Abstract
Outsourcing in the cold supply chain can assist the fresh fruit industry to attain competitive advantage through its role in cost reductions and customer service enhancement. The South African fruit industry depends mainly on export markets to earn revenue. It should thus be reckon that the South African fresh fruit travel long distances to reach these markets as South Africa is remotely situated from its major markets. However, the products have to be in good quality on arrival, and also be on time. The challenge therefore is for the fresh fruit industry to ensure that the cold supply chain is maintained through to international destinations.
The primary objective of the dissertation is to perform an analysis of the cold supply chain of the South African avocado for export – ‘charter the movement of the South African avocado from production areas to international markets, paying special attention to the outsourcing possibilities in the cold supply chain’.
In order to fulfill this purpose, the study covers the following main aspects:
• Developments in the fruit industry focusing specifically on the avocado fresh fruit industry.
• Detailed analysis of the cold supply chain and costs associated with operating and managing the chain.
• Outsourcing as a strategy for achieving the cold supply chain competitive advantage: assisting the avocado industry to compete effectively with other supplying countries. The dissertation has outlined a number of strategies relevant to deal with the challenges of cold supply chain, such strategies concern themselves with delivering the right product at the right time to the right customer at the right condition and at the right price.
It is evident from the discussions in the study that the South African avocado supply chain is long, complex and involves interaction of various processes and role-players. The post-harvest cold supply chain processes involves temperature controlled storage and transportation. Every link in the supply chain must be analysed to identify weaknesses, as there should be no breakage in the chain so that quality of fruit is not compromised and profitability is achieved. Currently storage and transportation are outsourced to a number of service providers. As far as the chain is concerned there are minimal problems regarding temperature management in the chain. Few avocado fruits have in the past failed PPECB quality tests for export.
The main challenge (amongst others) that the avocado chain is facing is effective information sharing to ensure a coordinated and well-aligned supply chain that will play a role in reducing costs and enhancing customer service. Lack of, for example accurate crop harvest estimate information and real-time communication and information sharing creates problems for the supply chain to function as a single entity with shared objectives.
Based on the above, a number of conclusions about, and recommendations for, outsourcing in the cold supply chain of South African avocado for export are made, a summary of which is provided by the following statements:
• A reliable relationship is important for both producers and service providers
• Joint responsibility: farmers should play their part in the cold supply chain management
• Ensuring cold supply chain best practices
• Creation of supply chain vision
• Ensuring of supply chain visibility
• Adoption of total cost approach
• Integrating and coordinating the supply chain
Charting the movement of the South African avocados from production areas to international markets requires that short, medium and long-term decisions about outsourcing be thoroughly made.
Prof. J.H. Du Plessis