banana markets, Mack must source from several different regions and countries to satisfy ACP banana importing licence requirements.
Sainsbury recognizes the importance of an integrated supply chain for fresh produce. The co‐ordination of supply networks between primary producers and Mack and other principal distributors/suppliers will become more important in the coming years. The relationship between Noboa and Mack is important for both firms and, for Mack, it is a partnership that the company trusts will be as successful as its 50‐year partnership with its Spanish citrus supplier. Mutual understanding and trust is growing as interfirm communication and co‐ordination increases, notwithstanding that the two companies have other commitments and clients. All three companies are dedicated to the idea of a clear audit trail and open information. As a result, any new developments (for example, new cultivars or customer requirements) can be known by all parties with very little delay and marketing support be made available.
From Sainsbury’s perspective, central buying of bananas is beneficial, as the company has an overview of the supply chain from its seven banana suppliers. Mack is an important supplier of bananas to Sainsbury, but, not its major supplier. Mack takes ownership of the fruit in Zeebrugge and does not have formal contracts with Noboa, despite the dedicated supply; as a result, transaction costs are relatively low. With bananas now being supplied year round, Mack is providing the retailer with a comprehensive range of high volume fresh produce items. As the three‐cornered partnership evolves, it is hoped that increasing marketing efficiencies will be gained to the net benefit of the partners and, most importantly, the final customer.
Conclusion
A growing recognition of the competitive advantage which can be gained through improving co‐ordination in the supply chain is the starting point for SCM initiations evolving in the UK fresh produce sector. Supply chain management moves on from neoclassical theories of the firm to a new paradigm for business, where competition pits channel against channel, and where supply chain partners combine skills and resources which none of the participants would be able to achieve independently. Planning, co‐ordination and investment facilitate a smooth and constant flow of goods.
Effective supply chain management places its emphasis on the consumer and what will bring most benefit to the end‐user. This involves sending information on customer requirements back along the line ‐ the most transparent chains will give the most feedback to the producer. The fruit and vegetable supply chain has traditionally been fragmented, but the last decade has seen rapid structural change.
Relationships in the fresh produce industry are unique. The volume and the perishable nature of the produce involved means that trust and personal relationships between supply chain partners are of utmost importance. In this case study, the smooth running of the chain is a product of the working together of the three companies, with the contracting out of some services, to supply the best possible fruit to the end consumer.
There is likely to be increased co‐operation in the fresh produce supply chain in the future. The “UK SCM” model will be exported to the major retailers on the continent of Europe. The possibilities for reducing costs and improving co‐operation have major implications for firms in the way they undertake business. Promiscuous trading relationships will become passé, for major players in the fresh produce markets.