Submitted by Sunday Fasina Title: Cold Chain Management A comparison of Asparagus and Mangoes Logistics

Abstract/Summary

Lecturers Review

Table of Contents

Section

Page(s)

Section 1:

Introduction

4 4

1.1 Company Background

1.2 Aims and Objectives 1.3 Concepts, theories and/or techniques for analysis 5 1.4 Data Collection Method 5

Section 2:

Case Study

5 5-6

2.1 Asparagus from Thailand

2.2 Value Chain Analysis: A case study of Mangoes in Kenya 6 2.3 Comparison of Asparagus and Mango Supply Chains 6

Section 3: 6-7

Conclusion (and recommendation)

References

1. 0 Introduction
This project came about as a result of the need to examine learnt theories during this module and how they can be applied in practice. The connection between theories and practice will be analysed. In the light of this, the logistics of Cool Cargo asparagus cold chain and Kenyas mango supply chain will be examined.

Cold Chain serves to bridge the distance separating different regions of the world and provides practical demonstration of trade globalization with the application of technology for keeping goods undamaged through temperature control.

1.1 Company Background

1.11 Cool Cargo: This companys main business is to provide a range of cold chain and operational logistics solutions. It has expertise in providing the needed logistics for moving perishable vegetables through long distances and in varying weather conditions to the final consumers in-tip-top condition. 1.12 Kenyas Mango exporting companies: These companies buy exotic variety of mangoes from the farms located in various districts and package them for exports. These companies are about 22 in number. They have to compete with two supermarketsNakumatt and Uchumiwhich sell mango to the upper income consumers.

1.2 Aims and Objectives

The aim of this project is to identify how improvements in Kenyas mango sourcing and infrastructure can boost mango exports as achieved by Cool Cargo with the asparagus value chain. To achieve this aim, I would examine the nature of the asparagus and mangoes business and the special problems and challenges they pose for logistics. I will also identify the solutions proffered by Cool Cargo to the cold chain challenges. Finally, lessons that can be learned and adopted by Kenya mango exporters from the asparagus supply chain will be highlighted.

1.3 Concepts, theories and/or techniques for analysis

1.31 Intermodal Transportation Some freight needs to be carried by using different modes of transportation such as road, rail, marine, air. The choice of modal split depends on the physical nature of the product; trade-off between cost and service; customer requirements; delivery time; the volume of materials; haulage distance; value of materials; importance of materials to production; mode availability and reliability; cost and flexibility to negotiate rates; reputation and stability of carrier; security, loss and damage; schedules and frequency of delivery and availability of special facilities (Rushton, Croucher & Baker, 2010, p.333-344; Waters, 2003, p.329; Jeffs & Hills, 1990, p.38). The rail mode may not be preferred where the risk of damage is high due to multiple handling issues but bulky/heavy loads may be better suited to rail mode;
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customers geographical location may rule out some modes especially if the location is not well served by road hauliers or the quantity of goods to be sent is small; urgent order/consignment by customers may require the use of air transport; ready availability and service reliability (Jeffs & Hills, 1990, p.39, 45)

How well this concept is used by Cool Cargo considering external factors, customer characteristics, physical nature of the product and other logistics components; assessment of the attributes of the different transport mode characteristics; consignment factors and; trade-off between cost and service (Rushton, Croucher & Baker, 2010, p.333-344 and Jeffs & Hills, 1990, p.38) to ensure efficient modal split will be discussed. 1.32 Global Distribution There are two global distribution channels for products. They are physical distribution channels and trading or transaction channels. Physical distribution is the method and means used to physically transfer or distribute products from points of production to retailers and consumers. Transaction channels is concerned with the non-physical aspect of the product transfer such as negotiation, buying, selling and product ownership at various points in the distribution systems. The logistics manager has the choice of own-account channels or use third party. The choice should be one or a combination that fits the product, market and consumer (Rushton, Croucher & Baker, 2010, p.50-61). Distributions role as a key drier of overall profitability should be well considered by a firm because of its direct effect on cost and customer experience (Chopra & Meindl, 2010, p.86-87). International trade requires that an organisation must develop the capacity to distribute its product competitively across external boundaries into the global market. 1.33 Supply Chain Integration The concept of integrates supply chain rests on the planks of coordinating and managing the flows of information and material between source and user as a system (Christopher, 2011, p.229). When the objectives of inventory reduction, shorter lead times and better service level are achieved through the establishment of a relationship between customers and supplier, integration is regarded as complete (Parnell, 1998, p. 60, cited in Power, 2005, p.253). Benefits derivable from integration includes material flow improvement, performance improvement, quick response to changing conditions, procedures standardization, better customer service resulting from lead time reduction and faster delivery, reliable quality and fewer inspection (Waters, 2003, p.42-43)

1.34 Supplier Collaboration Suppliers across supply chain boundaries need collaboration by pooling resources together to dovetail with one another. Supply chain collaboration as a concept that the exporters of mango in Kenya can use to improve their competitive advantage will also be x-rayed.

1.4 Data Collection Method

The data for this project were collected from the media provided for this module for the case study entitled Asparagus from Thailand, the FAO report titled Value Chin Analysis: A case study of Mangoes in Kenya, recommended module textbooks and lecture notes.

