________
How well do the two of you understand each other’s businesses? If you could know more about each other, list two actions you could take to improve the situation.
1.________________________________________________________________
_________________________________________________________________
_________________________________________________________________
2.________________________________________________________________
_________________________________________________________________
_________________________________________________________________
If you managed that person’s business for a month, identify the one thing you would do to improve the way it deals with your business.
The one thing I would do is
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

Using the tables below will give you an overview of how you and your business have fared in addressing the six key principles in your own supply chain. More importantly, this will highlight areas to which you may have to give immediate attention to improve supply chain performance.
3c
4a
4b
4c
5a
5b
2a
2b
3a
3b
1a
1b
1c
1d
1e
6a
6b
6c
Go back to your answers. Consider each answer in terms of where you could position your response to that question on the scale below. Mark that point for each question.
Question number
Doing extremely well
Needs a little attention, not urgent
May need attention in the future
Needs urgent attention
Needs attention in the short term

Based on your evaluations above, now give yourself a combined rating for each of the six key principles.
Key Principle Doing extremely well
Needs a little attention, not urgent
May need attention in the future
Needs attention in the short term
Needs urgent attention
1
Customers &
Consumers
2
Creating &
Sharing Value
3
Getting the
Product Right
4
Logistics &
Distribution
5
Information &
Communication
6
Effective
Relationships
You can go back to your individual answers in the workbook, back to the speakers on the CD, or to the whole case studies on the CD to provide more food for thought as to what strategies would work best for your business and your supply chain in addressing the issues identified above.
You may also wish to discuss these results with your business associates, other members of your supply chain, or business advisor. Further useful contacts are listed in the contacts section at the back of this workbook and on the CD.

Agriculture, Fisheries Forestry – Australia
(AFFA) is a Commonwealth Department. Its mission is to increase profitability, competitiveness and sustainability of
Australian food and agribusiness industries.
AFFA is responsible for different activities, including the NIDP, which assists Australia’s food supply chain, from producer to consumer to become more globally competitive by helping industries form strategic alliances and adopt supply chain management strategies.
For more information visit our website: www.affa.gov.au
or phone (02) 6272 3933
The University of Queensland is one of
Australia’s leading universities. The majority of its teaching and research activities in agribusiness and agricultural technologies are located on the Gatton campus. The main focus of agribusiness research at UQ is in the areas of supply chain management, new industry development and e-agribusiness.
For more information visit our website: www.nrsm.uq.edu.au
or phone (07) 5460 1321
For additional copies of the CD please email scmlearningcd@affa.gov.au
or phone 1300 884 588
The New
Industries
Development Program provides support for innovative agribusiness to commercialise new products, services and technologies.
NIDP provides:
 Pilot commercialisation projects grants;
 In-Market Experience Scholarships;
 Access to online, print and human resources to enable through chain learning and development of stronger agribusinesses.
For more information visit our website: www.affa.gov.au/agribiz or phone 1300 884 588
The National Food Industry Strategy is helping food businesses in Australia to grow in the global market. It’s industry driven and backed by the Australian Government.
Through grants and other initiatives it is building innovation and value chain management capabilities to improve industry’s competitiveness.
The Food Strategy is delivered for industry by NFIS Ltd. For more information visit our website: www.nfis.com.au
or phone (02) 6270 8800