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Total Quality Management An EU Importers Perspective

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TQM - What are the Key Features?

Everyone in the team, from farmworker / smallholder to the M D must feel involvement in every aspect of quality.

This team must be given leadership and trained to create a universal understanding that the exporters success depends upon the contribution and participation of every member of that team.

It follows therefore, that every team member must feel free to participate which can be a culture change.

Every team player is provided with the opportunity to perform their tasks correctly as specified with commitment.
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The principal requirements of T.Q.M.

    Involvement Leadership Culture change Commitment

Can only be developed around an effective quality assurance scheme, which is seamless between the smallholding / farm, and the supermarket shelf which is what the UK supermarkets expect of their suppliers. What do these supermarkets expect of their supply chain?

What is driving the supermarket policy?

Ian Merton (J.S.) Our fresh food philosophy is to guarantee to our customers quality produce sourced through growers prepared to take a long term view of our relationship with them. Bob Hilborn (J.S.) We identify 4 key areas for progress  Socially responsible sourcing,  Production systems with ICMS / Assured Produce / EUREP standards  Food Safety,  Consumer communications revealing Q.A. and hygiene practices right back to the farm backed up by independent verification. David Hughes (Wye College) Fresh produce has become what UK retailers describe as a Destination Category (a label shared with fresh meat and wine) for which shoppers will switch stores.
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What UK supermarkets expect and require of the supply chain:

 A thorough knowledge and comprehension of their needs Operating and supplying to meet them Certified performance and safety complying with UK/EU law Clear training / instruction / review mechanisms Suitable / specified packaging and logistics Reliable product / two way flow of information / innovation Clear value for money
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A thorough knowledge and comprehension of their needs which must imply a very professional export chain The expectations reflect those of their customers First the negatives:     No dangerous residues No G.M.Os No exploitation of people No degradation of the environment

The required varieties grown under ICMS Working to a defined crop management specification High levels of confidence generated:    From the consumer From the supermarket From the distributor

Being aware of the changes in the market-place Understanding Category Management

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Category Management
This includes supply chain management and integration of the export team with the UK distributor and supermarket components.            Multifunctional linkages across the business Complete electronic integration Information sharing Innovation Ability to assist / shape customers view of the category Customer-specific products / services and investments Financial stability Supply chain management (integrity / efficiency) Cost management Product range management Promotion and merchandising

Operating and supplying to meet the Supermarket needs.

Vertical integration with distributor and supermarket this supply chain management is one element of Efficient Consumer Response a policy which takes as its starting point how best to serve the consumer? Note a consequence of supply chain management will be that supermarkets will deal with fewer suppliers. Supermarkets / Distributor need suppliers with the volumes and resources to meet their needs Modern facilities with well trained / experienced staff Minimal strategic defaults from source farms Logistics engendering high degree of confidence e.g. dedicated transport / airport facilities

Certified Performance and Safety

Ensure full understanding of UK 1990 Food Safety Act and European Hygiene Directive 94/43/EEC Meet requirements of Due Diligence a requirement of the UK Act on all food suppliers Use of ICMS and Crop Management Specifications / EUREP Monitor all critical safety aspects (residues, water quality) use HACCP to identify and eliminate risks Run harvest and packhouse hygiene to highest possible standards Record all production inputs by field and farm Ensure full audit trail on every package Remember - the consumer awareness of Food Safety Issues is higher than ever before UK supermarkets are monitoring quality on shelves intensively e.g. ASDAs Tell Tim hotline to share information about produce and the J.S. Customer Cares weekly summary.
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EUREP - Principal Objectives

 To ensure suppliers are using GAP based on a robust legal framework where compliance with regulations in the country of origin is an absolute minimum requirement.  To encourage viable I.C.M.S minimising inputs whilst achieving viable yields for producers  To recognise existing Best Practice and develop it further to meet consumer needs through partnership with growers and suppliers.  EUREP participating retailers (26)  Include:  Safeway, J Sainsbury, Tesco, Waitrose, UK others in Europe include:- Albert Heijn, Coop Italia, Rewe, Promodes, Spar Austria, Tengleman, Migros, GB, Delhaize.
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 Clear training, instruction, review mechanisms  Q.A. systems require effective staff management and their development through formal training  Quality training achieves the desired result only if the growers are integrated into the supply chain  Training programmes must include relevant hygiene instructions  Trainers themselves need training a role for co-ordination from export associations  Q.A. system must involve full written checks, with feedback to the form and regular formal reviews of the results of checks at source and destination.  With a clear commitment between the exporter and UK distributor, the latter can have the confidence to jointly invest in training programmes, thus increasing the supermarkets confidence in the relationship.
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Suitable / Specified packaging and logistics

The key phrase is punctual delivery to programme which implies that food reliable logistics must underwrite exports The product and the package are an integral unit in the context of handling and marketing from the point of preparation and export. Be aware of the increasing demand for convenience produce the move towards semi-prepared products with need for extended shelf life. Innovation drives value creation, as does time and money spent on presentation. Check every delivery of packaging against specification - at the time of arrival. Increasing complexity of packaging implies specialised equipment to pack and deliver produce in optimum condition to the point of export.
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Reliable Product / 2 way flow of information

Reliable product needs T.Q.M. at every stage for reliability of : Eating quality Inherent safety The UK importer needs reliable suppliers for reliable product Two-way flow of information of accurate information and intelligence will benefit all partners Use it in developing flexibility to respond both to changes in the market place, and to problems arising Additionally the information should be used to stimulate supplier generated innovation (the only long term source of competitive advantage) Reliable suppliers will benefit in the climate of slower growth in the fresh produce market Synergise their strengths More stable returns Potential for economies of scale with fewer suppliers in play
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Clear value for money

Prices for fresh produce in UK stagnating declining in 99 Oversupply situation How do we fight back? Short supply chains needed Farmer consumer (farmers market) Farmer - retailer consumer (U.K. largest farms) Farmer distributor retailer consumer Farmer export group distributor retailer consumer With thin margins it is difficult to justify a longer chain The UK supermarkets require T.Q.M. and all done at the lowest possible cost. With static margins the supply chain needs to seek: More efficiency in production and marketing Product differentiation / added value Logistics efficiency With quality assured, programmed supply chain, the supermarkets need to minimise distribution and inventory costs, reduce wastage and maximise market opportunities. The consumer should benefit from better availability, less out-of-stock situations, fresher produce, longer shelf-life and potential cost-savings. 15

What is Mack doing to meet the challenges in this new market place?
 Investing further in its distribution centre  Investing in new systems and machinery  Building more self-contained teams specialising in individual products  Investing heavily in staff training  Developing new packaging, new product development  Submitting to comprehensive 3rd party auditing  Investing heavily in communications / databases and online systems with our customers giving almost instant response to changes in orders  Spending even more time with customers and in customers stores  Giving searching examinations to every aspect of our business seeking effective cost-reduction  Investing heavily in time spent overseas at source  Participating in Effective Customer Response programmes
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What is E.C.R.?
 Fully understanding our customers and consumers  Jointly managing the different categories of produce on the shelves (category management)  Develop long term initiatives with our customers to build shopper-loyalty, rather than concentrating on short-term price-offs, though these are a useful marketing tool The 4 components of E.C.R.:     Category Management Efficient promotions Effective new product development Continuous replenishment from the supply side

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Mack Multiples Division Transfesa Road Paddock Wood Tonbridge Kent TN12 6UT UNITED KINGDOM

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