operations & supply chain management - lonxanet
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From the Sea to the Plate…
Group D
Agenda
Objective
Seafood Industry in Spain
Lonxanet Process
Antillana Process
Applied Concepts
Objective
Identify, compare and analyze the different
processes and operations of Lonxanet and
Antillana in the seafood industry.
Seafood Industry
Spain
Seafood Industry Spain
Seafood IndustrySpain
Seafood Industry Spain
Spain is a maritime country
Mediterranean diet
2004: Fishing Industry = 1% of GDP
10% of areas depend on fishing e.g.
Galicia
3/2001 Law
Fishing economic sector involves:
Extractive
Aquaculture
Trade
Transformation of product
Supplier Power
MEDIUMBuyer Power
MEDIUM
Threat of New
EntrantsLOW
Threat ofSubstitutes
HIGH
RivalryHIGH
Industry Analysis
SWOT Extractive Fishing
STRENGTHS WEAKNESSES• Experience• High & Sustainable Demand • Products
• Quality• Commercial Value
• Resources & Capacity• Costs of Exploitation • Price of Gas & Oil
OPPORTUNITIES THREATS• Fleet Improvement
•IFOP (EU subvention) • New Agreements
• Emergence of Fleets• Resource Scarcity• Price Increase of Gas & Oil
Seafood Industry
Consumption:
SPANISH FAMILIES
HOTEL & CATERING
SPANISH INSTITUTIONS
FOREIGN POPULATION
Fresh & preserved seafood products
Purchasing behavior
Increase in frequency vs, 2003: 2 to 3 times per week
Quantity purchased has decreased
Prefer fresh & preserved seafood (included frozen)
Purchases:Catering Industry: 83%Hotel Industry: 17%
Purchasing behavior:Daily demand has increased since 2003
Primarily preserved seafoodSecondary frozen seafood
2005: 13% increase in seafood consumption
Purchasing behavior:10% increase in purchasing per week
Preserved seafood rather than fresh seafood
Purchasing behavior2005: decrease in purchase frequency
International Operator• Sustainability
• Product refinement process
• B2B Contract (Push Based)
• Projections
• Target market
Business Strategies
Domestic Operator• Sustainability
• On-demand (Pull Based)
• Use of eMarketplace
• No transformation
Lonxanet.com
• Established in 2001
• eMarketplace for Fish
from Galicia
• Supply to Restaurants, Hotels,
Bars, Cafes
• Orders via Internet & Telephone
• Delivery within 24 Hour Timeframe
Company Background
Economic View ofGalician Seafood Industy
• Survival vs. Industrial Mentality
• Lack of Transparency (Processes, Pricing, Sourcing)
• Many Intermediaries
• High Cycle Times (Jeapordizing the Freshness of
Produce)
• Diminishing Resources (Environmental Impact and
Sustainability Issues)
Geography
• Diverse Set of Inputs
• Regarded as High Quality
Collaborators
Eco-gastronomic organization that counteracts fast food and fast life with good, clean foodMaintenance of local food tradition and people´s decreasing interest in the food they eat
Event that brings together representatives of production food communities in a responsible and sustainable way.
