Supply Chain - IT tracker joins mobs to makers
A goal of becoming more customer-focused led three woolgrower groups to develop a system that would allow them to manage their own supply chain
Disillusionment with the traditional auction system has led three woolgrower groups down an alternative path to market, one that has driven them to manage their own supply chains through an AWI-funded IT (information technology) system.
WoolConnect, based in Boorowa in south-west NSW, the Traprock Wool Association, based in south-east Queensland and northern NSW, and I-Merino of Kojonup, WA, wanted to establish closer links with their customers and take control of their own supply chains – from wool off the sheep’s back to yarn and fabric sold to manufacturers.
However, to make this marketing goal a reality, all three groups needed effective, efficient and simple supply-chain management systems, which is where AWI-funded work by Graeme Forsythe and Associates (GFA) has been important.
GFA has developed supply-chain management systems for the horticulture, beef and viticulture industries. AWI funded the initial work to convert GFA’s system into one that would support wool.
Graeme Forsythe says the process started about three years ago when his company was asked to develop a supply-chain management system that would allow grower groups to manage their wool from farm through to processing.
Mr Forsythe says the system needed to fulfil four objectives. First, it had to determine whether enough wool would be available to fill a customer’s demand. Second, it had to select the right wool to fill a customer’s order. Third, it had to make sure wool was processed to specification, giving the customer the desired outcome. And finally, it had to provide the means to trace wool from a sheep mob through to batches of yarn, fabric or garments, and do this in reverse – from yarn, fabric or garments back to the mobs.
The system achieves these goals by incorporating a wool production forecast, accessing relevant wool test certificates and efficiently managing inventory, quality and traceability.
Mr Forsythe says the system works simply. Each season, growers forecast their wool clip using electronic forms. This information makes its way to a central repository, where each group’s marketer matches expected supply to customer demand. Through negotiations with the Australian Wool Testing Authority (AWTA), both groups are also able to access test data for their members’ greasy wool. This allows them to confirm that wool to be used in the processing batch meets the required specifications.
The system also incorporates documentation – dispatch notes, receival confirmations and manufacturing records – that works through e-forms.
“This is important for letting everyone know where things are, and for inventory status,” he says. “Underlying it all is the need to keep everything simple and have the system support the required business processes.”
Mr Forsythe says the system supports chains that are driven by customer demand, not supply, and has been instrumental in meeting increasing demands for traceability.
“The system can be used by growers to maintain mobs and keep track of chemical and other procedures. Traprock, for example, wanted us to go back to the grower level, and we’ve basically created an electronic wool book and classer specification to manage bale inventory, and given growers the ability to associate their mob and paddock history to the wool bales. It means groups can track a garment back to a mob to batches of yarn, fabric or garments.”
He says this type of traceability is becoming more important for two reasons: customers’ environmental awareness and regulatory requirements. “The northern hemisphere wants green, organic products produced with good environmental practices. And regulatory requirements covering water and chemicals used to produce the wool also require traceability.”
AWI knowledge services program manager Paul Swan agrees, saying supply-chain management is becoming increasingly important, as is traceability. “In our work with retailers and other end users, authenticity and thus traceability is important, as are turn-key solutions. Supply-chain management can be important in achieving these goals.”
However, he says it is up to industry to decide how they market their wool. “Retailers and others in the supply chain use a number of different systems to handle their information flow needs – through this project we have given them another option,” Dr Swan says.
See also: Growers tap 'demand-pull'.
Return to Beyond the Bale Issue 28 index page.