2.0 Case Study 2.1 Asparagus from Thailand

This case study is about the logistics challenges of moving asparagus from Thailand and the keeping it prime condition throughout the chain which lasts between 24 to 48 hours to the UK. Asparagus is moved through a cold chain right from the precooling at the pack house, to the airport cargo terminal until loading into the aircraft. Mode of transportation includes trucking by road from the pack house to the cargo terminal, by air to Europe, and finally by truck to the various supermarket distribution centers. Multiple handling of asparagus from the packing house until it reaches the DCs creates breaches in the required temperature which requires that solutions are provided at different nodes of the chain to control the temperature. Because of the loading and the unloading inherent in its movement through the chain, the vegetable stands the risk of being exposed to warmth which may not meet customers requirement of freshness. Overall, asparagus supply chain has to overcome limited transportation modes, maintaining and controlling temperatures, handling difficulties in other to meet customers requirements.

2.2 Value Chain Analysis: A case study of Mangoes in Kenya

In Kenya, there are about 22 companies engaged in the mango export business. Mangoes are bought directly from farms or through middlemen in various districts and packaged for exports. These companies are about 22 in number. The exporter have to compete with two local supermarketsNakumatt and Uchumiwhich sell mango to the upper income consumers. Due to poor post-harvest handling techniques and lack of storage facilities, product losses are high. Mango logistics is faced with many challenges such as unreliable supplies and inadequate
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infrastructure at the farm level, the marketing stage and the export stage. At the farm level, the challenges are mainly that of lack of clean planting material, inadequate technology, the length of production cycle and poor handling facilities. Poorly developed transport infrastructure like the bad roads leading to production areas contribute to quality deterioration and low prices. Export constraints include inadequate post-harvest/husbandry control, wrong varieties for sea freight, inadequate sea freight facilities and high air freight costs.

2.3

Comparison of Asparagus and Mango Supply Chains

The following characteristics of the two supply chains need to be examined to have an overview of the challenges, solutions and lessons that can be applied to improve them: 2.31 Sourcing: While asparagus is produced all year round in Thailand providing steady supply source, mangoes are only harvested once in a year in some Kenya provinces leading to unreliable supplies. 2.32 Infrastructure: Infrastructure such as packing rooms, roads, air transport facilities are available in Thailand to aid quick passage of asparagus through the different stages of the chain whereas roads leading to mango production areas in Kenya are bad which slows down the chain or brings it to a halt. 2.33 Product Value: Though asparagus is expensive, its supply chain is effectively carried out with surplus. On the other hand, the varieties of mangos in Kenya are of the low-qualitylow-price type and airfreight costs are prohibitive 2.34 Transportation Mode: Both asparagus and mangoes require intermodal transport split to be exported to the international market. However, the difference in the product values makes the choice of air transportation too costly for mango exporters even though like asparagus, mangoes need to arrive in good condition in the market

3.0 Conclusion
From this study it is clear that steady sources of supply, adequate infrastructure and an efficient supply chain are required to meet customers requirements in the perishable goods business. There is, therefore, a need for countries whose economic mainstay is agricultural produce to take advantage of trade globalization by
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improving their logistics network in order to be competitive in the international market. References:
Rushton, A., Croucher, P. & Baker, P. (2010). The Handbook of Logistics and Distribution Management, 4th ed., Kogan Page: London.

Chopra, S. & Meindl, P. (2010) Supply Chain Management: Strategy, Planning, and Operation. 4th Global ed. Englewood Cliffs, NJ: Prentice-Hall, pp.412-418 Cool Cargo (2009), Asparagus from Thailand- Logistics in the international food industry", case study from Logistics and International Trade Module [Online]. Available from: University of Liverpool/Laureate Online Education Blackboard (Accessed: 8 March, 2011) FAO (n.d.) Value Chain Analysis: A case study of Mangoes in Kenya, Food and Agriculture Organization of the United Nations Report, [Online]. Available from: http://www.fao.org/es/esc/common/ecg/228/en/kenya_web.pdf (Accessed: 8 March, 2011) Fuller, R.L. (1998) A practical guide to the cold chain from factory to consumer, [Online]. Available from: http://www.infolizer.com/5eviti85erma1or7g/The-coldchain-from-factory-to-consumer.html (Accessed: 9 March, 2011) Power, D (2005) Supply chain management integration and implementation: a literature review, Supply Chain Management: An International Journal, Vol. 10, No.4, pp. 252263, Emerald [Online]. Available from: DOI 10.1108/13598540510612721 Rodrigue, J. & Craig, M. (n.d.) The Cold Chain, [Online]. Available from: http://people.hofstra.edu/geotrans/eng/ch5en/appl5en/ch5a5en.html (Accessed: 8 March, 2011)
Jeffs, V. P. & Hills, P. J., D. (1990) Determinants of modal choice in freight transport, Transportation, Vol. 17, No.1, pp.29-47 [Online]. Available from: http://www.springerlink.com.ezproxy.liv.ac.uk/content/pv766558h07t8820/ (Accessed: 11 March, 2011)