Share of information, ideas and solutions to the challenge of their work
Logistical infrastructure and delivery system within 24 hours in Iberian Peninsula Refrigerated Courier (2º-8º), SEUR Frio brand
Online information protection
• Extraction
• Cofradias (patron maior,
administrator)
• Lonxa
• Courier
• Restaurant
Simple Process
• Fish• Mollusks• Crabs
Extract
• Inshore Fisheries / Rias
• Gears• Trawlers• Hand-picking
Deliver to Cofradia
• Categorize• Combine with
other catches
Raw Materials
• Packaging • Assorting by
Quality
Deliver to Consolidator
• Storage• Increase
in Price• Decrease
in Quality
Deliver to Wholesaler
• Storage• Increase
in Price• Decrease
in Quality
Work in Progress
End Product •Restaurants
•Hotels•Cafes
Cycle Time = 24 Hours
Cycle Time = 48 HoursPhysical Flow: Time Flow:Monetary Flow:Information Flow: (Push Based)
Legend:
(% Increase in price per intermediary)
(3% - 4%)
(30%) (30%) (30%)
(40%)
Galician-Seafood Process Flow
• Fish• Mollusks• Crabs
Extract
• Inshore Fisheries / Rias
• Gears• Trawlers• Hand-picking
Deliver to Cofradia
• Categorise• Combine with
other catches
Raw Materials
• Packaging• Assorting
by Quality
Work in Progress
End Product
•Restaurants•Hotels•Cafes
Cycle Time = < 12 Hours
Physical Flow: Time Flow:Monetary Flow:Information Flow: (Pull Based)
Legend:
(% Increase in price per intermediary)
(3% - 4%)
(30%)
Cycle Time = < 12 Hours
Galician-Seafood Process Flow
• Ability to reach critical mass
• Privacy and Trust
• Combining key players in industry
• Generates revenue
• Facilitates value-added services
CSF’s of Lonxanet (B2B eMarketplace)
• Overcoming distance & size
• Facilitates Industry mentality
• Improves inefficiencies
• Examples:
Using eMarketplaces to Match Supply & Demand
Antillana – Terra Nova
• Colombian Company
• Created in 1986
• Exports represent 60% of the company
• Last 4 years growth of 25%
• Last 4 years exceeded sales budget
• Seasonality: Lent represents 17.2% of their sales.
Company Background
Process at Large
• Fish• Mollusks• Crabs
Extract
• Shrimp farms
• Boats
Deliver to processing plant
• Make operative planning according to country.
Raw Materials
• Packaging
• Freezing• Storage
Export
• Fill in containers
• Need 18000 kg of product (1.5 months)
Import to Spain
• Storage• Distribu
tor
Work in Progress
End Product
•Restaurants•Hotels•Cafes•Supermarkets
Physical Flow: Time Flow:Monetary Flow:Information Flow: (Push Based)
Legend:
(% Increase in price per intermediary)
Antillana Process Flow
• Production efficiency• Inventory efficiency• Energetic efficiency• Damage of products because of storage• Variations of costs: farm shrimp and sea
shrimp• # of returns because of product quality
Quality Measures
Purchasing Department Quality Control Raw materials storage Processing Delivery (Export, National distribution) Planning department Sales Department
Departments Involved
Applied Concepts
LonxanetProduct assortment
Delivery with 24 HoursProduct of Galicia
(Traceability)Quality
Price Consistency
Delivery with 24 Hours
QualityPrice
Antillana
AssortmentQualityPrice
Order Qualifiers
Order Winners
Order Qualifiers & Order Winners
Industry Bottlenecks
Marine Traffic Regulation
Size & Capacity• Fleet• Refrigeration Units• Spanish Ports
Favorable Environmental Conditions for Marine Growth• Climate• Food Source
Lonxanet
Call Centre AgentsAvailability of Refrigerated
CouriersArtisanal Fishing (e.g.
Family based crew, small boats 5 – 12m)
Antillana
Bottlenecks
Quality Identification
• Refrigerated Storage(consistent temperature)• Proper Packaging• Consumed within 24 hours of catch• Minimal intermediaries• Selective Process• Capturing Process
Lonxanet
- Seafood Choices Alliance (Sustainable
Fishing)- MSC Certification
(Marine Stewardship Council)
Antillana
Quality Indicators
Lonxanet
Survival economy vs. Pull
Small due to simple process
Antillana
Bullwhip Effect
Lonxanet
Lonxanet does not need a JIT system since they work
based on their demand and they don’t keep any
inventory. Their product is fresh and it is delivered in
24hrs.
Antillana
JIT
Lonxanet
The capacity for Lonxanet is near to 100% since it
produces what is ordered.
Antillana
Capacity Utilization
Lonxanet Antillana
Quality High High
Price Medium High
Product Assortment Low High
Cycle Time 24 Hours 3 months
Disintermediation High Low
Information Flow Rapid Rapid -Direct
IT High Medium
Benchmarking
Takeaways
• eMarketplace optimizes market
deficiencies
• Separate processes for
international and domestic
distribution
• Seafood industry faces unique
challenges
Any questions?
Group D
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